Hydro-Electric Power (Amendment) Bill 2013 – Bill No.15/2013 – July 18, 2013
3381 18 Jul, 2013
HYDRO-ELECTRIC POWER (AMENDMENT) BILL 2013 – Bill No.15/2013 – July 18, 2013
Mr. Hinds: Thank you very much, Mr. Speaker. The harnessing of our many rivers to produce electricity has been a long held aspiration of us Guyanese. I can recall my grandparents and those of that generation speaking of our Kaieteur Falls as the waterfall with the largest single drop in the world and I think that they had visions of maybe a Niagara Falls being constructed here in Guyana.
We have the opportunity at hand now, once we work together, to obtain an aspiration that has been long held by our people and pursued historically by whichever party was in office. I am aware that maybe from about the 1950s, the then Demerara Bauxite Company Limited (DEMBA), subsidiary of Alcan began surveys of the Tiger Hill Falls on the Upper Demerara River as a possible source of electricity for their operations at Mackenzie, now Linden, and including a small aluminium smelter common to that time. As we know, that point was not reached for Alcan to develop that Tiger Hill site.
Less widely known is the fact that the British gold-mining company Consolidated Gold Fields, in 1957, built a mini hydropower station at Tumatumari on the Potaro River, 2x0.75 megawatts, to replace its wood gasifying generating stations at Mahdia. I can recall, too, as a teenager, reading articles and studies undertaken to evaluate possibilities of a development at Tiboku on the Mazaruni River during the 1957-1964 period of the People’s progressive Party (PPP) Administration.
Then later when the People’s national Congress (PNC) was in office in the 1970s, there was the push to develop Upper Mazaruni Hydro. None of these, the large ones, has come to fruition. However, much methodical work was undertaken during the 1970s through to the 1980s, looking across our whole country and, particularly, at that time, at the Potaro and Mazaruni basins.
In the early 1970s, the Government of Guyana, with support from the United Nations Development Project (UNDP), engaged the Montreal Engineering Company Ltd. (Monenco) to conduct a hydro survey, an inventory for all Guyana, including pre-feasibility studies of the potentially most favourable sites. Monenco submitted its report entitled, Hydroelectric Power Survey of Guyana in April, 1976 which identified about 67 sites with potential of more than 7,000 megawatts for our whole country with, perhaps, 70% of that potential arising in the basins of the Mazaruni and Potaro Rivers. Fifteen sites, including Amaila, were identified as most promising. Subsequently, Sweco prepared and presented in 1982, a review of all feasible, technical possibilities and further studies of the most promising sites to meet the requirements of various development scenarios for Guyana. Again, Amaila Falls was one of the sites making it into this shorter shortlist from 15 down to six. It was recommended that there be further studies of these six sites.
No one could deny, even if they wanted to, that the identification of Amaila as an attractive site for development of Guyana goes back to the days when the PNC was in office. We remember, too, the Upper Mazaruni Hydroelectric Project and all the efforts that were made during the 1970s to realise that development. That development would have been a large one up to about 3,000 megawatts in four stages of 750 megawatts each.
That quick, historical review should establish that all of us Guyanese from even colonial times and through all the years of our independence have been seeking the development of our significant hydropower site in Guyana, so far without success. I have no doubt that we remain together in wanting to see a successful, profitable hydropower development in our country and we have the chance today to work together to make Amaila Falls a site that was identified and studied to some degree in the PNC Administration...we can together make Amaila Falls our first significant hydropower site.
Our existing law concerning hydropower development is our Hydro-Electric Power Act of December, 1956. This is an Act that is today nearly 60 years old and it was cast in the arrangements, thinking and practices of that time – 60 years ago – within and without Guyana. There is much that needs updating in this legislation and one can think there could be good reason to rewrite it altogether. Maybe we should commit to doing that at some convenient and appropriate time. But today we are working to bring to closure the arrangements that we have been pursuing. When I say we, I mean it is not only we, on this side, but Members of the Opposition have also been participating in various presentations over two years or so and maybe even more. I am trying to recall the events. All of us in Guyana and this House have been, to a greater or lesser degree, working towards the closure of all arrangements so that we can get ahead with Amaila.
The amendments to the Hydro-Electric Power Act that we are addressing now are essential to closure. The amendment document we have before us today seeks to address the greatly increased social awareness of environmental and social impacts and the greater lengths to which development projects are expected to go these days to avoid, mitigate, compensate for inevitable social and environmental impacts of any hydropower development. Indeed, the arrangements which the world found acceptable even unto the 1970s are no longer acceptable today. The huge chedio lake or reservoir and the people displacements which were contemplated in the proposal for the development of the Upper Mazaruni River diversion scheme in the 1970s are not acceptable today. In any future development, the size of the reservoir, displacement of the inhabitants will have to be greatly reduced even though there would be some loss of power and smoothing of generation throughout the year. So these days, the arrangements which were in practice 50 or 60 years ago are no longer acceptable.
From about the 1970s, pacific environmental protection laws began becoming common, defining what arrangements will be acceptable. In 1995, the International Energy Agency commenced a five-year research programme on hydropower. That was entitled, the Implementing Agreement for Hydropower Technologies and Programmes and it was aimed at a number of things: arriving at a set of international recommendations for environmental impact assessment of hydropower projects and criteria for the application of mitigation measures; improving their understanding of hydropower environmental advantages and suggesting ways to ameliorate its environmental drawbacks; forwarding national experiences regarding environmental effects of hydropower development at a project level and the legislation and decision-making process at a national level; and providing an environmental comparison between hydropower and other sources for electricity production. There have been other studies at the international level.
It is against this background that this amendment is being brought to this honourable House. This amendment seeks to address the environmental considerations which, in these times, must be factored into hydroelectric power development projects, whether undertaken in Guyana or elsewhere, but, specifically at this time, we are talking about the Amaila Hydropower Development.
Mr. Speaker and Hon. Members, let me say that the considerations that go into these amendments here are quite universal at this time. It is, these days, international standard practice for projects of a certain magnitude and impact to be designed with a biodiversity offset. The Amaila Falls Project meets the thresholds which require, in international thinking these days, a biodiversity offset.
Pursuant to our commitments under the Low Carbon development Strategy (LCDS) and our obligations to the Inter-American Development Bank to develop a flagship hydropower project consistent with the current safeguards, we have brought to this House this amendment to create an Amaila Falls biodiversity offset area to compensate for the project impact. Specifically, the biodiversity offset is designed to mitigate the long-term impacts of developing Amaila on the habitats affected with an emphasis of ensuring no net loss in the ecosystem services provided.
What is a biodiversity offset? I can read to you here the formal definition of a biodiversity offset but basically it is an arrangement where an area is designated to compensate for significant residual adverse biodiversity impacts arising from the development of a hydropower site.
When our law was written in 1956, these concerns were not formally addressed, but these days we have to address them formally. We are amending the Hydro-Electric Power Act so that we could address these issues in a formal way.
Mr. Speaker and Hon. Members, as you are aware, we did lay before the House an amendment I think a month ago and since then the work has been refined. There have been further studies of the law and the amendment and so I submitted yesterday late, effectively this morning, after I signed it, some further amendments to that amendment.
I would like to be allowed to speak to the total set of amendments in one go.
Mr. Speaker: Hon. Prime Minister, only today I received some substantial amendments to this Bill. I am not required to vote but I am at pains to try to insert and delete. I hope that you can successfully navigate through that minefield later on. It does raise serious concerns for me whether or not Members have had sufficient time to consider these amendments, but that is for them to decide and determine. Proceed, please.
Mr. Hinds: Thank you very much, Sir. I appreciate your comment but the additional items in there are quite simple and straightforward and I hope that Members, having before us this aspiration of our parents, grandparents and earlier peoples, would indulge me so that we could pass this amendment this afternoon.
Mr. Speaker, let me go back to the amendment that was first laid in this House. It has three clauses.
Clause 1 is the usual short title.
Clause 2 sought to introduce in the long title words that would provide the basis for environmental considerations in the law as a whole. And we had in there a rather short amendment but, on further consideration, we want to lengthen the amendment that is in Clause 2. So we are proposing that the long title be amended by inserting the phrase... Sir, may I ask, could I not speak to the whole amendment at this time and when we get to the third reading...
Mr. Speaker: I note that the amendments are more than the Bill itself so I am anxious to hear from you on them.
Mr. Hinds: I will speak to the whole amendment and then when we get to the third reading, I will introduce them specifically at the particular time.
We are amending the long title so as to introduce considerations of the management, conservation and preservation of the environment surrounding hydroelectricity generating facilities or areas intended as compensation for residual impacts from hydroelectricity generating facilities. We are introducing this into the long title so that there is a basis in the clauses of the Act to deal with these matters. As the Act was written in the 1950s, it did not, in the long title, contemplate these considerations.
Mr. Speaker: Hon. prime Minister, if I may, the long title itself has two amendments. The first is in clause 2 here and the second was circulated today.
Mr. Hinds: Yes, Sir.
Mr. Speaker: Thank you. Go ahead.
Mr. Hinds: To clarify, we have subsequently replaced the amendment in the long title with a larger amendment.
Mr. Speaker: So the amendment which says “for the conservation and preservation of the environment surrounding hydroelectricity generating facilities” is replaced by the one circulated today.
Mr. Hinds: It is replaced by the one that was submitted today which essentially expands on that.
Let me give the general overview of the amendments that we proposed. There is the amendment to the long title.
Then there are amendments to sections 2, 6 and 12. These amendments are intended to provide clarity and definition consistent with internationally recognised standards of environmental conservation, biodiversity offset, hydroelectric power offset reserve area, as well as to strengthen the intent of the Hydro-Electric Power Act to undertake forming offset areas for conservation and mitigation purposes.
There is an amendment to section 23 (1) and this provides for the biodiversity offset to be established to compensate for the residual impacts of the project.
There is an amendment to section 26 (2) and this is to increase the penalty for breach of regulations under this Act. In 1956, when the Act was enacted, the fine of $19,000 was considered adequate as a deterrent. That sum, today, is not of great significance and so we are increasing the penalty to a figure of not more than $10 million.
The amendments being presented here today are amendments primarily to introduce into the Hydro-Electric Power Act of 1956 environmental considerations to create the basis for establishing the authority to oversee the biodiversity offset area and to increase the penalties so that they are relevant to today.
We have been spending quite some time over the last months speaking about the high costs of electricity to us here in Guyana. The people of Guyana have been calling for lower electricity tariffs. Presently, we generate electricity burning petroleum fuels, and burning petroleum fuels in the generators that are appropriate to our circumstances. If we use diesel, there is a generation cost of $0.30 to $0.35, depending on the particular units that are used. The Guyana Power and Light Inc. (GPL) has been converting to heavy fuel oil (HFO) which is somewhat cheaper than diesel and even there the cost is somewhere in the order of $0.24 a kilowatt hour. Our average blended cost of producing electricity in GPL is in the mid 20s US cents per kilowatt hour. Just let me say that this is about true for all of the CARICOM countries which are in the same position as we are, except for Trinidad and Tobago which has fuel, the natural resources – oil and gas – and which provides in-country prices that are lower than international prevailing prices. Some of us may know the arguments that have followed that because, as a result, electricity prices in Trinidad and Tobago are quite low, maybe the lowest in the CARICOM area. We know that other countries have been protesting about this advantage that business and manufacturing has in Trinidad and Tobago. The country with significantly lower tariffs is our neighbour to the East, Suriname, where a hydropower station that was set up for aluminium production is now providing power to that country and helps to lower the cost of electricity there.
If we want lower electricity prices in Guyana, the only way for us to get is for us to - at this time that known to me that is available to us - proceed with Amaila. Amaila will lower electricity costs by about half. It is projected that the costs of generation would be no more than $0.12 to $0.13 a kilowatt hour. So I think we should all support this proposal and another proposal which is on the Order Paper for today so that we could conclude the preparations for Amaila and we can early start the construction and have electricity at half the rate we are paying now, which will not only lower the costs at our homes, but will also create a much better basis for the development of manufacturing and our economy here in Guyana.
I move the proposal that this Bill be read a second time. [Applause]
Mr. Hinds (replying): Mr. Speaker, Hon. Members, the Opposition has not spoken on this bill which is a most important Bill for our country and I ask myself ‘Why have they not spoken to this Bill?’ I would want to say to them that if they have chosen not to speak to this Bill because they do not want to speak out to the Guyanese people their opposition to this Bill... If that is the reason why they have not spoken then their actions when we go to the vote will also say clearly their opposition to this Bill; their opposition to a development which would bring Guyanese electricity at less than half of the rate of and would protect us against the volatility of oil prices going into the future.
We have had the presentations by my other colleagues on this side and I think that it puts a complete picture to the people of Guyana of the reasons why we need to proceed with this bill so that we can enable the Amaila Falls Hydropower Project. I want to join with my colleague, Minister Benn, when he spoke about not being begging people but this is an occasion for the benefit of the people of Guyana, for the good of the people of Guyana. We are prepared to beg the Opposition to reconsider their position and support this bill. We have been working as a country for a number of years go get us to bring us to this point at which we are today. We would be rejecting a golden opportunity in not going forward. If this bill is not passed it may take, easily, five years even ten years before we can put things together again. For whomever is in government it would take five to ten years to attract investors to come back and look at a development such as this. It will take five to ten years for whomever is in Government. I would like to ask the Opposition, before we put it to the vote, to reconsider once more to think about the aspirations of our people, the aspirations of the past leaders of both parties. Both Mr. Cheddi Jagan tried and Mr. Forbes Burnham tried to bring hydroelectricity to Guyana. Now we have an opportunity. We, on our side, may say that we are realising Mr. Cheddi Jagan’s dream and they are free to say that they are realising Mr. Forbes Burnham’s dream. We will not envy them that. We have the opportunity here to realise the dreams of our leaders. That is the opportunity before us and that is the opportunity I hope that the Opposition would not reject. Mr. Speaker, I beg that the Bill be read a second time.
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