IEEFA finds Guyana Gas to Energy project unnecessary and debt-laden

A new IEEFA report concludes that Guyana's proposed Gas to Energy project — which would use natural gas from offshore ExxonMobil-operated wells to generate electricity — will overbuild the grid, burden the state utility with unsustainable debt, and crowd out the solar expansion needed to meet the country's 100% renewable energy target. The report finds that the same capital investment directed at rooftop solar and storage would provide lower-cost, low-carbon electricity to every household in Guyana.

Guyana Power and Light, the national electricity utility serving approximately two-thirds of the population, would incur substantial new debt under the Gas to Energy project to finance a power plant capable of generating far more electricity than projected customer demand over the coming decade. IEEFA contends that the overbuilt gas infrastructure will crowd out solar deployment, leaving Guyana government finances exposed to a bail-out of the utility. ExxonMobil stands to gain on three fronts: profits from pipeline construction, interest income from lending to Guyana, and revenues from selling natural gas to the power project over the long term.

IEEFA estimates the capital investment earmarked for the Gas to Energy project would be sufficient to provide reliable rooftop solar and storage systems to every household in Guyana. Solar carries zero fuel cost, generates local employment in installation and maintenance, directly reduces monthly electricity bills for individual households and places Guyana on a path toward its stated 100% renewable energy goal. By contrast, natural gas introduces price volatility into the electricity system, as demonstrated by the experience of Puerto Rico and other fossil-fuel-dependent small economies, where fuel cost swings have destabilised utility finances and consumer affordability.

IEEFA's analysis echoes a pattern observed in other developing economy energy decisions where fossil fuel infrastructure is chosen despite superior economic and climate credentials for renewables. Guyana's oil revenues, generated from offshore production in which ExxonMobil holds a dominant position, provide the government with a potential source of capital that could alternatively be deployed in an aggressive domestic rooftop solar programme. The report urges Guyanese policymakers to reject the Gas to Energy path and instead commit oil profits to a distributed solar programme that would benefit individual households, create local jobs, reduce utility tariffs and fulfil the country's international climate commitments.

Key figure — 100% — Guyana's stated renewable energy target, which the Gas to Energy project would undermine by crowding out solar expansion