Renewable Energy in Guyana
Table of Contents
Guyana is poised to become a regional leader in renewable energy, leveraging its abundant natural resources and strategic investments to transition toward a sustainable energy future. The government’s commitment to sustainable development is evident in its integration of renewable energy into its national policies through the Low Carbon Development Strategy (LCDS). This strategy aims to balance economic growth with environmental stewardship, positioning Guyana as a leader in low-carbon development in the Caribbean and Latin America.
Low Carbon Development Strategy (LCDS) 2030
Guyana’s LCDS 2030 is a strategic blueprint aimed at transforming the nation’s economy through sustainable development, with a strong emphasis on renewable energy and environmental stewardship. The strategy seeks to balance economic growth with the preservation of Guyana’s rich natural resources, positioning the country as a leader in low-carbon development in the Caribbean and Latin America.
Guyana's Low Carbon Development Strategy 2030
Key Objectives of LCDS 2030
1. Transition to Renewable Energy
The strategy aims to diversify Guyana’s energy mix by integrating renewable sources such as hydro, solar, wind, and biomass. Hydropower is identified as a cornerstone, with the potential to generate 8.5 gigawatts from 33 identified plants. The Amaila Falls Hydropower Project is slated to be the first major development, with plans for a second large-scale plant to follow by 2025.
2. Community Empowerment and Inclusion
A significant portion of LCDS 2030 focuses on empowering indigenous and local communities through sustainable energy solutions. The government has initiated the distribution of 30,000 solar home systems to hinterland communities, aiming to enhance energy access and reduce reliance on traditional biomass fuels.
3. Climate Finance and Carbon Markets
Directives are policies, regulations, and operational practices that support and reinforce CPTED principles. These may include planning codes, law enforcement strategies, or organizational policies that influence how spaces are used and maintained.
Examples of directives:
- Zoning laws that prevent over-concentration of certain types of businesses (e.g., bars, casinos)
- Property management policies requiring regular maintenance and security reviews
- Municipal strategies that promote walkable, mixed-use communities
By aligning institutional and regulatory frameworks with CPTED principles, directives help ensure that physical and social strategies are sustainable and effective over time.
4. Sustainable Infrastructure Development
The LCDS 2030 emphasizes the development of sustainable infrastructure, including the establishment of solar-powered mini-grids and the integration of renewable energy systems in public services such as water treatment plants. These initiatives aim to reduce greenhouse gas emissions and enhance service delivery in remote areas.
5. Policy Alignment with Global Climate Goals
The strategy aligns Guyana’s development objectives with international climate commitments, advocating for the removal of fossil fuel subsidies and promoting the adoption of clean energy technologies. National policies are being adjusted to support these goals, including the implementation of fees on gas flaring and the development of a diversified energy supply matrix.
Strategic Initiatives Under LCDS 2030
Hydroelectric Power
The LCDS 2030 states that Guyana has an estimated 8.5 gigawatts of hydropower potential across 33 identified sites. The Amaila Falls Hydropower Project is a flagship initiative aimed at providing 165 MW of renewable electricity. A second large-scale hydropower plant, set to be identified in 2025, is projected to add an additional 370 MW of capacity by 2030.
Additionally, Guyana is investing in smaller hydropower projects including facilities with capacities of 0.7 MW and 1.5 MW.
Solar Photovoltaic (PV) Projects
Guyana has already expanded its solar photovoltaic capacity through installations on public buildings, utility-scale solar farms and mini-grid systems. In 2022, the national utility provider, Guyana Power and Light Inc. (GPL), launched a pilot of its Net Billing Program. This initiative enables customers, referred to as Prosumers, with grid-tied solar systems to receive compensation for surplus electricity fed back into the national grid. Participating customers must enter into a Standard Offer Contract (SOC), under which they are paid 90% of the residential tariff rate for the exported energy.
In May 2025, the Government of Guyana, in collaboration with Guyana Power and Light Inc. (GPL) and the Inter-American Development Bank (IDB), launched the country’s largest solar energy initiative under the Guyana Utility Scale Solar Photovoltaic (GUYSOL) programme. The Linden solar farm, slated for completion in 2026, is expected to generate approximately 20,210 megawatt-hours of clean energy annually. This project is projected to reduce carbon dioxide emissions by over 17,000 tons per year for the next 20 years and save the government an estimated GY$1.2 billion annually in electricity subsidies currently allocated to support energy production in Linden.
Gas-to-Energy (GTE) Project
The government if Guyana has allocated $51 billion of their 2025 budget to the Gas-to-Energy project. This project involves the construction of a 200-kilometer pipeline, integrated gas processing facility and 300-megawatt (MW) combined cycle power plant.
At the facility, a natural gas liquids (NGL) processing plant will treat the gas to remove NGLs for commercialization, and the (MW) power plant will use the dry gas to generate electricity for domestic use. This transition to a more stable and cost-efficient energy source is expected to significantly reduce power outages and create a more conducive environment for industrial growth and business development.
Guyana's Gas-to-Energy Project
International Collaboration and Support
Mainstreaming Low-Emission Energy Technologies (MLEET)
MLEET is a UNDP-backed initiative that aims to accelerate Guyana’s adoption of renewable energy and energy efficient solutions. It includes solar PV installations at water treatment plants, capacity-building for government agencies, and pilot programs for clean energy technologies in public institutions.
Just Energy Transition
Just Energy Transition (JET)
The JET project is one-year initiative financed by the Joint Sustainable Development Goals (SGDs) fund. It supports Guyana’s transition towards clean energy and is aligned with the country’s Low Carbon Development Strategy (LCDS)2030. As part of the project, solar-powered electric vehicle charging stations were installed in the country’s capital. These grid-connected stations are powered by 15 kW solar photovoltaic systems and are expected to collectively offset over 54 tons of carbon dioxide emissions each year.
Mainstreaming Low-emission Energy Technologies
Getting Ahead of Dutch Disease in Guyana
Guyana is at a pivotal moment in its economic development. The discovery on significant offshore oil reserves by Exxon in 2015 propelled the nation to becoming one of South America’s fastest growing economies. However, this rapid transformation brings with it, the risk of “Dutch disease.”
Dutch disease refers to an economic condition in which the rapid growth of one sector, typically the natural resource sector, leads to a decline in other parts of the economy, such as manufacturing or agriculture. This phenomenon is often accompanied by a significant appreciation of the domestic currency, making other exports less competitive on the global market. Paradoxically, what appears to be positive economic news such as the discovery of valuable natural resources, can ultimately have adverse effects on the broader economy.
The International Monetary Fund (IMF) has endorsed Guyana’s economic strategy, affirming that the country is effectively managing its oil wealth and mitigating potential risks associated with rapid resource-driven growth.
The IMF further highlighted that Guyana’s economic expansion is not leading to inflationary pressures and emphasized that the government’s expansionary fiscal policy stance is appropriate, given the country’s development needs.
The IMF’s assessment reflects confidence in Guyana’s economic management, particularly in addressing concerns related to Dutch Disease and debt sustainability.
IMF Executive Board Concludes 2023
Guyana’s Current Economic Landscape
A study conducted by Rystand Energy found that Guyana is forecasted to produce 1.7 million barrels per day of oil by 2035, positioning the country to becoming the fourth largest offshore producer of oil in the world by 2035, ahead of countries like the United States, Mexico and Norway.
This boom has led to a rapid increase in GDP and significant infrastructure development. However, there are concerns about the equitable distribution of oil revenues and the potential neglect of non-oil sectors. The government has implemented measures to manage oil wealth, including the establishment of the Natural Resource Fund (NRF) to save and invest oil revenues for future generations.
Guyana enters the big league as O&G revenues grow to $7.5 billion in 2030
Lessons from Other Nations
Guyana can learn valuable lessons from other resource-rich countries that have faced the challenges of Dutch disease. For instance, Trinidad and Tobago’s experience highlights the importance of establishing a sovereign wealth fund and implementing policies to promote economic diversification. Similarly, Suriname’s approach to distributing oil wealth directly to citizens through savings accounts aims to ensure that the benefits of resource wealth are widely shared. These examples underscore the need for transparent governance, strategic investment, and inclusive economic policies to mitigate the risks associated with Dutch disease.
The Dutch Disease Phenomenon
Royalties for everyone
Strategies to Mitigate Dutch Disease in Guyana
- Economic Diversification: Investing in sectors such as agriculture, manufacturing, and tourism can reduce dependence on oil exports and create a more resilient economy. Policies that support small and medium-sized enterprises (SMEs) and encourage innovation can foster growth in these sectors.
- Strengthening Governance and Transparency: Implementing robust institutions and transparent processes for managing oil revenues can reduce the risk of corruption and ensure that funds are used effectively for national development.
- Investing in Human Capital: Enhancing education and vocational training can equip the workforce with the skills needed to participate in diverse sectors of the economy. This investment in human capital can drive innovation and productivity across industries.
- Implementing Fiscal Policies: Adopting fiscal policies that smooth public spending and prioritize capital expenditure can help manage the economic impact of oil revenues. A medium-term fiscal framework can guide budget planning and prevent overheating of the economy.
- Developing Infrastructure: Investing in infrastructure projects, such as transportation, energy, and communication networks, can support economic diversification and improve connectivity across the country.
Weakness in Guyana’s Energy Approach
Despite Guyana’s rapid economic growth driven by newfound oil wealth, the country faces significant challenges in the realm of renewable energy development. Despite the nation’s commitment to a low-carbon future, several systemic weaknesses hinder the effective deployment of renewable energy solutions.
Overreliance on fossil fuels
Guyana’s energy infrastructure remains predominantly fossil fuel-based, with heavy fuel oil accounting for most of the electricity generation. The cost of electricity is $0.32 per KWH, which is among the highest in the region. Additionally, power instability is common, affecting both residential and business consumers. This reliance on fossil fuels contradicts the nation’s aspirations for a sustainable energy future.
Delayed Gas-to Energy Project
The ambitious $1.9 billion gas-to-energy project, intended to reduce electricity costs and leverage natural gas resources, has faced significant delays. Issues such as equipment delivery setbacks and land compensation disputes have pushed the project’s completion from 2024 into 2025. These delays exacerbate the country’s energy challenges and divert attention from renewable energy initiatives.
Investment Barriers
One of the key challenges for potential investors exploring renewable energy opportunities in Guyana lies in the existing energy legislation, which grants the state-owned utility, Guyana Power and Light Inc. (GPL), a monopoly over electricity generation. The lack of legal provisions enabling grid tie-in and the resale of electricity to GPL complicates the financial viability of independent renewable energy projects. Unless a public-private partnership is negotiated, such projects may struggle to proceed beyond the feasibility stage.