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300MW gas-fired power plant may not be sufficient to meet electricity demand – Brassington
Kaieteur News – The controversial US$2B Gas-to-Energy (GTE) project has been questionable from its inception, and it seems as though the defenders of this major initiative, are finding it difficult themselves to determine its feasibility and convince Guyanese citizens of same.
Project Head Winston Brassington was tasked with providing the International Energy Conference on Wednesday with an update on the project, and disclosed that the power to be generated from this project may not meet the demand required by 2026- some two years after the project is slated to come on stream.
GTE Project Head, Winston Brassington
During his presentation at the Marriott Hotel in Kingston, Georgetown, Brassington in his annual briefing explained, “We are building a project of 300 megawatts (MW) and as a general rule of thumb; electricity demand grows in line with GDP (Gross Domestic Product). Now reality is, in the last three years that (demand) has lagged as we would expect. We know there are a dozen hotels under construction or in the works, a lot of new development and so we are projecting- (Guyana Power and Light) GPL is projecting- that by 2026 we will need twice as much power (or) energy as they generated last year.”
He said the country’s peak demand in 2022 was 156 MW, while the average load was 112 MW. To this end, he pointed out, “By 2026, we (are) looking at a peak at over 300 megawatts, so even this project may not be adequate to meet all of the demand in the future.”
The Government of Guyana (GoG) on December 13, 2022 signed a US$759M contract with CH4-Lindsayca to construct the 300 MW gas-fired power plant and a Natural Gas Liquids (NGL) facility at Wales, West Bank Demerara.
It was reported that the government will be financing this project through a loan.
Brassington dissected the costs while giving his outline, noting that US$477 million is allocated for the power plant, while the remaining US$282 million will go towards the NGL facility.
Presently, the GoG is awaiting approval from the Environmental Protection Agency (EPA) to commence works on the power plant.
The other two aspects of the project- a pipeline to transport the gas and the NGL facility- has already been approved by the EPA, through a separate application that was made by Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil’s subsidiary.
Vice President Bharrat Jagdeo had announced in December last year that he was “extremely pleased” that the contract was awarded for the construction of the power plant and NGL facility.
He was keen to note that the power plant is expected to be completed by December 2024 and that “huge penalties” will be imposed on the contractor for failing to deliver on time.
Government claims that the 300 MW power plant will slash electricity bills by 50 percent.
In the meantime, the country will be saddled with an annual debt of US$106 million for 20 years, to pay back costs associated with developing GTE project.
Brassington explained that Guyana will be required to pay back ExxonMobil some US$55 million each year for 20 years for its investment in the pipeline.
“That US$55 million is the amortized cost of US$1 billion for 20 years at a discount rate,” he said.
In addition to this, Guyana will also be expected to repay another US$51 million annually for 20 years on a loan the country will take to pay for the NGL facility and power plant.
- demand, Electricity, gas, GTE, power
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