36MW power ship to cost Guyana US$2.4M annually, minus fuel

Apr 19, 2024 News

The Guyana Power and Light substation at Sophia

Kaieteur News – The Guyana Power and Light (GPL) Incorporated will be paying as much as US$2.4M annually for the use of a powership that it has contracted with Urbacon Concessions Investments, W.L.L (UCI) to charter the vessel with a total installed capacity of 36 Megawatts (MWs) for a period of two years. This, figure does not include fuel.

The contract, according to GPL, includes the provision of operation and maintenance services as part of the agreement. According to the utility company in a public missive yesterday, “the contract requires GPL to pay UCI a fee of 6.62 US cents per kWh as a monthly charter fee for the powership and a monthly operation and maintenance fee of 0.98 US cents per kWh, based on electricity generated.”

A 36MW capacity plant is expected to generate some 315,360,000-kilowatt hours per year, which would mean an annual bill $2,087,683,200. This in addition to the 0.98 US cents maintenance fee, will add an additional US$309,052,800, or cumulatively US$2,396,736,000.

According to the power company in a missive, power ship is expected to operate at 96 percent availability. Additionally, it was pointed out that GPL has already paid a total mobilization fee of US$1M and is not required under the contract to pay a demobilization fee.

As had been indicated earlier, under the contract, GPL is responsible for providing Heavy Fuel Oil (HFO) for the operation of the generators. According to the power company, the power ship was last operated in Cuba as a part of contingent of similar generation assets and is expected to arrive in Guyana on May 1, 2024, subject to weather conditions.

According to GPL, the power ship will be located at Everton, Berbice and will be interconnected with GPL’s Grid at 69 kV. The company said it has already commenced preparatory work at the site to accommodate the power ship and the interconnection to GPL’s Grid and is expected to be fully operational and delivering electricity by May 8, 2024. GPL on April 13, 2024, GPL Inc. inked the contract with UCI, a subsidiary of UCC Holdings, a company incorporated in the State of Qatar. UCC Holdings has a strategic alliance with Karpowership International, a Turkish company.

Meanwhile, in an advertisement published in the Kaieteur News on Thursday, GPL invited expression of interest for the rental of a barge to transport and store heavy fuel oil from Kingston / Vreed-en-Hoop to Everton, Berbice. In the advertisement, GPL explained that it is in the process of expanding its generating capacity and the need has arisen for a barge with the capacity to transfer and store between 8,000 and 35,000 barrels of HFO to be transported from Kingston to Everton. The company noted that the barge will be primarily stationed at Everton. With this in mind, GPL said it is seeking expression of individuals/companies who can provide these services. The requirements for the barge include capability of transporting and storing heavy fuel, oil (HFO) in a safe manner. The barge must have among other things, capacity to store between 8,000 to 35,000 barrels of heavy fuel oil. The barge must also have the capability of mooring and transiting between GPL’s Kingston and Vreed-en-Hoop ports. The barge must be self-propelled. It must hold the capability of performing ship-to-ship transfer /loading of heavy fuel oil. The barge must be available to be leased on a continuous basis for a minimum period of one year to a maximum period of two years. It must have a valid barge registration/licence and be double hulled. The relevant documents have to be submitted to the National Procurement and Tender Administration Board by 2 pm on April 30th.

No power hike

General Secretary of the People’s Progressive Party (PPP), Bharrat Jagdeo has assured that there will be no increases in electricity charges during the period that the power ship is in operation. Speaking at his weekly press conference at Freedom House on Thursday, Jagdeo explained that the government will absorb any additional costs stemming from the rental. “There will be no increase in the price of electricity because of this rental. The government, at about $44 or $50 per kilowatt hour, is already subsidising the power to people, businesses, etc.,” Jagdeo said. The power ship is being rented in an attempt to supplement the generation shortfall, which has led to recurrent blackouts. It forms a critical element of the government’s short-term plan to address this shortfall. Jagdeo further noted, “It is a large sum of money that we use to keep the price of electricity fixed. Since we got into office, we have kept it fixed, in spite of the increase. So, there shall be no increase in the price.” On Tuesday, President Dr. Mohamed Irfaan Ali affirmed the feasibility of this rental, explaining that some of the challenges GPL faces are heightened demand and the lack of capacity. This temporary arrangement will be in place for two years, essentially until the transformative gas-to-energy power plant comes on stream in 2025.

36MW power ship, Guyana, Guyana Power and Light (GPL) Incorporated, Urbacon Concessions Investments, W.L.L (UCI)

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