Power ship will cost Guyana more than US$200M for 2 years – Patterson

Apr 20, 2024 News

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Kaieteur News – The power ship recently rented by the Guyana Power and Light Incorporated will likely run the country in excess of US$200M over the two-year period for which the contract was inked.

This, according to former subject minister David Patterson, who yesterday in a widely broadcast interview, said that an interrogation of the information released, reveals that it would in fact cost the country some 55 US cents to generate a megawatt of electricity.

He prefaced this position by casting blame at the mismanagement of the utility company in tandem with the modus operandi of the incumbent administration.

Patterson said that the blackout woes plaguing the country was created by the incumbent administration since it did not install new generation equipment and / failed to adequately maintain the facilities.

“When you interrogate it, you realize that we will pay in excess of 55 US cents per megawatt which is exorbitantly high; (and) we obviously have to supply the fuel,” Patterson said.

In an invited comment, the Member of Parliament in seeking to clarify that this publication had in fact undervalued the reported payments being made for the power reminded that agreement states that Urbacon Concessions Investment WLL will be paid US$ 0.0662 per KWh as monthly rental and US$0.0098 per Kwh as operation and maintenance charges – a total of US$0.076 per kWh for the of 36MW, “a seemingly minuscule amount, however the devil has always been in the details.”

Expounding further Patterson reasoned that the 36MW plant x 24 hours = 864 MW at maximum daily generation and with its projected availability 96 percent of this would mean a projected daily generation of the equivalent of 830,000 kilowatts.

According to Patterson, 830,000 kilowatts x US$0.076 = US$63,080 per day and as such US$63,080 x 365 days x 2 = US$46,048,400.00 (2-year contract).

The former minister believes that it would be more appropriate to say the company would be paid closer to US$23 for each year for the rental and operational costs.

According to the Member of Parliament, the recent disclosure by GPL on the rental of the power barge and applicable rates “should be of grave concern to our citizens, having created the problem, by their poor planning and maintenance of the existing generating stock, their knee jerk solution is to rent a power barge at unnecessarily high costs in comparison to industry standards.”

The recently inked contract by the power company with Urbacon Concessions Investments, W.L.L (UCI) is to charter the vessel with a total installed capacity of 36 Megawatts (MWs) for a period of two years.

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 on Thursday, “the contract requires GPL to pay UCI a fee of 6.62 US cents per kWh as a monthly charter fee for the power ship 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. This in addition to the 0.98 US cents maintenance fee.

According to the power company, the 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 a 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, Prime Minister Brigadier (Ret’d), Mark Phillips, convened a special meeting with Parliamentary Committee members, private sector representatives and executives of GPL at the Office of the Prime Minister, where he was provided an opportunity for a comprehensive update by GPL’s executive management on the company’s current capacity and its short to long-term measures for reliable energy supply.

GPL’s Acting Chief Executive Officer, Kesh Nandlall explained that the number of customers grew from around 140,000 in 2008 to over 227,000 currently, with a total annual gross generation increasing from 600 million megawatt-hours to 1.2 billion megawatt-hours and the peak demand growing from 73.5 megawatts to 186.4 for that period.

To meet the rising demand Nandlall said that GPL is making efforts to increase its generation capacity to address the current peak demand of 180MW as of April 2024.

He pointed out that in order to sustain system stability; the company has to maintain a spinning reserve of 14MW, which requires an availability of 194MW at the current peak demand.

He stated that currently, the Demerara Berbice Interconnected System has an available capacity of 177 megawatts, including 20 megawatts from the Columbia Plant, which has a total capacity of 28.9 megawatts.

Once fully operational, this plant will operate at 85% capacity by the end of April. GPL’s capacity will be further boosted with the arrival of a 36-megawatt net capacity power ship, which will come online at Everton, Berbice, in May. These additions will bring approximately 218 megawatts of firm generation capacity.

Additionally, it is expected that in May, a 6.9 MW generation unit will be added, and in July 2024, a 5.5 MW generation unit will come online at Kingston after maintenance, making an estimated total of 230.4 MW available to GPL.

Meanwhile, based on demand estimates, the Government plans to procure an additional 30-40 megawatts by the end of 2024. Additionally, the Gas-to-Energy project will add another 300 megawatts in two phases by the end of 2025.

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• According, broadcast interview, David Patterson, Guyana Power and Light Incorporated, interrogation

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