– chairman says new engines will use natural gas from the local O&G sector

AS part of continued efforts to end ‘blackouts’ and improve power generation, the Guyana Power and Light Incorporated (GPL) has invested some US$41 million in acquiring new dual-fuel generating sets, which will utilise natural gas from the local Oil and Gas sector.
The investment forms part of GPL’s expansion programme, which is geared at ensuring that the utility company has adequate generating capacity. “It will be adding 46 Megawatts (MW) in total to the Demerara-Berbice Interconnected System (DBIS)…it allows us to expand our reserve capacity beyond what it is right now, so in the event of a failure in the generating system, we do not have to experience outages,” said Chairman of GPL, Rawle Lucas, in an invited comment, on Monday.

The new generating sets, which will be supplied and maintained by Finnish company, Wartsila, will complement the 22MW power plant at GPL’s Garden of Eden station, where a substation will be built. At present, GPL falls short of the total reserves needed in the system. While the international convention demands 10-15 per cent of reserves that function in cases of emergencies, GPL stands at 8 per cent.

With a new power plant in operation, it is expected to produce a surmountable amount of energy unlike any existing power plant in Guyana. It will also result in astronomical savings for the country since power generation costs will decrease. Lucas confirmed that the system has not been procured as yet, but the company is in the process of doing so. The project is expected to be completed by the end of 2020. “The project is being funded through a combination of our funds and borrowed funds,” said the chairman, adding that the generating sets are expected to be cost effective since it will be able to utilise natural gas.

In talking about this aspect of the project, he said: “We are anticipating natural gas and that means we have chosen to acquire the engines that have the capacity to use natural gas.”

Natural gas is said to be a mixture of gases which are rich in hydrocarbons. All these gases (methane, nitrogen, carbon dioxide) are naturally found in the atmosphere. The A Partnership for National Unity and Alliance for Change (APNU+AFC) coalition government had recently announced its plans for the establishment of a Natural Gas Terminal, which it envisions will create opportunities for employment for many Guyanese, while significantly reducing energy costs. This plan was embedded in the coalition’s manifesto which was launched last Friday.

A natural gas terminal is a structure for the storage of liquefied natural gas which can comprise of special tanks, ships, building structures, port infrastructures and pipelines. In its most recent find, ExxonMobil increased its estimated recoverable resource base for oil and gas in Guyana to more than 8 billion barrels. Director of the Department of Energy, Dr. Mark Bynoe, has stated that of this 8 billion, some 2 billion is estimated to be gas.
Natural gas is well recognised as one of the cleanest energy alternative and the Department of Energy has been making preparations to get natural gas on shore by 2023. With the possibilities already laid out, the department has started to examine potential sites where a “gas pipeline” can land, hoping to land same by 2023 and 2024.
Minister of Public Infrastructure, David Patterson, had also put forward the plan in 2019 for the establishment of a power plant through which the country can see its energy needs being met.

“What we are doing is building out the architecture. It comes in by pipeline and we will have a 188 megawatt power plant. “The money that you save that would have previously used to buy diesel and fossil fuel to run GPL you can put that back into the economy,” Patterson said in August 2019. Approximately 18 per cent of the country’s primary energy supply is derived from renewable energy – predominantly in the form of bagasse, firewood and solar PV — while the remaining 82 per cent of primary energy supply is sourced from imported fossil fuel – primarily diesel, heavy fuel oil and gasoline.

On average, approximately 1,836,300 barrels of fossil fuel are used to generate electricity annually, according to the Guyana Energy Agency (GEA)’s Chief Executive Officer (CEO), Dr. Mahender Sharma.

This translates to an estimated US$139.30 million on a yearly basis, based on the average consumption from 2015 to 2018. “With the emergent oil and gas sector, there is also an opportunity to utiltise the associated gas from the oil production for electricity generation. As such, a combination of renewable energy and natural gas can be the primary energy sources to accommodate Guyana’s energy needs,” Dr. Sharma said in 2019.

The coastal generation is largely handled by Power Producers and Distributors Incorporated (PPDI), which is also state-owned, and contracted to operate and maintain the power plants on behalf of GPL. PPDI was established in 2016 to take over power plants previously operated and maintained by Wartsila Operations Guyana Inc.

The company is responsible for a total electrical output of 106.7 megawatts within the Demerara to Berbice Interconnected System (DBIS), sourcing from four power plants, namely Garden of Eden (22 MW), Kingston #1 (22MW), Kingston #2 (36.3 MW) and Vreed-en-Hoop (26.4 MW).

It was reported on several occasions that this power generation is wholly insufficient, and GPL, over the years, has continued to explore the option of utilizing IPP. It has been noted that if GPL is to properly address issues which it currently faces, it needs to integrate greater private participation in power generation and move to focus more on electricity transmission and distribution, than on generation.