In a ceremony last Friday, the Prime Minister, James Marape, Minister for Public Enterprise and State Investments, Sasindran Muthuvel, together with Kumul Petroleum Holdings Managing Director, Wapu Sonk, and NiuPower Chairman, Peter Botten, commissioned the US$100 million gas-fired 58MW Port Moresby Power Station.
Also officiating at the opening was Minister for Trade and Industry, William Duma, Minister for National Planning, Sam Basil, Governor for Hela, Philip Undialu, Managing Director of MRDC, Augustine Mano, and CEO of Dirio Gas and Power, Ashok Jain.
The Prime Minister underlined the significant nature of the occasion as a step in the right direction toward a transformation that will take place in the country toward cheaper energy from the country’s own domestic gas resources.
He stated that a transformation toward cheap and reliable power can unlock and unleash the potential of the country by encouraging growth in the economy, businesses and other sectors – such as forestry, fisheries and manufacturing.
Together, over the course of their speeches, the four dignitaries painted the roadmap for this energy transition. Minister Muthuvel pointed to the starting point, the moment when the Government made a clear policy decision to allow private investors to become energy generators in the form of an ‘independent power producer’ (IPP).
Oil Search and Kumul Petroleum Holdings joined forces to establish NiuPower as an IPP to demonstrate how private investment through a public-private partnership can become a catalyst in unlocking the true potential of energy in PNG.
Leveraging strong private sector financial and operating skills was only the beginning, the importance of partnerships and world-class contractors should not be underestimated. The construction team from Wartsila and Clough received praise for delivering the power plant on time, under budget, and with a world class safety record. With a predominantly PNG construction workforce of 300 people, made up of 90% local staff, millions of man hours were logged during construction with zero incidents recorded.
Partners and stakeholders, such as the Department of Treasury and the Treasurer, Bank of Papua New Guinea, Conservation and Environmental Protection Authority, the National Executive Council, the Independent Consumer and Competition Commission, Electricity Management Committee, Department of Petroleum and Energy and PNG Power were thanked for ensuring the power plant eventually received all approvals and became compliant.
ExxonMobil received special recognition for safeguarding the fuel supply for the power plant by providing domestic gas from PNG LNG.
The Port Moresby Power Station is currently providing up to 10MW of power into the Port Moresby Grid while NiuPower is funding the construction of a new transmission line from Gerehu Stage 6 to the Port Moresby Power Station. Due to be ready by the end of January 2020, the new line will enable the power plant to fully dispatch its 58MW capacity and realise the potential benefits of having cheaper, reliable and clean power into Port Moresby and alleviate the issues with high costs and frequent blackouts.
What makes the Port Moresby Power Plant unique is that it has six high efficiency internal combustion gas engines that ensure high thermal efficiency compared to other gas-fuelled generation options. They use less fuel for the equivalent energy output in other generation technology, cut down on operating costs and optimise emissions.
When fully online next year, the gas-fired power plant will enable PNG Power to execute a fuel switch: replacing expensive diesel generation with gas-fired power will significantly reduce the cost of power generation. PNG Power has estimated that it can save close to K100 million a year through such a fuel switch. Cheaper energy, however, should be passed on by PNG Power to its customers as it is in the national interest to deliver cheaper electricity to our people, stressed the Prime Minister.
Today, the Port Moresby Power Station is the most sensible economic solution for power generation in Port Moresby. It provides highly efficient cheap power by utilising a domestic resource that can deliver to the people of PNG a reliable, highly efficient, and environmentally responsible power generation system.
The energy transition only starts with domestic gas, which is an excellent medium-term solution for next 25 years, while the country plans for the long-term future and builds hydro and other renewable solutions.