Focus on power production, producers told

IT is better for independent power producers (IPPs) today to provide power to retailer PNG Power Ltd and later focus on electricity connection and maintenance, an official says.
This is to address the continuous power outages in the country.
PNG IPP industry group chairman David Burbidge said IPPs could build plants cheaper and operate more efficiently as had been shown in other markets.
“This leaves the power utility to focus on the network business and connecting customers,” he said.
“If the utility uses its capital to build power plants, there is less funding for necessary network upgrades and new customer connections.”
State Enterprise Minister Sasindran Muthuvel had said in Parliament recently that aging infrastructure and maintenance were the causes of many power outages.
Burbidge said this was the real issue.
“As the network ages, it does cause outages since any disturbance on the network affects the sensitive protection equipment on the generators causing them to trip off the system,” he said.
“As long as the Government supports PNG Power in always procuring the least cost option for each new increment of power, we will see a gradual reduction in generation costs.
“In other words, a competitive procurement process.”
Burbidge said more IPPs did not necessarily mean affordable electricity.
“The Papua New Guinea system is quite small which means new power increments are small,” he said.
“Small projects cost as much to develop and finance as big projects.
“So you don’t get economies of scale.
“The exception is solar which is less likely to benefit from economies of scale.”
PNG Power currently buys power from IPP’s NiuPower, PNG Biomass, PNG Forest Products, the Edevu hydro-power project and POSCO International.