Help our electricity company

PNG Power Ltd has 10 hydro power stations in the country with a total capacity of 170 megawatts which are supplemented by a number of thermal power stations and privately-operated gas-fired power stations in Port Moresby recently.
Delays in maintenance and spare parts is a critical issue affecting hydro performance and efficiency coupled with the aging generation assets.
In the past years, poor asset management has resulted in the generators performing below expectation and that impacted revenue generation and high fuel costs to PNG Power.
This problem is complicated by poor work culture and lack of knowledge and skills to rectify maintenance issues on a timely basis.
Going forward, the State Enterprises Minister Sasindran Muthuvel and the PNG Power board should ensure the new managing director puts in place a routine maintenance programme on hydro generating assets, spare parts are procured on a timely basis and that the Government invests in new hydro in Purari in Gulf, Brown River in Central and Karamui in Chimbu.
In these undertakings, the landowners should be key partners in the development of these projects as part of Marape’s Take-Back PNG slogan.
PNG Power Ltd does not have a reliable and updated asset management system to manage its vital generation, distribution and transmission assets.
An asset management system is a vital management tool to manage an organisation’s key assets.
For example, an asset management system would assist the company to put in place clear maintenance programmes from which to carry out routine maintenance on its plants in order to maintain maximum capacity.
PNG Power electricity generation uses both hydro and thermal generation.
Overall, 67 per cent of the power needs in PNG are through hydro while 33 per cent are supplemented by thermal power stations.
PNG Power uses more than 30 million litres of diesel fuel for power generation annually.
At more than K150 million, this fuel cost is the biggest operating cost for PNG Power.
Profitability is strongly impacted by the overall level of thermal generation.
Fluctuations in international oil prices usually have a significant impact on fuel costs and budget.
I’m not sure whether if PNG Power has a strategic asset management plan in place to manage thermal power stations.
The strategic asset management plan is impacted due to lack of qualified manpower resources which is being addressed by the management.
Feasibility studies carried out into other sources of power generation have not been trialed out such as wind, coal and sea current; gas-powered (LNG) has been introduced in Port Moresby.
Hydro generation is less costly; however, the company is limited by working capital for hydro generation.
Even though there is potential to provide low cost hydro electricity generation as a competitive advantage to the nation that has not been done to actively promote hydro power to developers and operators of resources and industrial projects including possible expansion of downstream processing.
The new PNG Power managing director and the board should now focus on reducing fuel costs which accounts for over 30 per cent of the operational budget.
Fuel costs will continue to be significant and hence it is in the best interest of the company to have a resident in-house expert to perform analytics, review existing fuel flow mapping and advise the board and management on best fuel management practices and techniques on a monthly basis as a risk management strategy.
The absence of an effective fuel monitoring and evaluation personnel could impact on PNG Power’s profitability in the long run.
New hydro projects such as Karamui in Chimbu, Brown River in Central and Purari in Gulf should be fully explored and developed.
The Kumul Consolidated Holdings should expedite the review and financing of those projects.

Pawa Man
POM