Hydro power to drive renewable energy

WITH solar and renewable energy lacking clear strategic development plans, hydro-power is expected to drive future renewable energy generation, as evidenced by the launch of several new hydro projects in recent years.
Critically, many of these projects are under development by KCH, with private sector participation enabling PNG to move forward on projects which might otherwise be too capital-intensive.
In a Feb 2017 assessment of PNG’s PPP Act 2014, Australia’s Pacific Legal Network wrote that PPP project implementation has been limited so far, with the government’s planned PPP centre yet to be established. The firm noted that a “shining light” in the PPP space is KCH, which manages a portfolio of critical infrastructure projects valued at more than $7bn, of which $6bn are planned to be delivered using a shared public and private investment model. A large share of these are hydroelectric power projects, including the Karimui, Ramu 2 and Mendi hydro projects.
Karimui
The largest hydro project currently under development in PNG is the 1800-MW Karimui project in Chimbu.
The dam will be located upstream from the confluence between the Waghi and Asaro Rivers, with its layout including an area of rockfill dam, two 130-km power tunnels and a powerhouse area.
Site access will be through a new 90-km permanent access road connected to the 50-km Chuave section of the Highlands Highway.
The $2bn project is expected to begin construction in 2017, with a completion date set for 2023. KCH signed a memorandum of understanding (MoU) with Italian construction company Salini Impregilo in April 2015, and in Feb 2016 the company released a feasibility study for the project, which highlights requirements beyond dam construction, including the construction of roads and bridges leading to the dam.
The study calls for the upgrade or replacement of 42 bridges between second city Lae and the dam site. Although the project’s financing scheme has not yet been made public, KCH reported in Feb 2016 that it aimed to formalise a PPP modality by the end of the year, either under a build-operate-transfer model or a build-own-operate-transfer model.
Ramu 2
Another significant hydro project under development is the Ramu 2 scheme, which will be located downstream from the existing Yonki Dam on the Ramu River near Kainantu in Eastern Highlands Province. The $2bn, 180-MW project is expected to boost the facility’s capacity by 194, per cent to hit 273 MW and boost PNG’s total generation capacity by 36 per cent.
It is being developed under a PPP model in partnership with China’s Sinohydro Corporation and Shenzhen Energy Group. Developers had originally planned to begin construction on the project in 2017; however, delays have set this date back. PNG Power reported in May 2017 that contract negotiations are still ongoing, although the company anticipates the project will still move forward.
Edevu
Private sector interest in hydro projects outside of KCH’s portfolio has also increased in recent years. In February 2017, for example, state-owned PNG Power officially launched the 50-MW Edevu hydropower project, located in the mountainous Kairuku-Hiri District in Central. It is expected to provide an additional 50 MW of supply to Port Moresby.
The K640m ($202.9m) project is being developed by Chinese company PNG Hydro Development, with plans to use the Edevu River to generate new electricity at the site.
According to Andrew Ogil, chairman of PNG Power, the state is currently negotiating a power purchasing agreement to supply Port Moresby starting in 2020. It is being financed by the Hunan Provincial Government and the Export-Import Bank of China, along with AG Investment Group.
Small-scale projects
It is not just large-scale projects that are important to the country’s energy mix. Small-scale hydro projects are also proliferating across the country, playing an important role in reducing use of costly diesel generators.
The Korean Southern Power Company (KOSPO), for example, announced in September 2016 that it had signed a MoU with the government of PNG to secure additional sources of electricity using hydro-power, with the company focusing on rapid construction of small-scale hydropower projects, which have the potential to be located all across the country.
Local firm PNG Forest Products has already established three small hydro stations with a combined installed capacity of 15 MW in Morobe, and PNG Power has also begun construction on the 3-MW Divune hydropower plant at Popondetta, Oro.
Solar and Biomass
The government is also making steady progress in expanding its renewables base. In May 2014, for example, the International Finance Corporation announced it had launched a new project aimed at attracting private investment into rooftop solar generation, and in February 2017, PNG Power signed a MoU with South Korea’s K&P Investment Company to conduct a feasibility study for a 50-MW solar farm, which would feed into the Port Moresby system.
PNG Biomass, a subsidiary of local oil and gas company Oil Search, is also moving forward on the 15-MW Markham Valley biomass project, located roughly 55 km north-west of Lae.
The plant would be fuelled by trees grown in the valley, and feed into the Ramu system.
According to local media reports, front-end engineering and design work is expected to be completed before 2018. – oxfordbusinessgroup.com