ICCC seeking support for power initiative

The Independent Consumer and Competition Commission has advised industry stakeholders, interested independent power providers and public and continues to support the least-cost electricity generation options in the country.
ICCC in a statement said since the third party access (TPA) Code was established in 2014, the ICCC had encouraged independent power producers (IPPs) with least-generation cost to participate in the generation segment of electricity industry which is now open for competition.
“The wholesale price for IPPs are controlled by ICCC through the power purchase reference price (reference price) set under the TPA code,” it said.
“TPA code requires for establishment of reference prices for each transmission network owned by the transmission network owner: PNG Power Ltd. The reference prices are the maximum prices below which IPPs can sell their power to PPL.
“The principle objective of setting the reference price is to eventually see some reduction in the electricity retail price by regulating the wholesale price at the generation level.”
Since electricity generation market was opened to competition through the TPA code, there has been a growing interest from private sector to participate in the generation market.
The ICCC has issued a number of generation licences to IPPs.
“Markham Valley Biomass Ltd was recently issued a generation licence after it has met all the regulatory requirements including approval of its power purchase price under its power purchase agreement (PPA),” it said.
“Markham Valley Biomass will generate and sell 15MW power to PPL through its Ramu Grid.
“Currently, there are two major power projects for Port Moresby Grid being developed by NiuPower, 58MW and PNG Hydro, 50MW.
“ICCC is now having dialogue with NiuPower and PNG Hydro to have their PPA and licence fixed in order to generate and sell power to PPL through its Port Moresby
Grid.
“The ICCC supports these two power projects as they will not only relieve PPL from operating high cost diesel generators, but also help PPL’s to cater of growing electricity demand in Port Moresby.”
Whilst ICCC is in support of increasing entrant of new IPPs with least cost generation option, clarified that all IPPs who were interested to participate in PNG electricity industry “must first and foremost inform and discuss with relevant regulatory bodies such as the ICCC to seek their guidance on the regulatory requirements before going into investing and developing the generation projects”.
“ICCC has noted that certain IPPs have just gone ahead and built multi-millions Kina projects without any regulatory approval with view that regulatory approval can be obtained later when the project is up and running but this not appropriate,” it said.
“The ICCC cannot allow this, hence all regulatory approval must be obtained before an IPP project is developed and commissioned.
“Furthermore, all IPPs who are interested to participate in the electricity supply industry to supply wholesale power to PPL should take note of PPL’s established power development plans and the required power demand for respective grids and centres.”