No plan for energy sector development, says ADB

By NATHAN WOTI
PAPUA New Guinea suffers incessant power issues because it lacks a government-led plan for energy sector development in the country.
The Asian Development Bank says in its report ‘Asian Development Outlook’ that PNG’s continuous power supply and water supply disruptions in main urban centres like Port Moresby, Lae, Mt Hagen, Madang, and Rabaul, has affected businesses significantly, resulting in escalating operational costs and affecting overall competiveness.
According to the Bank, the country’s electricity supply is generally poor and blackouts are frequent because of inadequate capacity and aging networks.
According to ADB PNG Power Limited (PPL) has deprioritised maintenance on its network and generation assets because of utility’s deteriorating financial condition.
This is driven by low tariffs, last adjusted in 2013, which barely recover PPL costs, and high technical and commercial losses.
The Bank said PPL’s aging network infrastructure led to high losses, while electricity theft, illegal connections, and a low bill collection rates left the state’s power company with revenues well below expenses which was commercially untenable.
Meanwhile, PPL conducts internal generation and grid planning that is neither backed nor aligned with the national regulator or the government’s national budget financing plans.
Since 2013, private sector participation has been allowed in power generation.
According to ADB report, this has resulted in independent power producers (IPPs) making ad hoc investments that are not coordinated with grid development.
Although the government set a target in 2010 to achieve 70 per cent electrification by 2030, less than 20 per cent of the population can currently access electricity.
The report highlighted that self-generators and back-up generators (entirely diesel based) are common for businesses and residential areas and have increased over the years due to repeated blackouts.