Power generation expensive: Group

The National Business

POWER generation will be expensive and challenging in developing countries such as Papua New Guinea, according to an industry group.
The Independent Power Producers (IPP) PNG Industry Group chairman David Burbidge revealed this to The National after publishing an article on the challenges of cheap power in developing nations.
He said that this was a reality faced by PNG yet often misunderstood or ignored by policymakers and found to be misguiding negotiations by PNG Power Ltd over Power Purchase Agreements with IPPs.
“The unfortunate outcome of mismodelling tariffs for power in PNG is creating an unrealistic expectation of potential very cheap power prices at a price-point no IPP can realistically deliver today in PNG,” Burbidge said.
“There are many challenges that island nations face in powering their economies with affordable, reliable, sustainable and accessible electricity.
“The issues that faces both the IPPs and the utility revolves mostly cost, scale, demand and reliability – as well as an increasing push for renewable energy.”
He said that the challenges of delivering cheap and reliable power in PNG include:

  • High connection costs for individual households whose usage is expected to be low;
  • Merely adding generation capacity without a significant investment in upgrading transmission and distribution networks does not reduce price or improve reliability;
  • Large scale generation capacity will not result in cheaper power unless it is used at or near capacity; and,
  • Costs of delivering power projects in PNG is higher than for projects in other regions like Asia.

“For PNG, the pathway to developing reliable and affordable, and ultimately cheap, power is not forged overnight. It requires a collective effort by the utility, the regulator, Government and IPPs to overcome systemic challenges and misconceptions.
“PNG need to invest incrementally in electricity infrastructure development that builds the country’s industrial base to grow future demand which in turn opens pathways for energy solutions that are larger scale and lower cost,” Burbidge said.
“The reality is that PNG’s power sector cannot evolve overnight to immediately deliver the cheap cost for construction and provide the price point of large-scale overseas economies,
“Right now, the country needs smaller projects matched to grid demand for incremental and distributed growth.”

4 comments

  • An alternative is to utilise northern Australia massive land mass to have extensive solar/wind/storage and with base load of Nuclear and Coal power generation export to PNG and Indonesia using World Bank loans. Chinese Belt and Road initiatives can be used for critical infrastructure.

  • My goose, …Stefan Lewandowski,…. I cannot buy into a nice little cheap shot out here in putting up an IPP in a foreign land to be supplied into PNG. What on earth are we continuously wearing this kind of thinking cap? My River Purari can generate 12000 megawatt Power which can be build with just under K450.0 million which can be borrowed from Chinese Exim Bank or World Bank or any other institution. Stefan is saying PNG doesn’t have massive land? No running river? No cheap labour? do not bring US$ into the country? Who is this cowboy? Landowners don’t want to go chaim all the development funds, but simply say they want to participate in spin Offs. Besides, this is the only cheapest Insurance Premium anyone can pay in the form of Land compensation, LO participation and other issues put together in an Insurance Scheme Called “SOCIAL INSURANCE” if Stefan doesn’t know. Next time, don’t throw up a cheap shot like this!!!!!

  • alternative solution is ,we have the lab our and the tree that in grown in the country, so we can replace the cross arm and the pole cheaply in the country,with that in mind we can manufacture the cable in the country by ordering flate sheet fo copper wire and aluimimum in to the country just like the nail that is manufacture by atlas still png ,don’t make as fool ok

  • Hold on! seems like we are living in middle east countries and we looking for rivers ,Come people are we going bankrupt with ideas .We have Mongi in Fischafen that can generate magnitudes of power that can sustain whole mainland PNG..

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