Purchase of 50MW power could cost GPL $375M monthly

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…Environmentalist urges solar investment instead

Using figures from the last Power Purchase Agreement the Guyana Power and Light (GPL) Inc. had with Giftland Mall, it is understood that the 50 megawatts (MW) of power that the company is seeking to purchase, can cost around $377 million, monthly.
Last Sunday, the power company published an Expression of Interest (EOI) where it said it is hunting for Independent Power Producers (IPPs) that can supply 50 MW of power to the national grid for three years, commencing from March 2023.
GPL said, “the state-owned electric utility company, invites technically and financially sound IPPs to submit an EOI to supply a total of 50 MW HFO-fired Firm Power Generating Capacity (gross) on a 24 hour basis with appropriate substations to interconnect with the 69 kV National Grid (the project) by March 2023 for a period of three years.”

However, this project can add a $375 million monthly bill to the power company. In January 2020, GPL inked a power purchase agreement with Giftland Mall proprietor, Roy Beepat, to supply the national grid with 4.5 MW of electricity.
It was later revealed that an estimated $34 million each month was being forked out to purchase the badly needed power from the Giftland Mall, to compensate for the shortfall of electricity. Beepat said that the power itself would cost around $9.9 million per month while fuel cost is estimated to be $29.5 million.

This means that if GPL was paying $34 million each month for 4.5 MW, 1MW of power would cost just over $7.5 million. Using the $7.5 million per megawatt for the 50 MW GPL is currently looking to add, this would amount to $375 million. The monthly charge to supply the added power to the grid could therefore be over $370 million. This is also a mere projection as the cost for fuel has also increased since 2020.
As purchase of the power remains in debate, one member of civil society who has been very vocal when it comes to safeguarding the environmental, Mr. Alfred Bhulai in a letter the daily newspapers urged that government invest its resources into solar energy instead.
He said, “The hidden costs of the gas-to-power projects are slowly bubbling up: GPL has to find 50 MW of heavy fuel oil generation; and they are looking for some other company to deliver seamless connections without transmission and distribution problems.”
To this end, Bhulai reasoned that GPL is caught in an “inefficiency trap”, as it still only aims to deliver electricity at 80 percent power factor, and consumers are allowed to operate at “unbelievably lower power factors”. In addition, he said he also noticed that the many transformers required in this system seem to have no maintenance.

According to him, checks for moisture and oxidation are not done until a transformer blows out to indicate replacement. “There seems to be a normal state of emergency in running things. The gas-to-power project panders to these inefficiencies and lets GPL off the hook. One day the gas will be finished; what then? The immediate answer is to invest instead in solar power beginning with the new housing areas being built,” the environmentalist urged.
Bhulai suggested that 10,000 new homes can be powered by 50 MW of solar energy. He said, “Let people manage their own electric power. 10,000 new homes can be comfortably powered with 50 MW, for which there will be no technical and ‘commercial’ losses. Get rid of the old power line mentality, the inefficiencies and instabilities of which subject us to unreliable electricity.”


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