CEO of the Guyana Power and Light Bharat Dindyal said that the need for an additional 26 megawatts of power is a two-fold one, having its genesis in the failure of another older Wartsila unit at Garden of Eden and the delay in the completion in the frequency conversion exercises, which would see other units being taken out of commission temporarily.
The company will make a purchase of a new power plant comprising three Wartsila 8.7 megawatt units which will be installed at Vreed-en-Hoop, next to a new sub-station being built there as part of the Chinese-financed transmission and distribution upgrade project.
The Parliament in the early hours of Friday morning approved a supplementary request in the amount of $5.3 billion for the project. Through supplementary provision as well, the Parliament approved the returned request of $1 billion as part of a $6 billion subsidy to the electricity generating company.
“[Some time ago], we had brought in a new generator [which went bad] at Garden of Eden. This new one is essentially a replacement for that one,” said Dindyal. He explained that the insurance underwriters sent in a team of experts to ascertain what went wrong with the unit but so far they have not been able to do so. He said the Wartsila machine encountered a failure in February of 2010 and it has baffled technical persons trying to ascertain what went wrong. “They haven’t been able to ascertain which component caused the failure,” said Dindyal. With this machine out of operation it means that about 11 megawatts were taken out of the system.
Further, he said the two Wartsila sets acquired in 2003 and located at Garden of Eden are now approaching 20 years of service life and therefore would need to be taken off from heavy generation. “We decided out of caution to remove these from regular service and have them on standby,” he said.
“We are also doing frequency conversion but this cannot happen before next year. With this [exercise] we will lose [temporarily] another 11 megawatts,” Dindyal said.
“Right now there is a demand and we have to fix the situation,” he said, when asked to comment on the sudden need for the company to require 26 additional megawatts of power. He said that while the company has a development plan, the lack of financing causes the delay or deferment of capital works and this takes a toll, resulting in the need to fill gaps in capacity when machines have to be taken offline. “We are running without adequate standby capacity,” he said.
“We have to maintain consumers’ confidence in GPL so that when the Amaila Falls Hydroelectric Project comes on stream, those who now self generate would be confident to return to the grid,” he said, explaining why the company saw fit to make the investment. He explained that even with Amaila coming on stream hopefully in 2016, there will be a need for additional stand-by fossil fuel generation, because of the need for maintenance of the hydro facility and because it is projected that there will be three months out of every year that the flow of the water in the Kuribrong River would not be strong enough to facilitate hydropower generation.
He said too that after one year of Amaila’s operation it will have to be closed for maintenance and after three years it will be outstripped by the pace of growth of demand for electricity.
Asked whether the country would not be going against its low carbon development thrust by investing in more fossil fuel generators, Dindyal highlighted the need for stand-by fossil fuel power even with Amaila fully operational, and said that the Wartsila units, especially the newer ones, can be converted to run on natural gas, a cleaner form of energy.
Commenting on the restored subsidy of $1 billion, Dindyal said when this amount was excised from the $6 billion, the company had taken a decision to scale back come capital works and maintenance. “Now that we got back the $1 billion, we are putting back some capital works,” he said.
Dindyal said that the Chinese contractor working on the US$40 million transmission and distribution project had encountered some delays but things seem back on track after GPL engaged the contractor. He said that the link to the West Demerara through the underground cable and connected works should be completed by October.
Speaking with this newspaper, Chairman of the Board of Directors of GPL Winston Brassington said that the frequency conversion that the company is undertaking will continue into next year and that when this occurs, generators have to be taken out of service for three months at a time.
He too said that a number of units are approaching the end of their service life of 20 years and the company is also facing increasing demand for electricity. “We took this opportunity from Wartsila where some engines which were destined for another country were made available to us. Further, we are getting them for about US$1.1 million per megawatt,” he said, calling this price very favourable. “Further, the euro was weak,” he continued, explaining the rationale of making the purchase of the machines which he said will be operational by the second quarter of next year. “We said that next year is not far off and it would have cost us more had we waited until next year,” he said.
Brassington said that the deferment of capital works has not gone without consequences and that it increases the risk to the reliability of the network. “This $6 billion is the minimum that we had needed. We have a lot of maintenance to catch up on and we have to make these investments,” said Brassington.
Members of the opposition had questioned the government over the request for the purchase of the new generators and asked why it had not been foreseen and budgeted for in the regular manner.
