GPL amends 50 MW invitation to natural gas only

Just over two months after it said it was seeking a dual-fuel, 50-megawatt (MW) generating plant, the Guyana Power and Light (GPL) yesterday altered the advertisement so that it pertains only to natural gas.

The amendment to the advertisement will raise concerns about the decision-making process at GPL amid ongoing power problems and criticisms from the public.

On September 3rd, GPL in an advertisement said that it was inviting expressions of interest (EoI) for a 50 MW dual fuel – Heavy Fuel Oil (HFO) and Natural Gas – fired power plant in or around Georgetown, East Bank Demerara or East Coast Demerara.

Yesterday, it changed this to natural gas only which it is believed will become available from ExxonMobil’s oil extraction operations beginning in 2020.

In yesterday’s advertisement, GPL said that it wanted technically and financially sound business parties to tender EoI for Independent Power Production on a Build, Own and Operate basis.

In order to prequalify, interested bidders must among other things demonstrate access to competent construction, commissioning, operation and maintenance contractors of at least two similar-sized facilities. Bidders must also have a strong balance sheet with a minimum capital of US$25m and demonstrate their ability to raise funds to undertake a project with a notional capital cost of US$100m at competitive terms and with a debt/equity ratio within the range of 80%:20% and 70%:30%.

Submissions of interest have to be made by 2 pm on December 12, 2017 to the secretary of the tender board, GPL, 91 Duke Street, Kingston.

A note at the bottom of the ad said that this EoI “replaces the previous one published” without identifying the ad specifically. This would be seen as a shoddy withdrawing of the previous EoI.

The September 3rd  ad had said that ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL) has uncovered commercial quantities of oil and gas in the Stabroek block, approximately 120 miles offshore. It said that EEPGL estimated that between 30 to 50 million cubic feet per day of natural gas could be made available for electricity generation in Guyana. This information was not repeated in yesterday’s advertisement.

Though ExxonMobil/EEGPL have referred to the gas find, early questions had been raised about the feasibility of piping this gas to the coast from such a far distance. The option of re-injecting the gas back into the well had also been floated.

GPL’s ad of September 3rd had also pointed to the likely growth in future power demand as a reason for seeking the 50 MW plant. GPL said it was forecasting that Guyana’s electricity demand will  more than double in the coming decade and existing plants would be decommissioned in the medium term. It said that the plant was targeted to be in operation by 2020. This information was also not included in yesterday’s advertisement.

With a current installed capacity of 174.39 MW, it would mean that GPL is seeking a new plant that represents 28.6% of current generation. GPL’s seeking of this new plant will also raise eyebrows because of ongoing chronic problems in its aged transmission and distribution system. Despite numerous promises, GPL’s system has been hit by an avalanche of trips and shutdowns in recent months.

There is also the question of the green economy. While President David Granger’s government is talking up a green economy, GPL will be contracting a greenhouse gas emitting plant. This will again raise concerns about whether government has a viable green energy plan. In its more than two years in office, it has presented no green energy project or projects anywhere near to 50 MW.

Norway which is in a forest partnership with Guyana has already balked at the proposal from the government that natural gas be an integral part of the country’s green energy plan.

 

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