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Powering Papua New Guinea, Empowering Communities
by PNG Business News - April 21, 2021
PNG Biomass is Oil Search’s renewable energy and sustainable tree farming business. Subject to a final investment decision, PNG Biomass will be Oil Search’s first targeted investment into the energy transition.
Establishing a renewable energy and sustainable development project in the Markham Valley in Morobe Province is a strategic and sustainable diversification of the Company’s energy portfolio. Designed with a two-fold purpose, PNG Biomass will be powering PNG with domestic low-emission renewable energy and empowering communities by using an inclusive economic growth model.
PNG Biomass leverages the strengths and experience of Oil Search in delivering world class infrastructure projects. By building capability in environmental, social and economic responsible energy investments, Oil Search helps offset carbon emissions, develop attractive growth options at an acceptable risk level, and opens pathways to new global partnerships and financing opportunities for both Company and country.
The value created by PNG Biomass is shared between landowners, communities, women and youth, future generations, local and regional businesses, provincial and national government, and the Company itself. It is equally a sustainable investment for Oil Search and an investment in the people and prosperity of PNG.
Powering Papua New Guinea
As an integrated renewable energy project, PNG Biomass will offer biomass power, solar energy, and battery storage technology to generate clean, affordable and reliable energy for the Ramu Grid. This project demonstrates how modular, incremental, diversified and dispatchable energy can pave the way for a new power paradigm that diversifies the country’s energy mix, makes power supply reliable, and helps PNG transition to renewable energy by 2050.
Delivering 30 megawatt of electricity to the Ramu Grid, the biomass power plant is integrated with 16,000 hectares of dedicated, sustainable forestry plantations in the Markham Valley established and maintained by local landowners and communities. PNG Biomass will also oversee construction, operation and dispatch of an adjacent 11 megawatt peak solar farm and battery energy storage system, both grant-funded and owned by PNG Power. Together, the biomass power plant and solar farm will provide the Ramu grid with up to 40MW of renewable energy with the battery storage providing firming and grid stabilisation services.
By using renewable energy there will be significant carbon emission reductions as generation from diesel and heavy fuel oil (HFO) will be displaced. The battery storage technology will enable load-shifting of solar energy to the highest demand at peak hours and displace more diesel and HFO. As an integrated project there will be ancillary services benefits, including grid stabilization by providing baseload supply to the city of Lae – which represents about 90% of the Ramu Grid load.
PNG Biomass delivers many benefits beyond electrification; it is designed to deliver sustainable development closely aligned with PNG development priorities and the Sustainable Development Goals.
When fully operational, PNG Biomass will have 500 ongoing local jobs and driving the creation of 2,000 indirect jobs across the region. In 2020 some 300 full-time equivalent (FTE) jobs were created for local in the Markham Valley. The majority of jobs (280 FTE) is contracted directly to community members and landowners through Community Business Groups.
With communities and landowners at the core of the project, they can realise the full potential of sustainable rural inclusive economic growth opportunities created by PNG Biomass. Throughout the Markham Valley, close relationships with communities have been built since 2011. Landowners participate actively in the Project by offering select areas of their land for the establishment of sustainable forestry plantations. Landowners come together in community-owned business groups to provide PNG Biomass with labour and services to prepare, plant and maintain plantations. This way PNG Biomass creates significant and diverse income streams for local communities.
PNG Biomass encourages and supports women and youth to take advantage of business opportunities to generate substantial benefits and income streams. In particular the agroforestry practice commonly referred to by communities as ‘intercropping’ is popular. Markham Valley communities receive support to help them get started with growing small-scale and short-rotation cash crops in between the rows of trees on plantation land. A team from PNG Biomass regularly conducts intercropping training and field demonstration, focused on ensuring communities understand the basic requirements of weeding, distancing crops from trees and plough lines.
In early 2019 a baseline assessment was conducted on intercropping practices across the Markham Valley. The results included that best harvests and incomes are generated from pumpkins, melons and cucumbers. Women reported single harvest incomes of around K3,000 from intercropping on areas smaller than half a hectare. With, at the time, around 400 families involved in small scale intercropping, each harvesting twice a year, they generated together an increase in household income of K2.4 million a year – a number that communities themselves claim to be conservative as they assert the overall intercropping income stream is substantially higher. With more land opening up, more and more local farmers are taking up this agroforestry practice.
Entrepreneurs are also making most of opportunities arising; putting their forestry skills to work in the Markham Valley. Two former employees of PNG Biomass are leveraging the skills and experience they gained during their employment in the Company’s forestry division. Both have founded their own forestry businesses and are now suppliers of PNG Biomass, providing expert forestry services.
Community business group development
PNG Biomass provides ongoing support to landowners to organise themselves in formal community business groups. The Zif Faring Business Group, representing the business interest of communities around Chivasing village, provides employment opportunities for over sixty landowners contracting them to PNG Biomass.
In June 2020, Zif Faring Business Group was also awarded a contract for the provision of transport and delivery services to PNG Biomass. Management of the Zif Faring Business Group subsequently decided to purchase an Isuzu truck to dedicate to the transport services under the contract.
Native bee program
Switpela Bi Hani was established in 2018 by PNG Biomass as a native stingless bee community development program aimed at helping communities establish a local market for bee products in the Markham Valley. Community training was provided by PNG Biomass in 2018 and 2019, with community members driving expansion themselves in 2020 due to limited options during the COVID-19 pandemic for the continuation of training by foreign bee experts. Community uptake is extremely good, with hundreds of local hives established and new bee-hive materials trialled.
More and more communities are participating and together creating a thriving native bee industry. The beekeepers are predominantly subsistence farmers, family units, women groups, and small-scale entrepreneurs – some are involved already with PNG Biomass as tree farmers while others are non-tree farmers.
PNG Business News - March 19, 2021
Power Plant Site Cleared in Markham Valley
PNG Biomass is Oil Search’s renewable energy and sustainable tree farming business. The project is still subject to a final investment decision by Oil Search, now planned to take place in the second half of the year. The formal ‘go-ahead' has been postponed several times due to a lengthy process with the PNG government to fulfil their promises to move the project forward. Oil Search will shift the project rapidly into construction once the PNG government addresses the final outstanding issues, adding 30 megawatts of renewable, affordable, and clean energy to the Ramu grid and Lae businesses. Michael Henson, Project Director of PNG Biomass, said, “We designed PNG Biomass with a two-fold purpose; we will power the Ramu Grid with low-emission renewable energy, and to do that we use an inclusive economic growth model to empower communities to maximise benefits for them. The value we create with PNG Biomass is shared between landowners, communities, women, youth, future generations, local and regional businesses, provincial and national government, and Oil Search. This is a great example of creating shared value. This project is equally a sustainable investment for Oil Search in the energy transition and investment in the people and prosperity of PNG.” Henson said that it is now time to realise the benefits of this project. “Over the last year, we have expanded our tree farm to 3,000 hectares. We signed the long-term lease with the landowners of the power plant land and just finished clearing the power plant site, we are ready to commence construction. In the next few months, boreholes will be drilled to supply water to the power plant. We just need the Government to deliver on its commitments to move this project forward,” stated Henson. He added, “Landowners of the Ganef community were glad to see us clear the site, but they are getting restless. They have committed their land to build the power plant, but construction has not commenced yet. We reach out to them daily to provide information and explain the delays, but it is difficult to explain the bureaucracy and politics in PNG. Fortunately, we have a great working relationship with our communities. The Ganef landowners are thankful for the borehole we drilled in their community. We also installed a solar pump and water tank so they now have a fresh water supply.”
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PNG Business News - May 13, 2021
National Airport Corporation to Focus on Redevelopment Projects
The National Airports Corporation plans to devote more resources to the redevelopment projects at Kavieng, Tari, and Mendi airports as part of the Civil Aviation Growth Investment Program. With the exception of three airports, all airports under the CADIP program are on a budget, according to NAC acting managing director Rex Kiponge. Apart from Jackson Airport in Port Moresby, Kiponge claims that the majority of the country's airports are unable to handle the newly launched F100 aircraft. “The introduction of F100 aircraft has deteriorated the condition of runways in PNG. Under CADIP, fencing and runway length deficiencies will now meet the F100 and ICAO requirements. CADIP was implemented to meet the minimum PNG Civil Aviation Rules (CARS) and the International Civil Aviation Organisation (ICAO) standards and recommended practices in all the 22 airports in the country. “The F100 aircraft require a minimum runway length of 1900 metres –– only three airports meet this requirement.” The F100 will be able to land at 12 airports thanks to a CADIP runway length upgrade. Port Moresby is now the only province that meets the operating criteria for F100 planes. Standby control, security fencing, apron parking, runway, taxiway, and apron strength, and a runway length suitable for takeoff at maximum payload are all part of the 22 airport upgrades. Kiponge recently visited the three airports and expressed his satisfaction with the development. Contractors have already finished construction on the security fence at Kavieng Airport, and work on the runway extension is going well. Once the runway extension is complete, the contractors can begin work on the terminal. He mentioned that the runway extension at Tari Airport is complete, and contractors are currently working on the apron, which will be finished until the runway extension is completed. Owing to the contractors' inability to obtain materials for the runway at Mendi Airport, NAC has requested that they redo the runway before moving on to the other areas. “Despite whatever issues within NAC, I will ensure that all 22 NAC’s airports undergoing upgrading will be completed and I will put in a lot of efforts and focus to makes certain work is done well and completed,” Kiponge said.
PNG Business News - May 13, 2021
Govt to Focus on Downstream Processing
The government is putting a lot of effort into encouraging downstream production in the region. This was said by Prime Minister James Marape during a visit to Paradise Foods Company Limited. “We are focused on downstream processing as far as going forward is concerned –– instead of exporting raw products,” said Marape. “We want to go downstream to satisfy our local markets as well as export to economies around us.” PNG is fortunate, according to Marape, to have access to 60% of the world's gross domestic product (GDP) through the APEC network. “As well as, not just the APEC network, but in the vicinity of PNG’s accessibility to markets, we have over 4 billion people from the Pacific, Northern Asia, Western Asia and Northeast Asia put together. “So to satisfy our local markets in PNG for our 8 million-plus people, as well as the opportunity of exporting to markets closest to us like our neighbouring countries.” Marape has stated that he supports downstream production and marketing of PNG's natural resources both locally and internationally. “Today, I am privileged to visit an industry that has been at work since 1945, and I’d like to thank Paradise Foods Company Limited for doing a wonderful job and feeding our country.” Marape promised that the government will help the industry and market.
PNG Business News - May 13, 2021
Mayur Discusses Power Plant Project in Lae
Mayur Resources Ltd says it has formed an ongoing relationship with the State negotiation team to discuss and finalize a power purchase agreement (PPA) for its planned power plant in Lae, Morobe. The organization was waiting for the State negotiation team's makeup to be finalized and signed off, according to managing director Paul Mulder. After that, he said, the Enviro Energy Park (EEP) project's final discussions and negotiations will begin. Mayur's planned 52.5-megawatt EEP project is an advanced power plant that will produce more efficient and cheaper electricity than current solutions by combining conventional thermal energy (sourced from the company's wholly-owned Depot Creek project), solar, and biomass woodchip, while also supplying co-generated steam to nearby industrial users who were burning diesel for their steam needs. The EEP, which is near Lae, will also have steam as a by-product for local industrial uses, and potential dual fuel systems will allow for the use of diesel. “The energy park would balance the need for new environmentally friendly technologies and reliable energy,” Mulder said.