Photo credit: Samo Trebizan/Shutterstock
According to MP Douglas Tomuriesa, a K3 million hydropower plant capable of powering Goodenough Island in Milne Bay will be erected to serve the people of Kiriwina-Goodenough.
“We have already contracted it out, we have just recently paid out K380,000 to the contractor and they have told us that it will cost us about K3 million to build a hydropower station,” Tomuriesa said.
“That will bring in somewhere between 4.5 megawatts to 6 megawatts of power.”
He said that six megawatts would be more than adequate for the island and could easily power a big city.
Tomuriesa stated that the firm conducted surveys and that work will continue.
On Wednesday, he was in the district to officially inaugurate the Vivigani airstrip, a classroom, and a teacher's residence for Vivigani Primary School.
Meanwhile, Tomuriesa stated that four sawmills were located in Alotau and would be spread to the surrounding towns.
He stated that the sawmills will be utilized to chop lumber for home construction in preparation for the hydropower station's completion.
“It is not easy to get money from the Government so when you see power poles, classrooms and airports coming up, look after them.”
He said that the new projects will allow Vivigani companies to expand.
About 30,000 cocoa trees may be found on Goodenough Island.
“Just two weeks ago, a boat came and loaded 100 bags of cocoa and took them to Alotau, that is more than 25 tonnes of cocoa, that brought an estimated K102,000 into the economy of Goodenough Island.
“Organic cocoa is what the world wants, it is what the market wants,” Tomuriesa said.
On Goodenough Island, he added, nine cocoa fermentaries had been erected, with another eight on the way, as well as seedlings for local farmers.
Reference: Esila, Peter. The National (17 September 2021). “K3mil For Hydro Project”.
For the countrywide electrification rollout plan, the National Energy Authority will receive K1.5 billion over five years from development partners, donors, and financiers.
NEA chairman Joe Gabut described the concept and pointed out the immediate obstacles ahead in carrying out the program in an 18-page presentation at the Chamber of Mines and Petroleum media and community affairs workshop.
According to him, there is a lack of coordination in the rollout of the national electrification plan.
“The target is electricity access to 70 per cent of PNG households by 2030,” he said. “Specific implementation policies and regulations are required for off-grid rural electrification to be successful.”
He also stated that off-grid or rural electrification needs technical regulation as well as a flexible tariff structure. “Provisional permits will be issued to help developers or operators of mini-grids do feasibility studies and full permits will be issued to the developer or operator if the mini-grid is likely to be sustainable.”
Gabut stated that cost is a big issue for rural families, with most of the households being serviced by solar home systems or pico hydro for villages.
Some of the larger projects, like the huge generating project, are already having an influence on the newly formed NEA.
The Ramu 2 hydroelectric plant is resuming construction.
Before a license can be given, the national energy authority and other state organizations are working with PNG Power Limited to satisfy the prerequisite requirements.
Fortesque Minerals of Australia is pursuing the Purari liquid hydrogen project aggressively, while the Simbu province administration and landowners are collaborating with an Italian business to build the Karamui hydro plan.
The Finschhafen area has another project in the works, with PNG Hydro Development Limited JV working on a prospective 200 MW hydro project.
Reference:
Tom, Patrick. Post-Courier (17 August 2021). “K1.5B For Nationwide Electrification Rollout”.
Photo Credit: Shuttershock
According to William Duma, Minister of Public Enterprises and State Investment, Papua New Guinea is under-explored in terms of geothermal energy development.
Duma was speaking at the signing of a geothermal deed of agreement between the state and Fortescue Future Industries (FFI), an Australian company.
“Comparatively, Papua New Guinea is under-explored,” he said.
“If a geothermal location is to be determined to be viable for commercialisation, then, of course, Fortescue will apply for all the necessary licenses required for each province in accordance with the applicable legislation which the company is aware of.”
According to Duma, Fortescue Future Industries has discovered geothermal resources in numerous places around the country, with the potential to generate up to 10 gigawatts of power.
West New Britain, he said, had a caldera (Mt Talawe) in Talasea; Milne Bay, with areas of interest on Fergusson, Goodenough, and Normanby islands; Northern, with Mt Lamington; Madang, with resources on Karkar, Long, and Manam islands; East Sepik, with the islands of Bam, Blup Blup, and Kairiru; and Morobe, with parts of Bulolo and Wau, the McAdam National Park and the islands of Siassi and Umboi. Kumul Consolidated Holdings (KCHL) signed the agreement with FFI on behalf of the State.
According to KCHL managing director Isikeli Taureka, the deal with Fortescue was to look at areas of interest in the country.
Fortescue would next go out and perform more research to determine the capability of the geothermal sites that had been found, he added.
Following the confirmation of viable sites, Taureka said the developer and the state would sign a project agreement outlining what each party would undertake to develop the resource and the advantages to stakeholders.
He said that geothermal locations might be used to generate electricity, which would lead to more development such as roads and other infrastructure.
“Our side is to make sure that all the Government laws and permits are complied with.”
Reference: Mauludu, Shirley. The National (12 August 2021). “Focus on geothermal energy”.
The Government of Papua New Guinea has signed a landmark agreement with one of the world's biggest companies to venture into 'green energy' in a partnership that is likely to revolutionise power generation and supply in the near future.
In another bold move to "Take Back PNG", the Government today signed the 'Deed of Agreement' with Australian company Fortescue Metals Group (FMG), the world's fourth largest producer of iron ore.
The instrument was signed by the Minister for State Enterprises Hon. William Duma and Founder/Owner of FMG Dr. Andrew Forrest; and witnessed and co-signed by Prime Minister Hon. James Marape and Fortescue Future Industries CEO Julie Suttleworth.
Prime Minister Marape called the signing "historic" as it paves the way for FMG through its industry company Fortescue Future Industries (FFI) and PNGFFI to explore and later look into developing renewable energy sources that will cover hydro, solar, wind and geothermal power.
He said this was the "most appropriate and relevant way to go" as the world moves toward green energy and tries to cut down its carbon footprint.
PM Marape added his Pangu-led government was keen on generating clean energy utilizing the country's natural resources - solar, wind, gas and geothermal hot springs.
FMG Owner Dr. Forrest is the second richest man in Australia with a net worth of A$27.25billion, according to the Australian Financial Review.
PM Marape thanked Dr. Forrest for his "personal choice" to invest in PNG in this frontier sector, calling him "a friend of PNG closer to home".
Through a virtual video link, Dr. Forrest explained his personal affinity to PNG in that he had lost an uncle in PNG during World War II, one other reason he has chosen to invest in the country.
Already the investor is eyeing sites in Gulf and West New Britian provinces to investigate and study hydropower and geothermal potentials respectively as it continues to explore other sites in PNG, especially geothermal, hydro and solar.
PM Marape said Dr. Forrest had revealed during one of their earlier meetings that his company is able to produce over 25 gigawatts (250 billion watts) of power from PNG in renewable 'green hydrogen and green ammonia' energy - sufficient for both domestic use and export to overseas markets.
The partnership is frontier-breaking and adds great value to the work the Marape Government is doing nationally in managing the country's natural resources better, and in the region and globally in reducing the impact of climate change through more environmentally-conscious projects.
With the recent set up of the National Energy Authority, such projects would be better streamlined and properly operated through the Ministry of Energy, the Prime Minister said.
PM Marape then invited Dr. Forrest to join him to advocate on green energy at the United Nations conference on climate change, COP26, later in the year.
The signing now allows the company to begin work on acquiring relevant licences to progress work.
Minister Duma said a timeframe of no more than three years was being looked at before the first project could be operated.
Today's signing event was spearheaded by the Ministry of State Enterprises and its body, Kumul Consolidated Holdings. It was witnessed by government representatives from relevant departments and state bodies.
Following the passing of the National Energy Authority Act 2021, the Independent Consumer and Competition Commission (ICCC) said that it no longer had regulatory authority over the power business (NEA Act).
Commissioner and CEO Paulus Ain stated that this was done in line with National Gazettal Notice No: G443, which went into force on July 5.
He stated that the ICCC has regulated the power supply sector since 2002 until the NEA Act and Electricity Industry (Amendment) Act 2021 were passed.
“The electricity industry in PNG was declared under the Electricity Industry Act to be a regulated industry for purposes of the ICCC Act 2002 until the passing of the NEA Act,” he said.
“Accordingly, in 2002, the then Minister for Treasury, the late Sir Mekere Morauta, declared all power supply services to be regulated services under the ICCC Act.
“As a result of these declarations, the electricity tariffs, service standards and licensing arrangements have been subjected to the ICCC’s oversight.”
The ICCC, according to Ain, collaborated with all stakeholders, industry players, and development partners, including funders, to design and implement the required economic and technical regulatory frameworks, strategies, procedures, guidelines, and measures to enhance and ensure:
“Since 2002, the ICCC has supported the Government’s development agendas for the electricity industry by developing and implementing various electricity industry codes, rules and regulations that promote and protect efficiency and competition for electricity markets, improved service standards, and ensured regulatory compliance.”
The National Energy Authority was formed under the NEA Act (NEA).
According to Ain, the energy/electricity sector's institutional reforms meant that:
According to Ain, the NEA Act has a lot of anomalies, confusing clauses, overlapping duties, and inconsistencies that are likely to have a negative impact and throw the electrical business into disarray, further jeopardizing the government's aim of 70% power availability by 2030.
While the ICCC recognized the government's choice to create the NEA, he stated that the regulatory system described in the NEA Act needed to be corrected to ensure that the NEA's activities remained sound and appropriate.
The National (22 July 2021). “ICCC not regulating electricity”.
Former managing director Flagon Bekker's current plans, projects, and activities will be reviewed by PNG Power Limited.
Some of the major initiatives, programs, and works done and left behind by Bekker are good for PPL's development, according to PPL acting chief executive officer Obed Batia. However, a review exercise will be conducted to see if some of the initiatives, programs, and works done and left behind by Bekker are good for PPL's development.
He stated that he intends to do a thorough assessment to decide if PLL should continue with these initiatives, programs, and projects or adapt them to match current strategies.
For the time being, he added, his short-term strategy is to ensure that there is dependability and that the PPL continues to receive money.
“I want to make certain that our retail keeps on collecting what is owed to PPL in order for us to have enough funds to pay for services providers and re-investments into our assets,” he said.
According to Batia, dependability is critical, and he wants to ensure that PPL's operations staff is working 24 hours a day, seven days a week to ensure that electricity is available in both major cities and remote areas.
He went on to say that PPL has to re-think how they operate and carry out power supply in the country if they are to provide dependable and consistent power supply.
Kamus, Maxine. Post-Courier (16 July 2021). “PPL To Review Initiatives, Programs Set By Bekker”.
For the expansion of the Tari to Hides high voltage transmission line, PNG Power Limited has inked a K71 million deal with Chinese Tibean Electrical Company.
The 132 kV transmission line will be extended from Mt Hagen to Tari and from Tari to Hides, according to PPL acting chief executive officer Obed Batia.
He claimed that this will boost consumers while also providing power to the country's remote villages.
The government allowed the Tari to Hides link to be included in the scope of Phase 2 of the National Power Grid Development Project, according to State Enterprise Minister William Duma.
PPL will build this critical transmission line and substations, according to Tibean Electrical Group Limited.
“The scope of the extension includes 40km of a three-phased single circuit 132kV transmission line of 6.6 per 132kV step up sub-station at the Hides plant and 132kV extension bars and laundry gantry at Tari sub-station.”
He said that the project's scope and cost include land access, tower base payments, and compensation for upgrades, totalling K71 million including contingencies.
“The Tari to Hides link is critical to enable dispatch of the proposed Hela Power gas-fired plant into the grid and reliably distributed to customers optimising the use of the upgraded transmission infrastructure and making the project economically viable in the medium term.
TBEA will subsequently construct the critical missing link transmission infrastructure between Tari and Hides following the signing, according to Duma.
According to Prime Minister James Marape, this is a government-funded initiative to build a supernational grid system that will extend from the Highlands to the Mamose, as part of a national goal to ensure that 70% of homes have access to dependable and cheaper electricity by 2030.
Kamus, Maxine. Post-Courier (16 July 2021). “PPL Signs K71 Million Tari-Hides Power Deal”.
Image: Lihir geothermal model (Source: Newcrest Mining Limited [1]
A recent study by Mineral Resources Authority (MRA) explores the potential of geothermal energy as a possible source of sustainable energy for Papua New Guinea.
The Geological Survey Division, Mineral Resources Authority published “Geothermal Energy Resources of Papua New Guinea: Country Update” -- a study done by Maxine M. Lahan, Gener Villafuerte and Lynell Stevens. This study points out the geothermal energy is a good prospect as a potential source of energy in PNG. According to the researchers, “This paper aims to provide an overview of the preliminary geothermal studies initiated and conducted by the Mineral Resources Authority’s Geological Survey Division since 2009 including recent government policy initiatives.” [1]
Like any energy project, each country has its set of hurdles and challenges. For geothermal energy in Papua New Guinea, the study mentioned that the development of geothermal energy here is somehow hindered by lack of policy and further exploratory work. The study aims to identify the pervading problems and the possible solutions for the successful development of geothermal energy utilisation.
Alexander Richter from the Think Geoenergy website wrote on his article, ““Lack of policy and additional exploratory work required hampers potential geothermal investments in Papua New Guinea.” [2]
He notes that this study released by the Mineral Resources Authority last 23 February 2021 “aims to bring the topic of geothermal energy back on the table in the country.” [2]
The idea of developing geothermal energy is not a new concept. There was early historical research on potential geothermal resources that were done in the 1960s until the 1970s, and some recent ones by MRA in 2009 until 2016.
The study reported that currently, there are 55 known, identified and recorded geothermal sites. However, only seven regions have been mapped and sampled. Where are they located? “The prospects identified are Talasea along the Willaumez Peninsula on New Britain Island, Kasiloli prospect at the active volcano of Pago on New Britain Island, the Silanga propsect also at the Pago Volcano on New Britain Island. Other prospects are Deidei on Fergusson Island, part of the D’Entrecasteaux Islands in Milne Bay Province, Rabaul at the active Tavurvur volcano and some other smaller prospects.” [2]
As mentioned earlier, the study mentioned that geothermal energy has great potential in providing alternative energy source for the country. Lihir Island has an operating geothermal power plant with notable high-temperature and permeability options. [2]
Creating the power plant was done in three stages / phases that started with a 6 MW backpressure plant in 2001. This was proceeded by a 30 MW expansion with a single flash plant in 2005. Finally in 2007, it had an additional 20 MW-Single Flash plant.
There are, however, only 9 MW of the 30 MW that is operating. And only 2 MW of the 20 MW plant are operating as well. This report was given by the Papua New Guinea country update for the World Geothermal Congress 2020+1 in Reykjavik, Iceland last April 2021.
Moreover, Richter noted in his article that there was increased interest in the geothermal energy in 2016, but “things have been pretty much idle since then.”
He wrote, “In 2016 and again in 2020, the lack of policy for geothermal development was described as a key hurdle for the utilization of geothermal in PNG. While a new regulatory and supervision scheme seems to be set up for renewable energy development in PNG, there are not concrete plans for a boost for geothermal energy development. To develop the geothermal resources of PNG, “more exploratory work is required to collect additional information on the prospects already identified by MRA and others.”
Now, let us look deeper into the study. The initial discussion first introduced the geological features of Papua New Guinea.
“Papua New Guinea is characterized by quaternary volcanic islands with potentially low to high-temperature geothermal resources that are yet to be systematically investigated for development and utilization,” according the study.
A 50MW geothermal power plant on Lihir Island was installed. This is owned and operated by Newcrest Mining Limited within its gold mining lease.
It was observed that the research and development of geothermal energy and other renewable energy sources has been hindered by lack of political will and support for the development of policies and legal frameworks and finance that will accelerate the development of geothermal power plants. This goes the same for the development of other renewable energy resources. [1]
The study enumerates that PNG has abundant untapped renewable energy resources like hydro, geothermal, biomass, solar, wind, and tidal wave. However, due to the country’s cultural diversity, land tenure system, rugged terrain and largely rural popular, developing these sources of renewable energy is difficult and challenging.
At the moment, hydro is the primary source of energy and provides just half of 797MW total electricity generation capacity. One-third of energy comes from diesel generators. Other energy sources like gas, geothermal and biogas generation “represent most of the balance with the bulk of this energy used for mining.” [1]
Here are more key points from the study:
More on the geological background of PNG, it has a unique geology with rich amounts of mineral resources and geothermal potential. The study notes that this is because PNG is located on the “Pacific Ring of Fire”. PNG is located on an active tectonic region or a collision zone between the ff. plates:
Lihir Mine and the geothermal steam field. The power plant is located at the bottom left corner of the photograph where the built up infrastructure area. [1]
“The geothermal resource policy is yet to be passed in Parliament; however, the government has recently approved the National Energy Policy (2017-2027) which lays out the plan for the establishment of the new National Energy Authority and Energy Regulatory Commission which will be mandated to administer and regulate the energy industry. This policy provides for the development of various policies for geothermal and other renewable energy sources to develop sustainable renewable energy.” [1]
Looking at the future development and installation, what can we expect in the future? The study reveals that currently there is no plan for new geothermal power plant installations in the next 5 to 10 years. The study suggests that more exploratory work is required at this stage to collect more information on the prospects identified by MRA and others. [1]
However, there is still hope in the future, perhaps with the help of the National Energy Policy 2017-2027. “The recent policy initiative through the National Energy Policy 2017 – 2027 is a positive step towards the development of geothermal and other renewables as the new proposed National Energy Authority develops the policy and regulatory frameworks that would encourage geothermal exploration in the country and hopefully development.” [1]
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Reference
[1] Lahan, Maxine M., Villafuerte, Gener, Stevens, Lynell. (April - Oct. 2021). Proceedings World Geothermal Congress 2020. "Geothermal Energy Resources of Papua New Guinea: Country Update". Retrieved from - https://pangea.stanford.edu/ERE/db/WGC/papers/WGC/2020/01028.pdf
[2] Richter, Alexander (24 Feb. 2021). Think Geoenergy Website. "Bringing geothermal back into the energy discussion in Papua New Guinea". Retrieved from - https://www.thinkgeoenergy.com/bringing-geothermal-back-into-the-energy-discussion-in-papua-new-guinea/
Photo credits/charts:
Courtesy of Lahan, Maxine M., Villafuerte, Gener, Stevens, Lynell. (April - Oct. 2021). Proceedings World Geothermal Congress 2020. "Geothermal Energy Resources of Papua New Guinea: Country Update". Retrieved from - https://pangea.stanford.edu/ERE/db/WGC/papers/WGC/2020/01028.pdf
Image: By Kate Uvia
PNG Power Ltd needs reforms, according to Kumul Consolidated Holdings (KCH) chairman David Kavanamur, but they must be inclusive.
“We are aware of the challenges the energy sector is facing over the last 20 years.
“We must see a transformation within the current organisation that creates value and promotes recapitalisation,” he added.
“The provision of reliable, competent energy will have positive repercussions on economic and social development, benefiting the welfare of our citizens.”
He stated that the government will continue to assist PNG Power in achieving its goals of providing cheap, accessible, and dependable electricity to PNG's population.
“We support PNG Power’s focus to make energy more reliable, available and sustainable, in line with the Government’s ‘Connect PNG’ policy.
“PNG Power has been vital in encouraging partial privatisation in the power generation space through the support of Independent Power Providers (IPPs).
“We must ensure that these arrangements remain commercially viable to the mutual benefit of all parties.
“We will all benefit from a stronger power sector in the country. PNG Power has to continue working with its PNG Electrification Partnership members, to bed down a 15-year energy sector plan with the newly established National Energy Authority (NEA), as a matter of urgency,” he added.
KCH's five-year strategy, according to Kavanamur, would cooperate with all state-owned companies to achieve government objectives and consumer expectations.
The National (30 June 2021). “PNG Power needs inclusive reforms, says Kavanamur”.
Photo Credit: Loop PNG
Due to the ongoing power outages in the nation's capital, National Capital District Governor Powes Parkop has proposed offloading some assets to private sector organizations in order to provide continuous, dependable, and cheap electricity.
He claimed he met with William Duma, the Minister for State-Owned Enterprises, to discuss the unloading of some PPL assets in Port Moresby and Central Province.
Parkop said he will next meet with PNG Power Limited's management and board to examine the idea.
PNG Power's chief executive officer, Flagon Bekker, confessed the company was losing money before quitting.
PPL was losing K25 million in electricity per month owing to illicit connections, according to Parkop, whereas it required K50 million for operations and to cover obligations.
He said that this implies PPL has the financial ability to repair its old infrastructure, with banks and financial institutions refusing to provide loans to PNG Power Ltd to recapitalize and replace its dilapidated infrastructure due to the problems.
Despite management and government efforts, according to Parkop, the problem is far from being solved.
“In the city now, corporate entities are being forced to buy backup generators and become electricians or engage electricians on a full-time basis,” he said.
“This not only cuts into their finances but also diverts them away from their core business.
“Residents have not only suffered from unreliable electricity and continuous outage but also bear the brunt of costs passed on by business houses for having provided their own electricity.
“Ordinary residents are being hit two or three times a week as a result of this situation.”
Past governments and ministers, according to Parkop, have done their utmost to assist PNG Power in transforming itself so that it can offer better service, but all of their efforts appear to have been in vain.
“It is about time we accept what is obvious and deal with the problem so we can have solutions,” he said.
“In my view, the problem is PNG Power Ltd itself.
“The way it is structured, managed and capitalised simply cannot enable PNG Power Ltd to be a solution.
“The sooner we, especially you Minister (Duma), recognise and deal with this fact, the better it will be.
“Even if it’s an infrastructure problem, PNG Power Limited is not made out to solve this problem.
“PNG Power itself is the problem.”
He believed that valuing PPL assets in the city and Central for offloading to a corporate firm is the best approach to deal with the problem.
Elapa, Jeffrey. Post-Courier (29 June 2021). “Parkop Bids To Offload Power Assets To Private Firm”.
PNG Power Limited’s Managing Director has been replaced with an Officer in Charge as the power utility continues to face operational challenges.
This included a prolonged 16 hours of power outage last week Friday in Port Moresby that saw many business houses resort to generators to keep doors open to customers and deliver services.
Earlier that day, it is understood an impending strike by the PPL Union was addressed by the management, led by the now resigned MD.
A townhall meeting on Friday at the Airways Hotel in Port Moresby saw the PPL team and the former MD Mr Flagon Bekker address various stakeholders and media about the challenges that they were facing and what they were doing to turn the power company around.
It was during question time, that Mr Bekker left after being notified by a staff that he was needed back at the PPL head office at Hohola.
In a statement released Sunday, Chairman of PNG Power Limited (PPL) Mr Moses Maladina announced the resignation of the Managing Director, Mr Flagon Bekker, effective immediately on Friday.
“Mr Bekker’s decision to leave the organisation after nine months are based on personal reasons,” Mr Maladina said.
The Chairman also announced the appointment of Mr Obed Batia as Officer in Charge of PNG Power, whilst a more formal engagement is finalised.
Mr Batia has over 30 years of service with the company and has served the Leadership Team with distinction and possesses outstanding credentials. I have every faith in Mr. Batia’s ability to provide much needed stability.
The statement assured that the Chairman and Board of PNG Power will provide the new Officer in Charge and the Leadership Team with its full support, during the interim.
“We assure all the PNG Power employees and their families, key stakeholders and suppliers, and the valued PPL customers of continued stability during this transition period,” Maladina said.
“It remains our key priority, to focus on the objectives of our Annual Operating Plan and to deliver on a promise to provide accessible, affordable and reliable energy services to the people of Papua New Guinea.
“I would like to take this opportunity to thank Mr Bekker for his time here at PPL and to wish him well, as he returns to his family in Australia,” the chairman said.
Among the issues that need the attention of the new OIC is the cancellation of the Power Purchase Agreement (PPA) signed with Oil Search Limited last year for the Biomass and Solar Farm project located in Markham district of Morobe province.
Local landowners have expressed disappointment following the release of a statement by OSL of the negative implications of the recent cancellations of the PPA with OSL for the solar farm and biomass project that was to be an additional source of power supply into the PPL Ramu grid.
The company’s challenges include a K25 million monthly loss to power theft and millions owed in outstanding fees, particularly from Government.
PNG Power Limited will be subjected to an evaluation by its asset management standard unit in order to receive ISO 55001 certification.
A third party will undertake the assessment and ISO 55001 certification process, which will take 12 to 18 months and include an evaluation of the company's present AM practices and processes, identification of gaps, and development of a roadmap for adoption.
This will be the first phase in PNG Power's ISO 55001 accreditation process, which will be supported by USAID's PNG Electrification Partnership (USAID-PEP).
The company's old and old infrastructure assets, according to PPL managing director Flagon Bekker, have continued to obstruct the delivery of dependable power to clients across the country.
PNG Power has taken the first step forward in commencing the Asset Management Strategy and Framework for Management of PNG Power Infrastructure Assets, he added, under its new asset management (AM) unit.
He explained that ISO 55001 accreditation is vital because it ensures that PNG Power has an asset management system (AMS) in place that caters for internal and external challenges influencing asset management in order to meet the company's goals.
Risk management, ageing/aged infrastructure, supply chain and spares maintenance, maintenance optimisation, AM performance monitoring, and project/investment lifecycle assessment and planning are the six workstreams that the AM unit will focus on.
PNG Power's asset management will be based on these workstreams.
On the leadership front, it will be ensured that senior management has accepted responsibility for developing and communicating the AM Policy and Strategic Asset Management Plans to all stakeholders involved.
The accreditation will also provide confidence that AM objectives have been defined, recorded, and disseminated within the organization, as well as that adequate planning has been put in place to meet the goals.
PNG Power is also sponsored by the World Bank under its Energy Utility Performance and Reliability Improvement Project (EUPRIP) to strengthen infrastructure through rehabilitation and upgrade works, therefore the support from PEP is expected to complement the asset management strategy.
PNG Power is also working with USAID PEP Activity to improve grid home connections, and the AM effort will guarantee that quality and dependable power reaches end customers.
PNG Power Ltd's decision to cancel a power purchase agreement (PPA) with PNG Biomass, which was signed six years ago, is immoral, according to Aitape-Lumi MP Patrick Pruaitch. He said that the biomass project was well-conceived and performed, and it would have benefited communities and landowners.
He claimed that PNG Power and the government delayed final project clearances. He said that terminating the PPA was immoral since it had allowed PNG Biomass to complete feasibility studies and begin planning and execution, including a sustainable tree farming initiative with local landowners, at a significant expense. Landowners utilized their first land rental payments from PNG Biomass three years ago to purchase a three-tonne truck, providing an economic stream for the local community, as a result of these commitments. Local farmers have been able to develop a thriving honey business employing native stingless bees, with additional large profits from "intercropping," thanks to technical aid from PNG Biomass.
According to Pruaitch, the Independent Consumer and Competition Commission authorized a US54c (K1.89) per kilowatt-hour reference pricing for the Ramu grid in August 2016 based on the PPA signed by PNG Power with PNG Biomass.
The National (3 June 2021). “MP says PPL’s decision to end deal was ‘unethical’”
Even though Papua New Guinea produces oil and gas, making inexpensive energy available remains a difficulty, according to Minister for Petroleum Kerenga Kua.
He believes that this is why the Energy Department must adopt a holistic strategy to lowering energy costs by introducing new energy sources such as hydropower, geothermal energy, and wind turbines.
“We have a lot of natural resources available with cheap labour and energy that can create a platform for industries to drive energy costs down for industries and consumers.
“Creating more employment, tax base and revenue will benefit the country with abundant natural resources with a lot of cheap labour,” Kua said.
He stated that the sector is undergoing a lot of changes, including production-sharing arrangements.
He explained that the purpose of the production sharing agreement was to ensure that the state derived the most value from mineral, oil, gas, and gold production through legislative reforms in the country.
“All of this will happen through the implementation of the national energy policy 2017-2027.”
One of the policy's main thrusts, according to Kua, is the domestic market obligation. Once the state receives all domestic market obligations, all petroleum will be able to be allocated to power and petroleum chemical producers, ensuring cheap electricity and petroleum chemical products, including fertilisers.
Post-Courier (31 May 2021). “Make Available Cheap Energy, Says Minister”.
PNG Power Managing Director Flagon Bekker said the company's assets have a lot of potential for generating income and maximizing their use to help the country distribute energy more efficiently.
PNG Power has the capability and assets to provide that opportunity and needs to look at the best solutions to accomplish this sort of outcome, he said. Electricity markets have altered worldwide and in the region to produce better benefit for the economies of those nations, he said.
“Reform is inevitable for the power sector in PNG as it has been and continues to be across the globe. PNG is not unique,” Bekker said.
“Reform will consist of a measured, step by step approach by PPL and the other market participants.
It will mean lower power prices for the people of PNG through transparent, competitive investment and operating processes in generation, transmission and distribution and retail business units. Reform is about change.
Change for a better stronger and more sustainable sector.”
He highlighted that, after the recent passage of enabling legislation, the National Energy Authority (NEA) will take over regulatory tasks from PNG Power and the ICCC.
He stressed that PNG Power could not be both a regulator and a participant in the business at the same time, that it could not be both the referee and the player, as well as the third umpire.
“It must now behave in a more commercial manner to implement the programs necessary to achieve the government’s electrification agenda.
PNG Power would become a competitive participant in the market in the future, with a single buyer responsible for power demand throughout the country's electrical infrastructures.
“I want all PNG Power staff to understand the vision that we have for the organisation and its important role in achieving the goals of the government; this requires that we must act in a commercial manner, especially in dealing with donors and investment parties.
“We should not be afraid of change; we must all embrace it,” Mr Bekker said when responding to the media criticism by the Energy Workers Union about the changes and the reforms initiated at PNG Power.”
Post-Courier (31 May 2021). “Bekker: PNG Power Is Able To Make Money.”
Oil Search confirms that the Company received a letter from PNG Power Limited (PPL) that could significantly impact the PNG Biomass Power Purchase Agreement (PPA) which was signed between both companies in December 2015. The Company has analysed the implications of the letter’s unforeseen ‘notice of termination’ and is currently engaging with all key stakeholders including Markham landowners and development partners to assess the potential impact of a cancelled PPA.
The PNG Biomass project is aligned with the PNG Government’s ambition to diversify the country’s energy mix and complement the drive to create jobs and long-term opportunities for the people of PNG. The project will provide more than 500 direct jobs and stimulate many more across industries in the region. It also has the potential to make PNG a leader in renewable energy and enhance the country’s reputation globally.
“For the power sector and the people of our country, it is important that we find a way forward to bring the project’s lowcost reliable energy onto the Ramu Grid. We intend to work with PPL to find a resolution to move forward together. We are ready to build the power plant and solar farm. We have met all obligations in the PPA under our control in order to reach Financial Close and we have strong funding support from international agencies who recognise the social benefits of this project. We have a dedicated team ready to work with PPL to support them to meet their obligations. We are ready to be part of the power solution and the energy mix and help the country transition to 100% renewable by 2050,” said Leon Buskens, Oil Search Country Manager.
PNG Biomass has enormous energy benefits for PNG. It will provide the Ramu grid with up to 40MW of renewable, clean, affordable and reliable energy, from biomass power generation and a solar farm. The project will help stabilise the Ramu Grid and reduce blackouts in Lae. In 2018, Oil Search lowered the project’s power price significantly at the request of PPL. Ever since, the Company has continued to work closely with all stakeholders, including lenders, grant funders and contractors, to ensure an extremely competitive levelised cost of power that will result in material savings to PPL. In the process, Oil Search has attracted grants from the international community to the benefit of PPL worth over USD40 million (K140 million).
“This is a compelling project for reliable power generation and creates large financial savings for PPL. Our PNG Biomass project is an excellent example of sustainable development, attracting widespread interest and admiration from the international community. PNG Biomass is truly a world-class sustainable tree farming and energy operation. This is an outstanding opportunity for PNG to showcase what it can do on the global stage,” adds Mr Buskens.
The local inclusive economic growth that can be generated with PNG Biomass is substantial. PNG Biomass has already invested K18 million into the communities in the Markham Valley in the form of land rentals, employment, labour, contracts, sponsorships and much more. Mutual trust and confidence with the landowners have been built over more than a decade. The outcome of this partnership is a leading-edge precision tree farming operation and a world class nursery employing state of the art monitoring, measurement and testing. A comprehensive baselined environmental management plan has been developed across all aspects including air and water quality, soils data as well as individual tree growth, leaf analysis and GPS area mapping. The automated seedling production system produces a consistent supply of high-quality fibre cell seedlings and is one of only a handful of such systems worldwide. Specialised planting techniques are employed for deeper soil cultivation, resulting in minimal soil erosion and disturbance.
“Hundreds of local communities, including many women and youth, are provided opportunities through our PNG Biomass project. Out of the 500 direct jobs we are creating, there are already 300 landowners and locals working. They are planting over 20 million trees on 16,000 hectares of low production grass land,” said Mr Buskens.
Oil Search confirms that the Company is committed to work with the PNG Government to provide sustainable opportunities that directly align with the government’s national development priorities in electrification, energy mix diversification, renewable energy, climate action under the Paris Agreement, reforestation, and sustainable inclusive economic growth. “We have designed this project to be part of powering PNG and empowering our rural communities. We remain optimistic and shovel-ready to deliver,” concludes Mr Buskens.
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