Cost to rent power ship “almost same” as if GPL were to generate power – VP Jagdeo

Vice President Bharrat Jagdeo has defended the Government’s move to rent a second power ship to supply electricity to the national grid, arguing that the cost to buy the electricity would be almost the same as if the Guyana Power and Light (GPL) Inc were to generate the power itself.
On Wednesday, the State-owned GPL signed a contract with the Joint Venture of Turkish-based Karpowership Global DMCC and Qatar-based UCC Energy International LLC JV, to charter a second power ship with a total installed capacity of 75 megawatts (MW) for two years.
In the first phase, the power ship will dispatch 60MW to the grid in approximately six weeks followed by an additional 15MW, once works are completed on an additional transmission line.

The contract requires GPL to pay the Joint Venture 8.52 US cents per kilowatt hour (kWh) as a monthly charter fee for the new power ship and a monthly operation and maintenance fee of 0.98 US cents per kWh, based on electricity generated. Under the contract, GPL is also responsible for providing Heavy Fuel Oil (HFO) for the operation of the ship’s generators.
This second power ship will be located in the Demerara River and will be interconnected with GPL’s grid at 69 kilovolts (kV). According to GPL, it has already commenced preparatory work to accommodate the floating power plant and the interconnection to the national grid.
However, the procurement of a second power ship has been criticised by Opposition parliamentarian and Alliance For Change (AFC) Chairman, David Patterson, who believes that the billions being spent on the rental of the vessel could be redirected into upgrading GPL’s aged system.
Patterson, who was the Public Infrastructure Minister in the previous A Partnership for National Unity (APNU)/AFC coalition Administration, accused the People’s Progressive Party/Civic (PPP?C) Government of having zero plans for the power sector, claiming that Guyana would be paying $126 million per day and $46 billion per year for the rental of these two power ships.
But Jagdeo on Thursday rubbished Patterson’s arguments as “pure nonsense”, stating that the Opposition Member of Parliament (MP) failed to take into account the cost of generation if GPL were to supply the 75MW that is being procured from the power ship. In fact, he noted that the cost of the power ships was not only the rental fee but includes the costs of capacity, operation and management (O&M) and fuel.
“So, it’s nearly almost the same that we would’ve spent to generate one kWh than what we’re buying it for,” the Vice President posited.
The first power ship is generating electricity at 20.5 US cents per kWh while the second power ship would do so at an estimated 22.5 US cents per kWh.
“So, that’s the difference… This [second power ship’s] price is slightly higher… but that’s not just for the rental of the ship… To generate the same amount of power, GPL would’ve had an amount of cost. [Patterson] ignores that cost totally so it sounds like a lot of money we’re paying just for rental. We’re renting capacity and they’re doing the O&M, and it’s for two years. So, it’s bridging power until the Gas-to-Energy Project comes on stream,” Jagdeo contended.

Currently, GPL is selling power at approximately 22-23 US cents per kWh. However, the cost for generation and transmission is nearly 30 US cents per kWh and that difference is being subsidised by the Guyana Government.
“People should know that US$70 million in subsidy is keeping their power bill at the same rate as in 2020 although we’ve seen an escalation in fuel costs. And secondly, you can’t calculate the rental of a ship as though you don’t have a counterpart cost if you generate the same power.”
“It’s pure nonsense about billions being spent on rental so people will say ‘Oh, this government is wasting a lot of money.’ But we’re trying to get more power into the system because the demand is growing because of the development [happening] here and because you did nothing [while in office to upgrade the existing power system],” VP Jagdeo posited.
Government has stated that this 75MW power ship will be deployed to Guyana in another month to assist in supplying the continuously increasing demand for reliable power in the country. Electricity demand during peak hours is currently 205MW.
This power ship will be the second one that the Government, through GPL, has chartered to assist in offsetting generation shortfalls of the national grid. Through an agreement with the JV partners, the first floating power ship arrived in Guyana in May of this year and is currently stationed at Everton in the Berbice River. It is supplying 36MW of electricity to the Demerara Berbice Interconnected System (DBIS).
As part of that agreement, GPL had paid a US$1 million mobilisation fee, a fee of 6.62 US cents per kWh as a monthly charter fee for the vessel, and a monthly O&M fee of 0.98 US cents per kWh based on electricity generated. Additionally, GPL is required to provide HFO for the operation of the generators onboard the vessel. (G8)