GPL seeking 50 MW plant

-wants to use natural gas from Exxon well

GPL is looking for a 50megawatt (MW) power plant that aims at tapping the country’s natural gas future and ensuring sufficient generation in the coming decade.

In a full-page advertisement in yesterday’s Sunday Stabroek, the Guyana Power and Light (GPL) is 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.

It 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 says that EEPGL estimates that between 30 to 50 million cubic feet per day of natural gas can be made available for electricity generation in Guyana. 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 reinjecting the gas back into the well had also been floated.

GPL’s ad also pointed to the likely growth in future power demand as a reason for seeking the 50 MW plant. GPL said it is forecasting that Guyana’s electricity demand will more than double in the coming decade and existing plants will be decommissioned in the medium term. It said that the plant is targeted to be in operation by 2020.

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 huge greenhouse gas emitting plant. HFO use will lead to greenhouse gas emissions and a lower amount will come from natural gas. 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.

BOO

Yesterday’s GPL ad says that the plant should be built under a 25-year Build, Own and Operate (BOO) arrangement. It will also entail the construction of an associated substation, fuel storage facility and related facilities for complete operation including for transmission of electricity to the National Grid.

In order to pre-qualify, interested bidders must, among other things, have a strong balance sheet with a minimum capital of US$25m, provide audited financial statements for the last three years, demonstrate their ability to raise funds to undertake a project with a capital cost of US$100m at competitive terms with a debt to equity ratio of 75%:25% and commit to construct and commission the power plant within 12 months after a contract award.

It must also outline its experience in this field and the qualifications of key team members to be deployed. In the case where a bidder is a consortium, the bidder has to provide a list of the members and the estimated percentage of funding to be granted by each and the proposed ownership structure.

The advertisement says that interested parties may request clarifications on the EoI up to five days before the October 17, 2017 closing date to the Project Management Manager.

The opening of bids is set for 2.30 pm on October 17, 2017 in GPL’s boardroom. The advertisement says that upon receipt of the bids, GPL at its discretion may communicate with any or all applicants for clarifications.