PNG Power Limited (PPL) will not enter into any Power Purchase Agreement (PPA) with new Independent Power Producers (IPPs) while insolvent, says the Minister responsible for PPL, Hon. Richard Maru.
“Apart from the Wawin Solar Project in Morobe Province which fully I support, PPL cannot commit to any new PPAs. It does not make commercial sense when PPL is insolvent.
New PPAs will only expose both PPL and State to further financial obligations. Entering into a PPA with the 25megawatt Wawin Solar Project makes sense because it will replace the very expensive power supply from Mumum Power which PPL buys for K2.76/kWh and sells for K0.76 – K1.00/kWh to its retailers,” he said.
Minister Maru relayed the same message to Shenzhen Energy during his meeting this morning with the Managing Director of their Regional Office. He said he would not support the proposed Ramu 2 Project under an IPP. With plans for PPL to be partially privatized, he invited the company to consider taking up shares in PPL and fund new hydro projects as a new shareholder of the partially privatized PPL.
Minister Maru also stated that Burum Hydro in Finschhafen should not be developed as an IPP.
“If PPL enters into a PPA with Burum Hydro which will be
completed in three years’ time, there will be a need for the Government to find K700 million to build the transmission lines to Lae. As far as I am concerned, Burum Hydro should be built in stages with the power used to supply the proposed Finschhafen Special Economic Zone. It should not be developed as an IPP. The developer must own, generate, provide transmission and manage the retail of its own power in Finschhafen under an independent grid license from the National Energy Authority,” he said.
Minister Maru added that PPL was already doing a feasibility study to build a new 90megawatts hydro in Nawaeb District to supply power and water for Lae.
“I have advised PPL to conclude the feasibility studies as a matter of priority so the Government can make a decision on this before the national elections,” he said.
In the meantime, the Minister said he was looking forward to the formal announcement of the Wawin Solar Power IPP as soon as possible so construction work on the Wawin Solar Project could commence. This project will include batteries to provide standby during rain and cloudy periods.