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Lae Chamber of Commerce takes a stance against the installation of a Heavy Fuel Oil Power Plant at Munum by Daewoo for PNG Power Limited

The Lae Chamber of Commerce Incorporated (LCCI) makes this submission in response to the Notice that appeared in the Newspapers on 8th September 2014.

The Lae Chamber of Commerce represents a large proportion of business houses in the City of Lae, especially the large Manufacturing Companies. Therefore we are a major stakeholder in seeking the provision of adequate quality electricity power to Lae City.

As such we have seen the provision of adequate electricity power to Lae decline especially over the last 10 years, as the generators at the Ramu One Power station have a reduced power output due to their age and the lack of past maintenance. Added to this there has been a reduction of the power output from the standby thermal generators at the Lae Power stations of Milfordhaven and Taraka.

As Lae is a thriving City it has grown exponentially in the same period, with corresponding growth in the use of Power. The result is that there is an insufficient provision of electricity to the Lae City to meet all the needs on a regular basis.

This situation has resulted in the LCCI historically being very supportive of the steps that PNG Power Limited has introduced to meet the electricity needs of the City especially in the past 5 years.

We are of the opinion that the installation of further diesel generators, such as those at the Taraka Power Station, and the setting up of the Gas Turbine at the PNG Ports site, are only stop gap measures to meet the immediate electricity needs in the City of Lae. They are however very expensive means of producing electricity. We are strong believers in the theory that long term plans should look at the most efficient and cost saving means of generating power, such as further Hydro schemes, Biomass plants and generators utilizing the abundant supply of LP gas.

Whilst the move to establish the new heavy fuel oil 30 MW power plant at Munum, does meet the need for cheaper power generation, it is impractical given the fact that the PNG Government is committed to reduce the use of HFO.

The recent ruling of the Supreme Court requires relevant Government Authorities to develop a phase out reduction program to have HFO comply with the MARPOL Convention. This convention provides for a reduction of sulphur content in HFO to .35% by 2020.

Therefore whilst HFO with maximum sulphur content of 3.5% continues to be appropriate for import and use in PNG, there is the expectation that authorities will move to have sulphur content reduced to .35% by 2020.

This makes the installation of a HFO power plant at MUNUM out of the question, given the single fact that HFO will be phased out, thus rendering this power plant redundant and of no use after six years.

I trust that this submission will be considered when considering the application before you by Daewoo Power (PNG) Limited.

Kind Regards,

Alan McLay OL