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Two milestones on the way to improved electricity in PNG

Two new milestones on the way to boosting electricity access to 70 per cent of Papua New Guineans households are due this month.

Business Advantage PNG speaks with Roberto Aiello, Senior Energy Specialist with the World Bank, which is supporting the PNG government with its energy development plans.

Under the PNG government’s Vision 2050 Development Strategic Plan, the government wants to increase electricity access from the current 13% to 70% of households by 2030.

According to the Asian Development Bank, PNG currently has power generation capacity of around 580MW, but will need an estimated 2000MW of installed capacity by 2030 to keep pace with government targets.

‘This is very challenging, very ambitious,’ Aiello told Business Advantage PNG, ‘but a lot can be done over the next decade, if we get the foundations right. If we get the plan properly done, costed, agreed upon by all stakeholders, then the roll out of that plan is going to be a lot easier. ‘I think it is possible.’

He said two positive milestones due this month will help.

Geospatial study
The first is the launch of a geospatial study, he says, which will look at where electricity demand will be across the country, analysing the best available technologies for the individual locations and prepare the roll out, as well as put that analysis into an investment prospectus, which will provide the costing to build those power stations, as well as grid, off-grid and pre-electrification projects.

‘The government is currently finalising a contract with a firm which will carry out the study to start very soon.’

He said the data will take four to five months to collate and that data will form the basis of PNG’s investment plan for power generation.

Naoro Brown hydro ‘good’
The second piece of good news, he says, is that the feasibility study for the 80MW Naoro Brown hydropower project to supply the Port Moresby grid, will be completed this month.

‘The original feasibility study for the hydro dam was suspended after leakage was spotted at the site in 2011. So, the IPBC [Independent Public Business Corporation] hired a company to undertake additional drilling and grout trials to verify the geotechnical solutions for performance of the dam.

‘We (the World Bank) financed a firm to manage the works and finalise the feasibility study, and the good news is that this dam site is good.

‘PNG Power will soon be in a position to advertise for a developer to build the Naoro Brown hydro-power project.’

Resource map for wind power
Aiello expects PNG to use a variety of energy sources to boost electricity access, including gas, hydro, geothermal, wind, and solar, as well as existing sources such as diesel, depending on the location, technical viability, economics, and engagement with the local people.

‘With wind, we are doing a resource map to look at the hotspots and we are talking to landowners to put some wind measuring masts at eight-to-nine sites.

‘So, in two years’ time, PNG will have ground measurements of wind speed, and parameters at commercial standards.

‘That means that any commercial enterprise wanting to install a wind farm will not need to repeat this study at industry standard. This information will be publicly available to them.’

Privatisation of PNG Power
So, how important is a partial-privatisation of PNG Power to achieving the 70% target?‘I would put the answer this way.

I think if you want to lift power output to 70% then you will need a very strong utility, or a number of suppliers (grid and off-grid).

You need strong providers of the service, regardless of ownership,’ says Aiello.

‘But a publicly-owned enterprise can benefit from the skills of the private sector in operating some technologies. For example, the country’s first wind farm.

You need to have some capacity in knowing how to run a wind farm to its maximum capacity so it might be better to do it hand-in-hand with a private sector company in the form of a PPP [public-private partnership].

‘The other aspect is financing. Does PNG Power have enough finance to build its own plants in all cases?

If not, the option would be to have someone else do it, and you buy the electrons from what we call independent power producers.’Clean technologies

While the World Bank favours renewable energies, Aiello acknowledges that coal may have a place in range of energy sources in some specific cases.

‘PNG has very good other sources and I would encourage PNG to look at other cleaner and more sustainable sources. But that is a sovereign decision.

‘We support clean technologies. When it comes to financing, if it’s properly justified and if there is no other available option—which isn’t the case in PNG—then we could consider financing coal.’

Roberto Aiello will be presenting on Papua New Guinea’s National Electrification Roll out Plan at the 2015 Papua New Guinea Advantage Investment Summit, to be held in Brisbane on 27 and 28 August.

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