HGP Nightly News – The government has extended the contract for the 36-megawatt powership stationed in the Berbice River by another two years, with the combined generation charge increasing from approximately 7.62 US cents to 9.5 US cents per kilowatt-hour.
Meanwhile, the separate agreement governing the 75-megawatt powership in the Demerara River is expected to expire later this year. Any decision to retain that vessel will depend on whether the delayed Gas-to-Energy Project begins supplying sufficient replacement capacity.
Public Utilities and Aviation Minister Deodat Indar disclosed the arrangements during a press conference last Friday while responding to questions about the government’s rented generating capacity and its cost.
Guyana Power and Light signed the original two-year contract for the 36-megawatt vessel in April 2024 with Urbacon Concessions Investments, a subsidiary of UCC Holdings. UCC Holdings has a strategic alliance with Karpowership International.
The vessel arrived the following month and was connected to the Demerara-Berbice Interconnected System at Everton, East Berbice. It was acquired as emergency generation amid rising electricity demand and persistent shortfalls.
Under the initial contract, GPL paid a charter charge of 6.62 US cents and an operations-and-maintenance charge of 0.98 US cents per kilowatt-hour. Indar described the negotiated combined rate as 7.62 US cents.
The renewed agreement carries a combined capacity and maintenance charge of 9.5 US cents per kilowatt-hour; an increase of approximately 25 per cent over the rate cited by the minister for the original contract.
Indar said the government retained the vessel because its location helps to support voltage levels in the eastern section of the electricity network.
“There’s a reason why we put the 36 megawatts in Berbice,” he explained. “We put it there so that you can bring up the voltage level on that side.”
GPL subsequently signed another two-year agreement in November 2024 with Karpowership Global DMCC and UCC Energy International LLC for a second vessel.
That powership has an installed capacity of 75 megawatts and is stationed in the Demerara River near Ruimveldt. It initially supplied 60 megawatts to the national grid.
According to Indar, GPL is already receiving another 10 megawatts from the vessel, with the remaining five expected before the end of August. Once fully dispatched, the two powerships will provide a combined 111 megawatts.
The 75-megawatt agreement carries a charter fee of 8.52 US cents and an operations-and-maintenance charge of 0.98 US cents per kilowatt-hour. GPL must also supply the heavy fuel oil used to operate the vessel, adding a separate fuel cost to the electricity it produces.
Indar said that contract is due to end later this year, but the government intends to use the vessel’s full generating capacity while awaiting electricity from the Gas-to-Energy Project.
The administration expects one 57-megawatt gas turbine to begin generating by the end of 2026. Greater capacity is scheduled to become available during 2027, although the project has already experienced several delays.
Indar said the government will review the Demerara powership agreement when gas-generated electricity becomes available, taking the contract’s exit provisions into consideration.
“At the point when gas-to-energy comes on board and we have generative capacity to offset that, we will be the first to produce,” he said.
The minister projected that gas-generated electricity would cost approximately five US cents per kilowatt-hour to produce, compared with the higher cost associated with rented vessels powered by heavy fuel oil.
The figure cited for gas-generated power would have to be assessed against the full expenses associated with the Gas-to-Energy Project, including infrastructure, operations and financing. Indar’s remarks focused primarily on the expected generation cost and fuel advantage.
Despite their expense, the minister maintained that both powerships remain essential to meeting current demand and stabilising the interconnected grid.
He also pointed to reduced electricity rates in Bartica and Region One, where solar installations are displacing some diesel generation.
According to Indar, rates in Bartica have fallen by 25 per cent, while consumers in Region One have received a 30 per cent reduction. He said savings from reduced fossil-fuel consumption were being transferred to customers.
