The country’s hydro resources have the potential to transform the utilities segment

With thousands of kilometres of rivers and monthly average rainfall often exceeding 300 mm, Papua New Guinea is well suited for hydropower production. Unfortunately, the same geography and climate that makes the country conducive for power development also creates barriers to its development. Most notably its rugged features pose significant challenges to connecting locations conducive to building hydropower plants to the industrial and population centres that need power. These challenges, along with other issues, have resulted in only around 230 MW of installed hydroelectric power across PNG in spite of boasting a potential in excess of 4200 MW of installed capacity capable of producing some 36,800 GWh per year, according to estimates by the International Energy Agency. In reality, this figure is likely much greater with one 2012 World Bank study noting that a dearth of actionable hydrological data made it difficult to assess the country’s full potential, particularly on its two largest river systems.

PNG is by no means alone in coming late to the hydropower party – a situation the country shares with its regional peers. Like PNG, Asia as a whole employs just a fraction of its hydropower potential, and has an estimated total of at least 1300 GW of unused power, according to the World Bank. PNG’s peak electricity demand and electricity ratio is expected to increase rapidly over the next two decades. If the country is to maintain adequate power supplies as electrification and industrial usage increases, new hydroelectric capacity will likely play a key role. According to the country’s Strategic Development Plan 2010-30, installed capacity in the country will need to nearly quadruple from 500 MW currently to 1970 MW by 2030. Hydropower is to make up the bulk of this, expanding from 215 MW in 2010 to 1140 MW by the end of the plan.

Current State

The majority of hydro assets are owned and operated by the state-owned enterprise PNG Power, which runs hydropower plants with a combined installed capacity of 176 MW. The largest of these is the Rouna network which helps to power the Port Moresby System. Rouna is composed of four primary hydro units on the Laloki River, with units one and three contributing around 12 MW each and units two and four a bit more at 24 MW and 40 MW, respectively. The smaller 1-MW Sirinumu Toe-of-Dam also contributes to the Port Moresby grid.

The country’s next largest grid, the Ramu system serves Lae and the surrounding areas and is also primarily powered by hydro stations. These include the 75-MW Yonki facility and the 12-MW Pauanda power plant. The Gazelle grid’s chief contributor is the 10-MW Warangoi hydropower station. West New Britain also maintains smaller hydro facilities, including the 0. 8-MW Ru Creek plant and the 1.5-MW Lake Hargy power plant, both operated by PNG Power.

Growing Capacity

As part of its effort to improve its electrification ratio, the government is also working with international institutions through its rural electrification programme to extend power service to the more remote regions of the country. Another means of serving pockets of the population that would otherwise be without power is through the development of private hydro projects. The most common of which are carried out by large mining operations working in remote regions of the country. With large power consumption needs and no grid access, purpose-built hydropower projects are often the best, if not only, means of providing enough power for both their own industrial operations and the surrounding villages. One of the most established of these is the privately owned 58-MW hydropower system serving the Ok Tedi Mine and surrounding areas in Western Province. Timber company PNG Forest Products also operates two small hydropower plants with a combined capacity of 8 MW that supply power for the firm’s operations with the remaining excess sold back to the Ramu grid.

Seeking to add new capacity to the grid, a number of hydropower projects are now in various stages of development. The most advanced of these is the construction of the Yonki Toe-of-Dam hydropower plant project being carried out by PNG Power. An extension of the original Yonki Dam built in 1991, the current addition seeks to add two more 9-MW generation units. Although the engineering, procurement and construction contract was awarded in 2008, the project was mired in delays, pushing back the expected completion time from 2012 to 2014. The original contractor was replaced in 2011 by Japan’s Daiho Corporation. After civil works were completed in early 2013, Daiho contractor Nippon Koei began installation of the final components, with assistance from Austria’s Andritz Hydro. The PGK75m ($30.49m) Yonki plant should be commissioned before the end of 2014.

Progress is also being made on two more PNG Power sites where preliminary works for small-scale hydropower projects were being carried out as of late 2013. Each of the two stations are to have an installed capacity of roughly 3 MW, with one site near Pondotto in Oro Province, and the other near Buka in Bougainville. Furthermore, the refurbishment of the Ramu 1 power station is set to increase the efficiency of the aging plant while boosting installed capacity from 45 MW to 60 MW, according to PNG Power. After successfully refurbishing the Rouna 2 station in 2006, Andritz Hydro was also awarded a contract for the design, supply, procurement, manufacture, workshop testing, transport, installation and commissioning of the necessary equipment for the project. Work on the station’s five generation units was initiated in June 2013 and is expected to be completed by September 2015.

Down The River

Looking further out at long-term developments, three projects that are considerably more ambitious and would go a long way towards bridging the electricity supply and demand gap in the country are the Naoro Brown, Ramu 2 and Wabo projects. The first of these, the 80-MW Naoro Brown hydroelectric power plant, is being developed by PNG Power under a public-private partnership at an estimated cost of PGK570m ($231.7m). Another project in the feasibility stage as of mid-2014 is the 130-MW Ramu 2 power station, which will be the Ramu system’s final plant, channelling water from the Yonki Reservoir.

Lastly, PNG Energy Developments Limited (PNG EDL) continues to look into the feasibility of developing the Purari Hydro Resource at Wabo in the Gulf Province. If the project moves forward, it would be by far the largest power project ever undertaken in PNG at 1800 MW and has the potential to single-handedly transform the country. A 50:50 joint venture between Origin and PNG Sustainable Development Programme, PNG EDL is to construct the dam, which is designed to have a capacity factor in excess of 90% and provide a reliable source of electricity for remote villages and rural communities, as well as industrial development. The viability of linking the project to Australia’s national grid via an undersea cable is also being explored as a means to offload excess power. Made up of two, 250-km lengths of high-voltage, direct-current cable, the transmission link would run from PNG down to far north Queensland and ultimately feed into the national electricity grid at Townsville, via Weipa.

Although the project has yet to move past the early developmental stages, its sheer scale continues to intrigue potential participants, who have been conducting research and exploratory surveys of the area for more than 30 years at the proposed site on the Purari River. These surveys have revealed that the Purari is one of the wettest basins in the country, with the river reaching flow rates of 2500 cu metres of water per second and consistent rainfall that averages around 8 metres of rain per year near the village of Wabo.

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The Report: Papua New Guinea 2014

Energy chapter from The Report: Papua New Guinea 2014

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