Georgetown: The Guyana Sugar Corporation’s (GuySuCo) energy assets at Skeldon, Corentyne, Berbice, Region Six (East Berbice-Corentyne) have been transferred to a new energy company called the Skeldon Energy Inc (SEI).
Chairman of the National Industrial and Commercial Investment Inc (NICIL), Winston Brassington who is also Chairman of the Guyana Power and Light Inc (GPL) said that Cabinet has approved that the GuySuCo energy assets located at Skeldon, along with its Power Purchase Agreement (PPA) be transferred to the newly created special purpose company; the Skeldon Energy Inc (SEI).
According to Brassington, the state owned SEI will be jointly owned by GPL and NICIL. In consideration of the transfer of the assets, GuySuCo will be paid a total of US$30 million. Additionally, SEI will supply power to GuySuCo at the same prices that GPL currently pays GuySuCo today.
“Expected benefits of the restructuring of the Skeldon energy assets include: The enhancement of the-generating capacity of the Skeldon Wärtsilä and Bagasse, co-generation power plants; provide GPL and GuySuCo with a stable and reliable source power generation and relieve GuySuCo of the responsibility to manage the power generation; provide US$30 million of capital resources to GuySuCo; secure, stabilise and expand the power generating capacity located at Skeldon, as part of the Demerara-Berbice Interconnected System (OBIS) power grid, by increasing energy supplied to the grid by 50 per cent by the end of 2016 and almost 100 per cent by 2019”, Brassington said.
The GuySuCo power-generating assets consist primarily of three Wärtsilä power plants with an installed capacity of 10 MegaWatts (MW), and a Co-Generation Bagasse Plant with an installed capacity of 30MW, Brassington explained. Skeldon Energy Inc, with the support of the power company, has contracted Wärtsilä to rehabilitate, operate and manage the combined power plants effective April 1, 2015. This new development will in no way affect the current systems of operations as all persons currently employed by GuySuCo will be seconded to the operation on the same terms and conditions currently enjoyed.
According to Brassington, Skeldon Energy Inc will be funded with equity financing (US$9 million) from NICIL [US$5 million] and GPL [US$4 million] and debt financing (US$21 million) from GPL and local and international financial institutions. Repayment of the financing will be via the sale of power under the two PPA’s to GPL and GuySuCo.
GuySuCo will also sell to SEI the bagasse used in required for its Skeldon operations. On the basis that GPL will purchase most of the power from SEI under a PPA and the plant being operated by Wärtsilä, the new management company will provide financing for the rehabilitation of the 10MW plant. It is a fact, that GPL and Wärtsilä enjoy the longest operational and maintenance relationship in the history of Wärtsilä. Brassington said SEI will inherit the many benefits including discounts on spares and over 95 per cent availability on the GPL owned but Wärtsilä operated plants.
He said too that Wärtsilä currently operates a number of bagasse and steam generating facilities in the world, for example they operate various bagasse plants in India and a steam plant in The Dominican Republic. SEI expects the Wärtsilä plant would generate at the full 10MW capacity by 2015 and the Co-Generation Bagasse Plants at full 30MW capacity over the medium-term, subject to the availability of bagasse. Over the last two years, Wärtsilä has performed a full audit of the Skeldon Wärtsilä operations and the costs of rehabilitating the plant.
Brassington related that the power company has since last year been supplying as much as 12 MW of power into Berbice through the newly commissioned transmission line that now allows one interconnected grid between Demerara and Berbice. “Rehabilitation and expansion of Skeldon will reduce the need and risk in transmitting power from Georgetown, and may over time, allow this trend to be reversed”.
He said the projected generation of the combined plants of 40MW by 2016 will be over 20 per cent of the generating capacity of the entire Demerara-Berbice Interconnected System. He related too that the Skeldon Energy Inc will operate with two Power Purchase Agreements to provide power to GPL and GuySuCo. In addition to the existing PPA between GuySuCo and GPL being transferred to SEI Inc, a similar one will be entered into between SEI and GuySuCo.
You must be logged in to post a comment.