Renting of second power ship very feasible to meet demands – GS Jagdeo

General Secretary of the People’s Progressive Party, Dr Bharrat Jagdeo has explained the feasibility of renting a second power ship to meet the growing demands of electricity generation.

He was at the time responding to criticisms presented by Opposition Member of Parliament, David Patterson who expressed the view that costs associated with the rental of a second power ship are exorbitant.

GPL on Tuesday signed a second agreement with UCC Holdings for a second power ship to be deployed to Guyana in another month to assist in supplying the continuous increasing demand for reliable power in the country.

Dr Jagdeo explained that the cost to generate 1 Kilowatt-hour of power using GPL’s existing depreciated equipment is around 18 US cents.

However, if GPL had to pay off the cost of the equipment over time, the cost per kilowatt-hour would be about 20.5 cents.

“If we had to generate, say, 75 megawatts of power, it is about 18 cents to generate 1 kilowatt hour. When we take the first power ship at 7.6 cents plus the 13 cents for fuel, it comes up to 20.6 cents,” the GS reasoned during his weekly Freedom House press conference.

He argued that the rental costs presented by Patterson were done in isolation, without considering the underlying cost of generating the same amount of power, which is nearly the same as the rental cost.

Moreover, the cost of renting the power ship also includes fuel as well as operation and maintenance works.

Dr Jagdeo recognised the urgent need for additional capacity, underscoring that the renting of a second power ship provides a more practical short-term solution.

“We are trying to get more power into the system because the demand has grown,” he emphasised. “We’re renting capacity, and it’s for two years, so it’s bridging power. It’s bridging power until the gas-to-energy project comes on stream.”

The new power ship will be stationed in the Demerara River and will, in its first phase, deliver 60 megawatts of generating capacity to the national grid. In its second phase, 15 additional megawatts of power will be delivered to the grid, bringing the total amount to be supplied to 75 megawatts.

Dr Jagdeo also highlighted the government’s subsidy on electricity prices, which means consumers are not paying the full cost of power generation.

“We’re selling it at 22 or 23 cents per kilowatt-hour, because it depends on the category, but really our cost of generation plus the transmission cost is nearly 30 cents per kilowatt hour. That’s how we are subsidising,” he pointed out.

This amounts to US$70 million in subsidies, ensuring that consumers’ electricity bills remain at a stable rate since 2020, despite the global escalation in fuel costs.