GPL’s fuel cost significantly increased since 2020

May 27, 2024 News

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– $49.151 billion to be spent this year

Kaieteur News – For the past five years, the cost of fuel has increased significantly with some $49.151 billion to be spent by the Guyana Power and Light (GPL) to purchase fuel for its operations.

This information was taken from GPL Performance Statistics. The document stated that some 1,354,700 barrels of Heavy Fuel Oil (HFO) and Light Fuel Oil (LFO) were purchased by the state entity to the tune of  $16.171 billion.

With increases recorded annually since then, it was stated that this year GPL will purchase 2,191,585 of barrels of HFO and LFO, at the cost of $49.151 billion (US$228.34 million). The weighted average fuel price per barrel is US$104.19 – the document states.

In 2022, GPL had announced that the steady rise in fuel prices is negatively affecting its operations. In fact, it was stated that if the trend continues, generating costs are expected to trump revenue earnings.

Meeting Current Demand

This publication recently reported that consumers on the Demerara-Berbice Interconnected System (DBIS) can expect relief from frequent blackouts, as Head of the Executive Management Committee of GPL, Kesh Nandlall, announced that the company is currently meeting demand.

Nandlall made the disclosure during his appearance before the Parliamentary Sectoral Committee on Economic Services. He highlighted that from 2019 to 2023, there has been a 24% increase in demand, compared to a 14.9% increase between 2015 and 2018. He noted that this surge has placed significant pressure on GPL’s system.

According to GPL’s statistics, DBIS peak demand in 2022 was 153.3 megawatts (MW) and by the end of 2023, it grew to 186 MW. This year, the demand is expected to reach 232 MW. The gross generation for GPL is projected to increase at an annual average rate of 20% from 2024 to 2028, with DBIS gross generation forecast to grow at an annual average of 21% during the same period, and peak demand by 18%.

Nandlall explained that DBIS’ current available capacity is 209.4 MW. This includes contributions from the powership adding 36 MW, the Columbia power plant with 20.8 MW (with a full capacity is 28.9 MW), the Wartsila plant commissioned in 2021 adding 46.5 MW, and four Caterpillar sets added in 2023 providing approximately 5 MW.

“In that period of time, we have increased generation by 116 MW…” Nandlall said. He also noted that this capacity does not include 12.4 MW (5.5 MW + 6.9 MW) from two engines at Kingstown, Georgetown, which are currently down or 15.2 MW lost from other engines due to maintenance issues.

Nandlall disclosed that as of May 7, 2024, the peak demand was 183.2 MW – which is the highest for the year so far.  To this end, he noted that GPL requires a spinning reserve of 27.71 MW. “This is one and a half times the largest operating set we have. Currently, that is the 18 MW which is one of the engines on the powership,” he said.

Nandlall continued, “To meet the current peak demand 183.2 MW plus the 27.71 MW spinning reserve comfortably, we need 210.91 MW which we are comfortable with at the current time.”

Nandlall also outlined GPL’s plans for the rest of the year to maintain and add capacity. “By the end of May, the Columbia plant will commission which will add an additional 8.1 MW available generations, by the end of May also we would have completed one of the units at Kingstown which will add 6.9 MW, this will add up to which 224.4MW available generation,” the GPL executive said. He also disclosed that by the end of July, another engine will be operational adding 5.5 MW, bringing the total availability capacity to 229.9 MW.

Moreover, Nandlall said, “By the end of December, all maintenance issues should be caught up with as we have to incrementally bring down these sets to maintain them and we should have 245.1 MW.”

Technical and commercial loses

Moreover, the GPL executive also disclosed that technical and commercial losses from GPL’s system are currently about 25%. While being questioned by Committee member, Juan Edghill on what percentage of the losses is in relation to electricity theft, the GPL executive disclosed that the company has determined the figure to be about 13%. Edghill asked, “have we been able, based upon your technical expertise to isolate the areas where we are having significant electricity theft?” In his response, Nandlall revealed that the company is unable to do so.

To this end, he explained that in order to do so, it would require a significant amount of investment in terms of metering the feeders, to know the precise location of the bulk of the electricity theft losses. “We are working. We have several programmes that we are working on…some of it can be challenging and risky towards our employees but there are several programmes that we are continuously working on to reduce electricity theft or commercial losses,” Nandlall added.

Additionally, Edghill asked how severe of an impact that figure of electricity losses is having on the general delivery of electricity to the entire network. Nandlall responded, “The impact, normally my experience with other utilities that there is a natural lost factor that a utility will face and that’s dependent on the infrastructure…somewhere around three to five percent.”

He continued that naturally with GPL losses being around 25%, it is increasing the cost significantly.  Nandlall explained that what GPL is selling is 25% less than what is being generated. “So, it’s costing the company and it requires you to generate more,” the executive added.

It should be noted that the current administration has repeatedly stated that consumers are spared the burden of any increased cost of electricity, owing to the government’s proactive efforts to absorb rising fuel prices.

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• Columbia plant, Demerara-Berbice, Executive Management, Meeting Current Demand, Technical and commercial loses

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