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PNG Biomass insights on affordable power

Photo: Project Director of PNG Biomass, Michael Henson, addressing the Lae Chamber of Commerce breakfast attendees on the challenges of affordable power.

“Power generation and transmission in island nations is typically more expensive than in larger economies. That is a reality we face in PNG but often misunderstood, ignored or brushed aside,” said Mr Michael Henson, Project Director of PNG Biomass, during an information breakfast hosted by the Lae Chamber of Commerce at the Lae International Hotel on Monday.

During the session Henson explored the challenges that small island developing states face in powering their economies with affordable power. Addressing cost, scale, demand and reliability, he provided a rough outline of how countries like Papua New Guinea can develop a pathway to affordable, and ultimately cheap, power.

Henson illustrated these challenges by drawing on examples from his experience with PNG Biomass, a renewable energy project in the Markham Valley. He explained that the Biomass Project has left no stone unturned to slash their tariff to the most affordable power price point possible. However, he emphasised that today’s best power price in PNG cannot compete with the often-quoted much cheaper benchmarks from large-scale economies in Asia.

“We have explored every possible avenue to bring our power price down. For us this meant redesigning our power plant, taking on concessional financing, seeking out grants, and reducing our returns to next to nothing. Fortunately, we are in a position to do so, our project sponsor Oil Search wants to deliver clean, affordable and renewable energy in a sustainable way that drives inclusive rural economic growth. For that reason, I want commend Oil Search and Peter Botten for their ongoing commitment to make this project a reality – no matter the hurdles that have been thrown our way. If we can get this Project across the line, and we are very close now, this project will provide the foundation for the sustainable development of the Ramu Grid.”

Nearing the end of his presentation, Henson shared some exciting news, announcing that PNG Biomass is evaluating the addition of a 11 MW solar farm to its Markham Valley site to further reduce the cost of power to the State. “By adding this solar farm we could create a Markham Renewable Energy Park of 41 MW installed capacity and hopefully become a catalyst for the country’s transition to renewable energy by 2050,” said Henson.

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