Papua New Guinea has positioned itself globally as the country-to-watch in the fight against climate change when it was the first country in 2016 to submit its national climate action plan under the Paris Agreement.
The country’s climate action plan commits PNG to fully shift to renewable energy by 2030 and embrace a future of clean and renewable energy.
A realistic pathway toward this target requires building a varied generation portfolio to manage cost and reduce supply risks, such a portfolio will include a growing number of renewable energy options, including hydro (water), solar (sun), and biomass.
According to Michael Henson, Project Director of PNG Biomass, a growing renewable generation mix will help PNG develop its energy sector and ultimately fully transition to renewable energy.
Henson said biomass power generation has several key benefits over other energy fuels. “It is renewable, sustainable, and reliable. It is an adaptable, scalable, clean, local fuel. And, it is affordable, as the energy cost of biomass power is low – it is cheaper than diesel, heavy fuel oil, and most fossil fuels.”
He said in comparison to hydro and solar power generation, biomass power can be harder to understand. For this reason, a short instructive animation has been developed that explains in simple terms the process of how energy (electricity) is produced from biomass (trees), which is available online: www.pngbiomass.com/videos
Henson explained that the renewable energy produced by PNG Biomass is priced mostly in Kina with a fixed real price over 25 years. Unlike fossil fuels, the biomass power price does not change with the oil price or dollar/kina exchange rate. In addition, by valuing the social, environmental and economic components included in the biomass price as benefits to the state rather than costs, the net biomass price to the State is one of the cheapest power options. Biomass power is therefore price competitive for PNG and an excellent low-cost energy source.
PNG Biomass, the country’s most preeminent biomass project, has been established in the Markham Valley of Morobe province and is wholly-owned subsidiary of Oil Search. It is building a 30 MegaWatt (MW) biomass power project to contribute to the electrification of PNG and transition to renewable energy.
Together with landowners, PNG Biomass is establishing 16,000 hectares of plantations to grow trees that will fuel a biomass power plant that is being constructed between mid-2018 and 2020. With a 25-year Power Purchasing Agreement signed with PNG Power the new biomass power plant will start dispatching power into the Ramu Grid by 2020. By producing energy and growing the Ramu Grid it is anticipated to reach almost half of PNG’s population, as within 20 kilometers of the grid live about 5 million people.
PNG Biomass is one of several power suppliers to the Ramu Grid as the grid needs a complementary generation mix. This means that it needs a mix of technology and fuels to meet demand, mitigate risk, and align to the size and timing of the growth of the grid. But it also allows for powering different market segments using different technologies and fuels.
There is an existing core customer base of residential, commercial, government and small industry. These core customers will benefit from small increase of (15-30 MW) low-carbon with their electricity generation capacity. This is where PNG Biomass fits in: 30 MW is enough to power 200,000 households, or about a million people, as household loads are not high loads.
New large hydro generation can be matched to new large mining loads to best meet their scale and their often uncertain timing. And ultimately, under the right conditions, small amounts of supply can be exchanged between these two markets. So small low-carbon generation and large hydro generation complement each other as they generally serve different customer bases.
PNG Biomass is one of only two Independent Power Producers selected through an open international transparent and competitive tender process. The project is also part of PNG Power’s ‘Least Cost Development Plan’ for the Ramu Grid, included in PNG’s 100-day plan for economic growth, and endorsed by NEC and price-approved by ICCC.
Besides the technical and economic endorsements for the PNG Biomass, the project also brings a range of social and community benefits. A local productive economy will originate from the PNG Biomass project. The project will build and maintain roads, offer communities agricultural cash crop opportunities, actively help landowners register their land under ILGs, and already employs 200 local people. Soon this will be 500 long-term jobs in rural PNG, and there will be 400 construction jobs once we commence building the power plant later this year. By now over K100 million has already been invested in this biomass project that will save 4 million tonnes of CO2 emissions and generate an estimated K740 million in household income over its 25-year project life.
Henson emphasized that “PNG Biomass puts landowners and communities at the core of the project. It is for Papua New Guineas, by Papua New Guineas. We meet key Government policies and targets. We are fully approved and endorsed, and ready to commence construction to advance inclusive economic growth and social development locally, regionally, and nationally.”