Oil Search expects PNG Biomass to generate considerable benefits and opportunities for PNG and its citizens during the 25-year project life. By providing reliable power that is sustainable and in harmony with the environment and the community, the project is a key driver for the growth and the well-being of the people of PNG. PNG Biomass will have large and long-lasting positive benefits in an area which is not presently benefitting from a resource project.
PNG Biomass contributes to the PNG Government’s electrification goal of increasing its consumer base of electricity to 70% by 2030 by adding significant renewable energy generation capacity of 30 MWe.
The energy produced by the PNG Biomass project will be stable, competitively priced and not affected by increases in oil prices. Under the PPA, the power produced will have a fixed price over the life of the project, with a significant component in Kina, which will mitigate risks of fuel price and currency rate fluctuations for PPL.
PNG Biomass will generate domestic power to support the country’s community infrastructure and to drive and underpin industrial development in the Morobe and Madang provinces. Domestic production of biomass power also ensures a long-term reduction in the exposure to power prices associated with increasing imported diesel and Heavy Fuel Oil (HFO) costs, and lower payments overseas for liquid fuel.
PNG Biomass will create major local employment opportunities in the Markham Valley. An independent economic study estimates that the 16,000 hectares (ha) plantation, the power plant and associated plantations will provide over 500 direct ongoing jobs over the 25-year project life with an additional 650 jobs during construction and plantation establishment, with PNG nationals constituting more than 95% of the total workforce.
Many more additional indirect jobs (over 2,000) will be created in a region that has traditionally faced significant unemployment for youth and women. PNG Biomass is already employing 50 people through the Zif Faring Business Group – the first project-related community business group established in February 2017.
An important element of the project is that landowners obtain additional benefits from the land leased to PNG Biomass. For example, intercropping, where food and cash crops are planted between the rows of plantation trees, is proving to be a significant economic activity and a local income generator. Landowners are able to materially increase their income by co-planting (intercropping) between trees on the plantations.
In addition to this cash cropping benefit, landowners also benefit from land rental, crop share, employment and local business development, like the community nurseries, where landowners are paid for plant production. PNG Biomass is also exploring the most effective way to integrate the grazing of cattle between mature plantation trees.
PNG Biomass will enhance PNG’s international environmental reputation and demonstrates PNG leadership in climate adaptation and renewable energy. The project works closely with the PNG Climate Change Development Authority to assist the country in meeting its international climate change goals and commitments. The project has very low emissions as biomass is many times cleaner than coal or other thermal generation based on oil or diesel. It will save 84,000 tonnes of CO2 (Carbon Dioxide) emissions a year for each 15 MWe unit, when compared to the use of diesel and fuel oil for power generation.
Carbon credits are a measure of the sustainable and renewable credentials of a project. PNG Biomass is undergoing international carbon certification under the Gold Standard for the Global Goals to secure independently verified carbon credits related for afforestation and fossil fuel displacement. PNG Biomass is expected to displace fossil fuel generation of more than 4 million tonnes of CO2 emissions over the life of the project.