The Government is expected to review the contract for the 75-megawatt (MW) powership operating in the Demerara River when it expires later this year, with any renewal decision to be based on the progress of the Gas-to-Energy Project and the additional generation capacity it provides.
At the same time, the Government has extended the contract for a separate 36MW powership in the Berbice River by another two years, citing the vessel’s importance to electricity supply and voltage stability in that part of the country.
Minister of Public Utilities and Aviation Deodat Indar made the disclosures at a press conference last Friday, as he addressed questions about the Government’s reliance on rented generation capacity and the costs associated with the two vessels.
The first powership arrangement was secured in April 2024, when Guyana Power and Light (GPL) entered into a two-year agreement with Urbacon Concessions Investments (UCI), a subsidiary of UCC Holdings, for the charter of a 36MW vessel.
The powership arrived in Guyana the following month and was connected to the national grid at Everton, East Berbice, as Government sought to strengthen the Demerara-Berbice Interconnected System (DBIS) amid rising electricity demand and insufficient generation capacity.
According to Indar, retaining the vessel in Berbice remains necessary because of its contribution to the stability of the electricity network.
“There’s a reason why we put the 36MW in Berbice. We put it there so that you can bring up the voltage level on that side,” he said.
The original agreement carried a charter fee of 6.62 US cents per kilowatt-hour and an operation and maintenance charge of 0.98 US cents per kilowatt-hour.
Indar said the initial arrangement therefore amounted to a negotiated rate of 7.62 US cents per kilowatt-hour.
Under the renewed agreement, the rate has increased to 9.5 US cents per kilowatt-hour, incorporating capacity and operations and maintenance charges.
A second powership agreement was subsequently signed in November 2024 with Karpowership Global DMCC and UCC Energy International LLC, providing GPL with access to another 75MW of generation capacity.
The vessel, located in the Demerara River near Ruimveldt, was initially dispatched to the national grid at 60MW.
Indar said the Government is now taking steps to utilise its full capacity, with an additional 10MW already being supplied and the final 5MW expected by the end of August.
“We were already taking 10 out of the 15. We’re waiting on five more to come at the end of this month,” Indar said.
The 75MW contract, also signed for two years, carries a charter fee of 8.52 US cents per kilowatt-hour and an operation and maintenance charge of 0.98 US cents.
GPL is also responsible for providing the heavy fuel oil needed to operate the vessel.
Indar said the Government intends to continue using the full 75MW until the Gas-to-Energy Project produces enough electricity to reduce the need for the rented generation.
He said the Government will then examine the contracts and determine whether they should be terminated, considering the exit provisions contained in the agreements.
Indar also disclosed that he and Prime Minister Brigadier (Retired) Mark Phillips had secured a commitment from the project contractor to deliver one Gas-to-Energy turbine, capable of generating approximately 57MW, by the end of 2026.
Once the 75MW vessel reaches full output, the two power ships will collectively provide an additional 111MW of generation capacity to the national grid.
Indar maintained that, for now, both vessels remain important to maintaining a reliable electricity supply as demand continues to grow.
