Government officials in the small South American country of Guyana have given the go-ahead for construction of a 300-MW natural gas-fired power plant, a facility that would represent a major expansion of the nation’s power generation capacity.
Cabinet members on Nov. 10 approved the project, which President Dr. Irfaan Ali has said will help reduce the cost of electricity across the country by more than half. Ali said a construction contract is expected to be finalized by the end of November.
“The government of Guyana, via [its] Cabinet, today issued its no-objection to the ranking of CH4/Lindsayca as the number one-ranked group to build a 300-MW combined cycle power plant and natural gas liquids plant at Wales, West Coast Demerara, under an engineering procurement construction [EPC] contract,” Ali said in a Facebook Live video. A joint venture of CH4, a Guyana company, and Texas-based Lindsayca was among five groups that submitted bids for the project in an auction in September of this year.
Ali said CH4/Lindsayca was chosen ahead of the No. 2-ranked Power China. The winning group said they could build power plant, and NGL facility, for about $900 million.
“Cabinet’s no-objection will now allow negotiations to proceed to conclude an EPC contract. Power China . . . may be engaged if negotiations fail to conclude a contract with CH4/Lindsayca by the end of November,” Ali said.
Lower Cost of Electricity
The president said that the cost of electricity from the project, including consideration of gas pipeline transport costs, operations and maintenance, and recovery of capital costs, will total less than five cents per kilowatt hour. The government, which subsidizes the country’s current electricity costs, said costs today are about 13 cents/kWh.
Data from the U.S. Dept. of Energy shows Guyana has about 350 MW of installed power generation capacity, with 92% of that capacity burning heavy fuel oil and diesel. Biomass accounts for most of the country’s remaining generation.
“This is a significant movement forward in Guyana—not only achieving energy security, but us achieving an important benchmark that is a reduction in our energy costs so that our manufacturing and industrial development and expansion can take place and so that the ordinary families and the ordinary people can feel a substantial reduction in the cost of electricity in their pockets and in their household,” Ali said.
“Just for reference, a family at the end of this project that now pays GY$20,000 per month [about $97] in light bill or electricity costs will see that costs coming down to GY$10,000 [about $48],” he said. Guyana has a population of about 790,000.
Nine companies earlier this year were announced as pre-qualifiers to bid on the EPC contract for the plant’s construction. Five bids were then considered by the Sept. 13 closing date of the auction. President Ali said Stantec and Worley, two global engineering firms, evaluated the bids based on technical compliance. A three-person team, including a representative of Exxon, was appointed to rank the final bids.
“The evaluation team performed the evaluation in accordance with the technical and economic criteria set out in the RFP [request for proposal]. On the basis of the bids submitted and clarifications received, the evaluation team unanimously ranked CH4/Lindsayca as number one, and Power China as number two,” Ali said.
The president said a “key consideration” of the evaluation process was the ability for the EPC lead to deliver the plant by year-end 2024. Both CH4/Lindsayca and Power China confirmed they could meet that deadline.
Engineers India Limited, a global construction supervision group, will oversee construction.
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).