…construction likely to start this year
A Power Purchase Agreement (PPA) is being negotiated for Guyana to boost its electricity generation capacity with more renewable energy sources such as the Hope Wind Farm Project.
During a presentation at the International Energy Conference and Expo in Georgetown, Hope Energy Development (HED) Inc Project General Manager John Sydow, on Thursday said the company was currently working with the Guyana Power and Light (GPL) to finalise the 20-year PPA for the project.
“So, it is possible to get to construction in this year [if] everything goes right… I’m not putting dates on this, because everything hangs on that PPA. Once, we’re done with that [signing of the PPA], the timeline is in our control again,” Sydow explained.
With the necessary feasibility and environmental studies already conducted and approved by the relevant regulatory bodies, when the PPA is in place then the Engineering, Procurement and Construction (EPC) design and financing aspects would take less than a year after which the Final Investment Decision (FID) would be done before construction can commence. Another six to 10 months would be needed for the construction of the wind turbines overseas and transportation to Guyana.
“Most of that effort, though, is the civil works: roads, foundations, piling and such, and of course, the electrical works – that’s the collector lines and the substation. Most of that work will be local contractors,” he explained.
With six wind turbines along the East Demerara coastline, the Hope Wind Farm project is expected to add 25 megawatts of power to the national grid through a nearby substation thus reducing the power company’s reliance on fossil fuels.
HED has formed a joint venture with international partners to carry out this project, including Vestas Wind Systems – a Danish manufacturer, seller, installer, and servicer of wind turbines. This company will be manufacturing and installing the turbines for the project. Vestas will also be taking the EPC lead to build the plant and will have a 15-year operation and maintenance contract catering for performance guarantee of the wind turbines as well as the training of three local technicians.
In addition to the wind farm, the project has a 20-megawatt solar farm.
“We realised that with the wind resource that the peak power is in the evening, which is good. It matches the evening peak that you have here – the domestic peak. But the average wind speed lowest is midday which is when the sun is shining so then the question is ‘how can we get the highest capacity use of the substation by adding solar’ and it turns out, 20 megawatts of solar is a good amount before you start have these two competing with each other through a 25-megawatt substation.
“So, the results of this is a project with combined solar and wind at 25 megawatts with very high average output, starting to approach run-of-river projects that we have seen and looked at in other places. So this is good news. This is much, much better than we had thought that was possible when we first started this project,” the Project Manager stated.
HED is the project developer and is responsible for getting it ready for construction thus undertaking all the risks. However, after two years when the risk element is eliminated, the project will be handed over to low-risk investors.
These include Vestas and Hope Wind Energy (HWE), which is the Special Purpose Vehicle (SPV) with all the assets and will finance the project. HED will be supporting HWE with the operation and maintenance of the substation and lines.
According to Sydow, this investment model is what is typically adopted for renewable energy projects in Europe, the United States, and other regions around the world.
He went on to note that there was a lot of interest in financing this project from both international and regional banking institutions. However, they are looking to have a high ownership percentage by Guyanese investors.
“So, we are the guys that have to clean up the project and get it ready for these investors. At financial close when we’re about to start construction, we hope to entice a lot of the private investment community here to come onboard. We are aiming for more than 50 per cent [Guyanese ownership]. We would like to reverse, depending on how the investment goes, for pension funds, insurance companies, etcetera, so the more institutional investors that have to meet much low-risk levels,” Sydow said.
The Hope Wind Project, at construction stage, is expected to create 50 to 100 job opportunities for Guyanese with some 15 to 25 permanent jobs for technical staff, who will benefit from training as well.
