Guyana to place HFO plants in reserve, in favor of gas-fired power in 2025

Guyana’s Vice President, Bharrat Jagdeo, said during a September 26 press conference in Georgetown, that the government expects to place its heavy fuel oil (HFO) power plants in reserve in 2025. 

This move is contingent upon the anticipated startup of a 300-megawatt natural gas power plant, which is part of Phase 1 of Guyana’s Gas-to-Energy project. The government expects the power plant to be operational in 2025, following the contractor’s completion of construction. 

As of September 2024, Guyana’s current power demand, including the main grid and isolated systems, stands at 205 megawatts (MW). However, the Guyana Power and Light Inc. (GPL), the state utility, projects that demand will increase to 245.77 MW at its peak in 2024 and to 301.46 MW by 2025. In that year, the 300-MW Gas-to-Energy power plant is expected to generate approximately 295 MW, and an additional 10 MW solar power plant will come online.

This would be sufficient to meet the country’s power demand for that year, allowing the government to put HFO plants on standby. “If the Gas-to-Energy project can meet the demand, and that is generating at 4 cents per kilowatt-hour, then every other generating set will go into reserve,” Jagdeo said.

This is expected to lead to a significant reduction in emissions from power generation, with Vice President Jagdeo previously stating that emissions could be cut by about 35% once the Gas-to-Energy project comes online.

Jagdeo mentioned that there are ongoing disputes between the government and the contractor (LNDCH4), including over the expected completion date of the project. Initially, the project was slated for completion in December 2024. However, due to delays in handing over the project site, the government agreed to extend the deadline to April 2025.

“We offered that, but the company doesn’t want that. They want more money. Because Exxon was managing this, they want a bit more money and they want a longer extension,” Jagdeo stated.

Winston Brassington, the head of the Gas-to-Energy Task Force, said in a September 26 release that the contractor may incur “liquidated damages.” Should the project be delayed beyond April 2025, and the government succeeds in arbitration, the contractor could face an US$11.3 million charge per month for late delivery, Brassington said.