Guam launches KEPCO's Ukudu power project, opens Mangilao solar farm
Updated: Jul 22, 2022
By Mar-Vic Cagurangan
Dirt was turned on the Ukudu power plant project and a ribbon was cut for the official launch of the Mangilao solar farm during back-to-back events, which officials said marked “a tremendous step” toward Guam’s goal to reduce reliance on fossil fuel and become 100 percent powered by renewable energy by 2045.
“Both milestone projects are crucial to the reliability of our system and the affordability of our service to our ratepayers, not only today but on a sustained basis for decades to come,” said John Benavente, general manager of the Guam Power Authority.
GPA and KEPCO broke ground today on the new Ukudu 198 MW combined cycle plant on a 45-acre property in Dededo. The project is targeted for completion in April 2024.
Lee Heyn-Bin, KEPCO's senior vice president and chief business management officer, said he expects global events to pose challenges that might disrupt the project. However, he added, "we will ensure that electricity is provided in time."
Lee vowed to get the Ukudu plant commissioned by April 2024.
Jeong Irl Min, CEO of Guam Ukudu Power, said despite the Covid-19 pandemic, the crew started the groundwork on the power plant “to avoid any potential delay of the project.”
Amid any potential challenges ahead, Min said GUP will make sure the project is completed by the target date.
The $562-million power plant will replace GPA’s aged, decades-old generating plants and allow the agency to diversify its energy portfolio with renewable and stored energy.
“This state-of- the-art, high efficiency baseload power plant will increase reliability of service. Not only will this new plant meet and exceedUSEPA clean air regulations but it will reduce our dependence on fossil fuels and our carbon footprint,” Benavente said.
KEPCO managed the financing and assumed the costs under the built-operate-transfer model. The asset will be transferred to GPA after 25 years.
The Ukudu power plant will feed 60 percent of GPA customers who are currently getting their power through underground lines.
“In a nutshell, the Ukudu 198 MW plant will ensure we meet the island’s growing energy requirements reliably and at a lower, affordable cost,” Benavente said.
Benavente said the Ukudu plant will cut Guam’s fuel imports and consumption by at least 500,000 barrels per year due to its high thermal efficiency.
“At today’s fuel prices of about $150/ barrel, this translates to keeping $75 million in Guam’s economy, multiplying and providing benefits to our community,” he said. “Coupled with low-cost utility-scale renewables, it is now possible to see energy rates become affordable within the next three years.”
Immediately after the Ukudu groundbreaking, GPA and KEPCO officials proceeded to Sasayan Valley in Mangilao for a ribbon-cutting that marked the official launch of the island's largest solar farm.
The 60-MW Mangilao solar farm began operating last month, generating energy under the contract purchase price of $0.085/kWh.
Officials said the solar farm will produce a minimum amount of 141GWH per year which at today’s LEAC rate translates to about $24 million in annual savings.
“The plant reduces our annual fuel oil import by another 250,000 barrels. The 25-year power purchase agreement contract with KMS with a limited 1 percent annual price escalator provides our ratepayers an excellent hedge against fluctuating fuel oil prices,” Benavente said.
Construction of the solar power farm started in May 2020 and was completed in 25 months.
"This contracting model, and about another 400MW of renewables projects, will ensure GPA achieves its 50 percent renewable energy mandate by 2035, while addressing intermittency concerns in providing more reliable, clean, affordable energy to all ratepayers," the GPA manager said.
Simon Sanchez, chair of the Consolidated Commission on Utilities, said the two projects will be "a game-changer" that will "exceed" Guam's energy goals. "We look forward to a powerful future," he said.