The Guam Power Authority has pushed back the target date of completion of the 198-megawatt Ukudu power plant by six months, general manager John Benavente said Wednesday.
While the end goal for completion is April 2024, Benavente noted that the target was November 2023.
An update on the Ukudu project was at the center of the Guam Chamber of Commerce’s general membership meeting.
The plant is projected to produce approximately 40 percent of Guam’s power needs when construction is finished adjacent to the northern wastewater treatment plant in Dededo.
The $560-million contract for the Ukudu project was awarded to a consortium consisting of Doosan Heavy Industries & Construction with construction provided by Korea Electric Power Corp. and Korea East-West Power. Benavente announced the contract awarding in December.
Attended by a capacity audience of nearly 100 at the Hilton Guam Resort & Spa, Benavente’s hour-long presentation began with a “Current and Near-future Outlook.”
The financial overview set the tone by emphasizing the rising cost of fuel oil, its impact on the cost of power to the consumer, and the benefit of renewable energy project by bringing the Ukudu plant online.
The cost of fuel oil dropped during the pandemic by more than $25 per barrel to $52 but has risen back to 2019 levels at nearly $75 per barrel, representing 55 percent to 60 percent of expenses that are reflected in the cost to the public, Benavente reported.
At the same time, peak demand decreased sharply at the beginning of the pandemic in January 2020, directly impacting the utility’s revenue, but is back up to pre-pandemic levels.
There are presently around 600 new customers per year with approximately 15,000 customers in the system.
Renewable energy generated by the Ukudu plant will significantly lower the need for fuel oil.
Public Law 35-46, signed in November 2019, requires GPA to adjust its renewable energy portfolio.
By 2035, 50 percent of the power provided by GPA will be from renewable sources; by 2045, 100 percent will be renewable, according to Benavente.
Another issue faced by GPA, said Benavente during his near-future outlook, is the eligibility for retirement in six to 10 years of more than half of GPA’s current workforce of 440 employees. In response, personnel programs are in place to bridge the gap in the coming years in order to maintain service.
The second part of the presentation titled “Leading Transformation” began with an overview of the recent consent decree between GPA and the U.S. Environmental Protection Agency addressing compliance with the EPA’s emission requirements.
In addition to the 198 MW Ukudu plant that will burn ultra-low sulfur diesel (ULSD), a liquefied national gas, other projects include the conversion of a fuel delivery system from residential fuel to ULSD including refurbishment of fuel storage tanks and construction of a new ULSD pipeline; repowering Piti’s power-based units 8 and 9 with ULSD by July 31, 2022, and Cabras’ units 1 and 2 with low sulfur residual fuel oil after the fuel delivery system is modified with shutdown scheduled by the end of October 2024; the installation of a new energy storage system totaling 40 MW; and, the building of 100 NW of solar power, in addition to the 25 MW that is already installed, that will be provided by an outside contractor.
In addition to complying with EPA standards, the aim of these projects is to “increase renewable penetration, replace old plants and meet increasing demands. Proving the need for new and upgraded plants is the fact that those currently in operation will be 24 to 48 years old by 2023 and “100 percent are fueled by fuel oil, except for 25.3 MW of renewables,” Benavente explained. “Without new generation, load growth above 1 percent overcomes existing capacity by 2023.”
The Ukudu plant, Benavente said, offers resiliency since it will be safe from tsunami and typhoon water surges; provides backup for the island during overcast days when solar production is low; eliminates waste by using “wastewater for cooling, thereby eliminating thermal discharges into the ocean while reducing the need for freshwater withdrawal from the aquifer for energy production”; reducing the need for fossil fuel by 25 million gallons per year; providing “duel fuel capability of ULSD and natural gas for fuel diversity and cost stabilization”; and ensuring “reliable and sustainable energy to the most populated areas” on the island.