Papua New Guinea: China builds major BRI hydro-power project

The Ramu 2 Hydro-power Project will provide 183 MW of electricity to Papua New Guinea. It is being constructed in Ramu river basin in Eastern Highlands, Papua New Guinea.

The Ramu 2 Hydropower Project is the second the largest power infrastructure project to be undertaken in Papua New Guinea (the Karimui project in Simbu Province is the largest). On completion it is set to increase the existing Ramu 1 generating capacity by over 200% and boost the national generation capacity by a third (33%), using clean, sustainable and least cost sources of power.

The project will supply electricity to the people on the Ramu River System, and is also expected to provide electricity to the Wafi-Golpu and Ramu Nico Mines. While construction was first approved by the PNG government in 2016, commencement was delayed due to question marks over demand where significant amounts of electricity was intended to be consumed by a major new mine whixh at the time was yet to secure necessary investment.

In March 2021, Power Construction Corporation of China (PowerChina) announced it had signed an implementation agreement and power purchase agreement (PPA) for the Ramu 2 hydro electricity project.

Work on the 180 MW Ramu 2 hydroelectric project, PNG
Work on part of the 180 MW Ramu 2 hydroelectric project, PNG

The project meets goals identified in the National Strategy for Responsible Sustainable Development for Papua New Guinea (STaRS), which prioritizes green energy, economic diversification, and sustainable economic and livelihood activities. Ramu 2 also aligns with the move toward hydro under PNG’s National Energy Policy 2016-2020. The country needs significant improvements in energy capacity to implement broad access to electricity, and the Ramu 2 hydropower project will play a key role in meeting these goals.

The PNG government officially joined China’s Belt and Road Initiative (BRI) in June 2018 and announced that Shenzhen and Sinohydro had won the project bid in September 2018. The project falls within the initiative’s focus on energy projects, which accounted for 44 percent of BRI construction in 2019. Shenzhen Energy, the major contractor for the project, says it is “responding to the Belt and Road Initiative” through the Ramu 2 project. The project is being developed in a single phase and is expected to be commissioned in 2024.

It is understood the project will be delivered under a Public Private Partnership (build, own, operate, and transfer) model, under which the Ramu 2 asset will be transferred debt free back to the PNG Government after 25 years of operation. The State, the Eastern Highlands and Morobe Provincial governments, and the landowners will then own this multibillion dollar power infrastructure asset that will continue to operate for at least 75 years and offering a long-term least cost energy for the country.

Ramu 2 is a run-of-river project. Run-of-river hydropower typically has little or no storage and consists of a facility that channels flowing water from a river through a canal or penstock to spin a turbine. The project will have 3 turbines, each with 61 MW capacity.

The gross head and net head of the project will be 570m and 516m respectively. The total number of penstocks, pipes or long channels that carry water down from the hydroelectric reservoir to the turbines inside the actual power station, is planned to be 2 in number. The penstock diameter will be 2.75m. The project is expected to generate 1,190 GWh of electricity. The project cost is expected to be around $2,000 million.

According to a 2018 report by the International Hydropower Association (IHA), due to its mountainous terrain and high rainfall in many parts of the country, Papua New Guinea has abundant, although largely untapped, hydropower resources.

Despite many years of economic growth, less than 20 per cent of the country’s population is connected to the power grid, which is owned and operated by PNG Power Ltd (PPL), the state-owned power authority responsible for the generation, transmission, distribution and retailing of electricity throughout Papua New Guinea.

Hydropower development will be critical to not only improving household electricity access, affordability and grid reliability but also in achieving the government’s 2050 vision of a decarbonised power supply.

Hydropower accounts for approximately 40 per cent of Papua New Guinea’s installed electricity capacity, with plants operating in each of the country’s three main power grids: Port Moresby, Ramu and the Gazelle Peninsula. The remainder is supplied by a mixture of natural gas, geothermal and diesel-fired plants, many of which serve rural communities.

Sources: various.

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