The Independent Consumer and Competition Commission (ICCC) would like to advise the industry stakeholders and general public that it has issued an electricity generation licence to Markham Valley Biomass Limited (MVBL) to generate and supply power.
The Generation licence is issued to MVBL following its compliance of all the licensing requirements under the Electricity Industry Act (EIA) and other industry legislations and regulations.
MVBL is a subsidiary of Oil Search Limited and has a Power Purchase Agreement (PPA) with PNG Power Limited (PNG Power) to generate 15 megawatts of power from biomass in Markham Valley, Morobe Province and supply to PNG Power through its Ramu Grid.
ICCC Commissioner and Chief Executive Officer, Paulus Ain said that MVBL submitted its licence application to the ICCC on 17th July 2017 for review and approval.
“The licence application was submitted after its PPA (including power purchase price) with PNG Power was reviewed and approved by the ICCC.”
“As a requirement under the Electricity Industry Policy (EIP), a copy of the MVBL’s application was forwarded to the Electricity Management Committee (EMC) to review the technical aspect of the application concurrently with ICCC’s internal assessment.
“On the 22nd of August, 2018, the EMC provided its assessment and recommendation to the ICCC.”
Commissioner Ain said that after having assessed the MVBL’s application to be consistent with section 24E and 24F of the EIA and taking into consideration EMC’s recommendation, the ICCC considers MVBL to be a suitable entity to hold a generation licence.
The approval of MBVL’s generation licence, brings the total number of electricity undertakers operating in the generation segment of the electricity industry to nine.
PNG Electricity Supply Industry is separated into four segments: generation, transmission, distribution and retail with licences issued for each segment. The following are current licence holders with their various licences;
- PNG Power Limited- Generation, Transmission, Distribution and Retail
- Lihir Gold Limited-Generation, Distribution and Retail
- PNG Forest Products- Generation, Transmission, Distribution and Retail
- Ok Tedi Mining Limited- Generation, Transmission, Distribution and Retail
- New Britain Palm Oil Limited- Generation
- Posco Daewoo PNG Limited -Generation
- Daewoo Power PNG Limited -Generation
- Exxon Mobil PNG Limited -Generation
Some of these licence holders operate in off-gird isolated centers producing power for their core business operations and supply access power to nearby communities and business, while others are mostly Independent Power Producers (IPPs) who generate and supply their excess or wholesale power to PNG Power under a PPA.
The generation segment of the electricity industry is now open to competition as facilitated through the Third Party Access (TPA) Code managed by the ICCC. TPA Code facilitates third party access arrangement between network owner such as PNG Power and IPPs by setting out access rules and guidelines including the pricing mechanisms.
Commissioner Ain added that since the establishment of TPA Code by the ICCC in 2014, there has been a growing interest from industry players to participate in the large load market (greater than 10 megawatts) of the generation segment.
“Electricity undertakers who wish to participate in the PNG Electricity Supply Industry are advised to submit their licence applications to the ICCC in a form approved by the ICCC.”