A power purchase agreement was finalised yesterday between PowerGen and the T&T Electricity Commission (T&TEC) covering the supply of electricity for the next 15 years.Speaking at the signing ceremony at the Radisson Hotel, Port-of-Spain, Finance Minister Larry Howai said the agreement consolidates "the strategic role played by independent private sector power producers since 1994."
He said: It was in that year T&TEC was restructured with the separation of a power generation facility from T&TEC to a new company, PowerGen which is also owned 51 per cent by T&TEC and was driven by an independent private sector power producer."In addition to the power purchase agreement between PowerGen and T&TEC, an agreement was also signed between Government, Powergen, Maruenergy Trinidad LLC and NEL Power Holdings Ltd.
Howai said while PowerGen has performed satisfactorily over the last 20 years, power is now avaliable from other sources and its market share has fallen.
"Now it was faced with a strategic decision relating to the facilities at Port-of-Spain which has become over time less and less efficient. With power now available from Trinidad Generation Unlimited (TGU) and entering the national grid and with a power purchase agreement coming to an end, the conditions for transitioning from an aging plant to modernize power facilities became evident," he said, adding that the agreement between PowerGen and T&TEC will generate savings.
"The agreement allows a sequence decline in power generation from the existing 890 megawatts to 624 megawatts in January 2016. From a financial perspective this will generate savings for T&TEC with a conservative estimate at about $84 million on an annual basis. This will allow the utility increasing flexibility to provide the citizens of this country with a regular supply of power," Howai said.
Indarjit Singh, chairman of PorweGen, said the station on Wrightson Road will be closed after being in operation for 50 years."Plants with commissioning facilities have already been developed and the process has started. We expect the site to be restored to either brown field or green field status depending on whether it will be used for new generation or some other activity," he said.
Singh said PowerGen, which has 52 per cent of market share, must confront the growing reality of falling revenues and higher cost."We must rise to the challenge of being more productive if we are to maintain the level of service to our customers," he said.
