Power barge ‘too expensive’, no longer being considered

Power barge ‘too expensive’,  no longer being considered

Caretaker Prime Minister Dr. Luc Merclina (centre) flanked by Ministers Veronica Jansen-Webster (left) and Grisha Heyliger-Marten (right).

~ Containerised energy approved ~

PHILIPSBURG--Authorities are no longer considering renting a power barge to help alleviate on the short term the power crisis being encountered, as this option, which ranges from US $3.9 million to $8.2 million per month, is too costly for the country.


MPs during the meeting.

GEBE will instead be renting containerised energy, a solution that has already been approved by GEBE’s Supervisory Board of Directors, caretaker Prime Minister Dr. Luc Mercelina told Members of Parliament (MPs) during a Central Committee meeting on Monday. The meeting was originally scheduled to take place in a closed door setting however, after internal deliberations the meeting continued in a public session.

Monday’s meeting began with a lot of finger-pointing and blame being thrown around as to who was responsible for the power crisis in which the country finds itself. MPs also asked a number of questions, followed by Mercelina making a presentation on the options on the table and responding to some of the queries posed.

Mercelina explained that while GEBE’s Supervisory Board has already given the green light for the containerised energy, a decision is still to be made this week as to which option will be pursued. He said two options are on the table, including one made by Nation Opportunity Wealth (NOW) MP Christophe Emmanuel. “There is no doubt that containers will be ordered, but we are looking at two options – one is the one that MP Emmanuel was giving us as an alternative to what we were busy with already,” Mercelina explained.

Too expensive

Mercelina said authorities have been looking quite extensively into the power barge solution and realised during their analysis that it is a very expensive solution for the short term. He said renting the barge to provide 20 megawatts (MW) of electricity would cost approximately $3.9 million dollars per month. Renting for 32MW would cost $5.4 million per month and 50MW $8.2 million per month. This includes fuel.

He explained that the power barge could be in the country and functional in six weeks – approximately 10 days to get to the island and an additional four weeks to get it functional to produce energy for the community. Additionally, a down-payment has to be made.

As it relates to the containerised energy, Mercelina said the containerised generators can come in different formats depending on the number of megawatts required, starting at one megawatt per container. Once the decision is taken to order the containerised generators, it will take an average of three months for them to arrive and become functional to service the community. It will cost approximately $300,000 per month excluding fuel.

With the containerised generators arriving in three months after being ordered and the power barge in six weeks, Mercelina believes it makes little sense to pay the exorbitant amount of funds

for the power barge to serve the country for just six weeks, a conclusion that many MPs disagreed with. Some MPs said the cost is not too much for residents to have a stable and reliable energy supply.

Mercelina said, “The benefit that we will get from the barge will be between the six weeks and the three months that we will have the containers here so it will be very expensive to order the barge only for six weeks.” Additionally, a deposit will have to be paid before the barge is sent to the country. The deposit fee for using the barge for less than two years is $3 million. “Once you pay that $3 million, you will only have six weeks benefit out of it,” said Mercelina, reiterating that the barge would be too expensive for the country.

Resuscitating Generator 19

Because the barges are now off the table for the short term, authorities are considering reviving engine 19, which has a crankshaft issue. “We are looking back into Unit 19 – the generator. … We know that the crankshaft is the bigger problem in that unit. They are making now, at this particular moment, with external expertise, an analysis and report about Unit 19 to see that if we take the risk and invest to change the crankshaft that there will be no more diseases in the unit,” Mercelina said.

Government is awaiting the report on Generator 19, which Mercelina said GEBE has informed government will be on the table for decision-making by Friday this week on whether it is worth investing the $2.7 million needed to fix the crankshaft issue.

“That would be an ideal solution, because if we get Engine 19 back, it’s going to contribute back to approximately 9 extra megawatts and that will help in the total demand needed for the country coping for the six weeks that we have exposed – that we cannot cover because the barge boat is too expensive for that,” he explained.

If the report is positive about fixing the crankshaft, GEBE “will introduce a plan to ask big hotels and businesses a way to cooperate … if they have their own power, if it’s solar, or own energy generators, to see if they can help us by disconnecting from the grid in a way that we will be able to manage that remaining six weeks extra that we cannot cover until we get the [containerised] generators on the island. This is where we are standing,” said Mercelina.

Financing update

As it relates to financing, Mercelina said that while he cannot go into details, negotiations are being held with a few potential financiers to realise this project.

GEBE itself is one of the options. “The financial position of GEBE is as follows: There are no outstanding debts at this particular moment. There are no significant accounts-payable. There are no active overdraft facilities and there is a respectable cash reserve in the sense that in case we take a decision for the containers, GEBE can assume responsibility for that one,” he said.

“Second to that we need, of course, the financier for the loans to bring in the three units each of 9MW and we are now working with a local group to form a consortium and that is why I requested this closed meeting … but we are working with a consortium on the island consisting of banks and institutional investors to see if we can get to a solution to get a loan to see if we can start ordering, in the meantime, the three units – the big ones each producing the 9MW and I have information that we are quite far in negotiations to get to a conclusion to that direction.”

Given that this is a national crisis and threat to the safety of the livelihood of the people, Mercelina said he is also busy in discussions with the Netherlands to see what sort of loan St. Maarten can get in this urgent phase to help finance the purchase of the three new generators that will be needed, as well as to outfit the power plant to accommodate the new generators.

“We are busy with BZK. We are busy with a consortium that is very promising and we have

GEBE to back us up with the initial ordering of the generator containers,” he explained. General Pension Fund APS is part of the consortium.

The possibilities to fund alternative green energy are also being discussed with funds such as Groeifonds [National Growth Funds], the European Union Bank and the Incentive Scheme for Sustainable Energy Production and Climate Transition (SDE++) [Stimuleringsregeling Duurzame Energieproductie en Klimaattransitie], amongst others.

Mercelina explained that government is the shareholder representative of GEBE and in this capacity government can offer advice to the company, but decision-making as part of corporate governance is the responsibility of GEBE’s managerial and supervisory boards.

“I have been working very, very hard to get a solution. I have presented to you the solutions that we have for GEBE and unfortunately, we will not be able to go with the barge boat because of the high price tag. We will have to go with the generator containers and from there on ordering the three units and from there on focus on alternative energy.

“Alternative energy is not a solution for now. … We have lost a lot of opportunities in the past for us to do what we had to do for us to have a good energy supply for the country. That was lost in the past on actions and investments that did not take place [and it] cannot be replaced by a vision plan with alternative energy and green energy. That is not possible. You will have to go back to generators to stabilise the country first and once you have the basics stabilised, of course, we want to further continue with the vision of alternative energy for the people of St Maarten.”

He explained that plans will be made for green energy now to be introduced in two years.

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