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Inefficient captive power plants causing loss of Rs70bn

Inefficient captive power plants installed at industrial units getting natural gas at comparatively reduced tariff are causing a loss of Rs70 billion per annum to the national exchequer.

Ghiyas Abdullah Paracha, chairman of the Supreme Council All Pakistan CNG Association (APCNGA), said that the policy to provide cheap gas to the captive power plants was framed to gain political favours, which was causing a colossal loss to the economy.

“The technology, efficiency, cost, consumption, production and other parameters related to the captive power plants are questionable, as industry has been using scrap plants in place of modern and better equipment,” he said at a meeting of the APCNGA Central Executive Committee. Later talking to The News, Paracha said that the average efficiency of 113 captive power plants, mostly installed in textile units, stood at 28 percent and a lot of gas was being wasted in the process of generating electricity, causing a loss of Rs190 million per day.

Quoting the data of Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL), Paracha said that the captive power plants were getting 454mmcfd gas per day, of which 327mmcfd was lost to inefficiency.

The Planning Commission and the Ministry of Water and Power have also termed primitive captive power plants a major drain of indigenous hydrocarbon resources.Paracha said that the government is favouring owners of captive power plants on the cost of domestic consumers, compressed natural gas, fertiliser and general industry.

Several industries closed since long were being provided gas, while the power generated through that gas was being sold to running industrial units without approval from the regulator, National Electric Power Regulatory Authority (Nepra), which must be probed, he said.

The country would not have faced energy shortages of such magnitude if decisions were taken on merit and the gas allocated to the captive power plants was provided to efficient power houses, Paracha said.

“Power generation companies are facing heavy losses as gas consumption, as well as around 2,000MW load has been shifted to the unregulated gas gulping the captive power plant sector, which do not require a licence and have no performance and efficiency checks,” he said.

“The operation and maintenance cost of the distribution companies is getting high; average tariff is going up, while average sale declines, causing losses to the government but the captive power plants thrive on economical gas and the petroleum ministry support.”

Criticising the move to lower the efficiency benchmark for the captive power plants, Paracha demanded a probe in the issue to fix responsibility on those who played havoc with the country for their personal welfare.

He demanded an immediate comprehensive and independent audit of the captive power plants, ban on distribution companies buying power from the captive power plant, using cheap gas as fuel and concrete steps to improve the efficiency and avoid wastage of precious natural resources in the national interest.

“The government needs to increase gas tariff for the captive power plants by a minimum of 150 percent to resolve all issues, ensure efficiency and reduce power outages. Besides, there is a need for a well-integrated power policy, addressing various issues to ensure an overall development of the sector and economy,” he added.

Solar lamps distributed

Punjab Minister for Education Mian Mujtaba Shuja-ur-Rehman distributed solar lamps among selected students of Shalamar Boys College on Saturday.According to a handout, speaking on the occasion the minister said during the current fiscal year 125,000 laptops were being distributed among the students on merit under a transparent system. The college principal, a number of teachers and students also spoke on the occasion. Meanwhile, in connection with Punjab government’s Ujala Programme, solar lamps distribution ceremony was also held in Govt College of Home Economics, Gulberg. Advisor to Punjab CM Begum Zakia Shahnawaz was the chief guest on the occasion. As many as 159 students of the college received the solar lamps.

Solar lamps distributed

PUNJAB Chief Minister Shahbaz Sharif has envisioned progressive policies for the students which aim at facilitating them in their studies. These views were expressed by PML-N MNA Mian Marghub Ahmad at a function held in connection with distribution of solar lamps among the position holders at Govt Islamia College, Civil Lines, Lahore.

Bajaur to have solar streetlights soon

The development under the Tribal Areas Rural to Urban Centres Conversion Initiative (Tarucci) might have been slow due to various reasons but the authorities claim that Khar, the headquarters of Bajaur Agency, is going to be lit with solar streetlights soon under the said project.

“Solar streetlights in Khar’s main bazaar and agency headquarters hospital would be installed within two or three months. Work on installation of the streetlights has already been started,” project director Omar Khan told Dawn. He added that about 450 solar streetlights approved under the project would cost about $1 million.

The official said that after installation of the streetlights the traders would be able to keep their shops open till late in the evening as peace was restored in Khar.

The traders had guaranteed that they would make sure no one damaged the lights, he added.

“The solar streetlights would be a boon for the local traders, who can hardly keep their businesses open owing to prolonged power loadshedding in the evening,” said Ahsanullah, a shopkeeper at Khar Bazaar.

It would definitely help the businessmen, he said, adding that about four solar lights were already installed by Fata Development Authority in a bazaar that brought about a positive change as people came out at night.

The shopkeeper said that people in Khar hardly got any light owing to severe power crisis during summer. It would have been better if water supplying machines or tubewells were also run on solar energy to solve water supply issue in the area, he added.

Under the multi-donor trust funded Tarucci, about $7 million would be spent to set up urban centre at Khar to improve access of tribal people to better facilities.

The project was formally launched in June 2012 but the last eight months were spent in planning. Khar is supposed to be turned into an urban hub over a period of three years after the execution of the project.

“We have made a plan for the next 20 years for Khar and planning is time consu

Ghazi Barotha fault caused blackout in country

The Feb. 24 countrywide power outage has been blamed on a fault at the Ghazi Barotha Hydropower Project (GBHPP) and not at the Hubco (Hub Power Company plant).

Meanwhile, Wapda chairman is trying to sweep the fact under the carpet, a senior official of the Ministry of Water and Power told The News.When the whole country was in pitch dark, the Water and Power Development Authority (Wapda) dumped the blame on the Hubco.

“After Hubco broke down, the system was first diverted to Tarbela and then to Mangla, but both of them tripped offline one after the other,” Wapda spokesman told media persons on February 24.

However, now it has been detected that it was not a fault at the HUBCO, rather the mishandling of engineers at Ghazi Barotha Hydropower has been detected as the prime reason for the countrywide blackout.

After the country plunged into darkness, the prime minister constituted a committee to probe into the incident. The committee was directed to present its enquiry report within seven days, the sources said.

According to the copy available with The New, the committee has submitted the report to the premier showing that the fault at Ghazi Barotha hydropower project triggered a cascading effect in the whole transmission network causing the countrywide blackout.

The report says shift engineers at Ghazi Barotha Hydropower Project observed the severed jerks on the system followed by an abnormal sound from the penstock side and main generators of Unit, 1, 3, and 4.

The generating units were shifted to the isolation mode from routine power mode due to extremely low system and the shift engineers on duty shut down the units as a precautionary measure to avoid any probable damage due to extremely low storage ponds level; it was apprehended that due to aeration and air trap phenomenon, the tunnel could be damaged abruptly.

On account of action of the engineers, all the 500 and 220 KV transmission lines were found de-energized. The report says the abnormality occurred due to cascaded outages of various plants in the south of power network resulting in low frequency and unstable operation at Barotha power station.

Zardari inaugurates two infrastructure projects

President Asif Ali Zardari has inaugurated Hyderabad-Mirpurkhas Dual Carriageway and Jhirk-Mulla Katiar Bridge plus announced the launch of the Thatta-Tando Mohammad Khan Road and a 100 MW power project in Nooriabad, Sindh.

The inauguration ceremony was held at the Chief Minister House on Friday and was attended among others by Governor Sindh Dr Ishrat-ul-Ibad Khan, Chief Minister Sindh Syed Qaim Ali Shah, MNAs, MPAs, civil society organisations and high ranking government officials.

Addressing the gathering, the president said that the completion of Hyderabad- Mirpurkhas Dual Carriageway and the bridge over Indus at Hirk Mulla Katiar would provide the vital link between rural Sindh and urban market centers and enhance trade and commerce.

The President expressed the hope that the completion of the 100 MW Nooriabad power project would not only augment the energy resources but also lend new impetus to the public-private partnership projects in the province.

He said that these economic development projects would usher in a new era of progress and prosperity in Sindh by promoting industrialisation, creating opportunities and attracting local and foreign investors.

Low power generation levels persist post-blackout

Even two weeks since a nationwide blackout, power generation has yet to be restored to the earlier levels. Sources suggest that this is due primarily to a flawed strategy and imprudent use of available resources.

The biggest challenge being confronted by the federal Ministry of Water and Power, which enjoys the status of the de facto executive authority of the power sector, is enhancing the output of thermal plants by judiciously utilising available fuel options. Presently, about 4,000 MW of thermal plants having ‘dependable’ installed capacity are idle.

The incompetence of officials has resulted in very low output of power generation units, putting extra stress on the electricity transmission system, a phenomenon that knocked down the country’s entire power system on February 24, 2013.

When Nargis Sethi, the previous secretary of Water and Power was removed from office, the power system was already left vulnerable to such crises as monitoring entities such as the Energy Management Committee and Energy Management Cell has been eliminated. More worryingly, no corrective measure is being taken to restore power generation amid rising temperatures in the country. Power generation dipped to 9,600 MW on March 7, 2013, which is below the level of 9,700 MW achieved before the power system collapsed in the last week of February.

The demand for electricity is on the rise and was recorded at 13,600 MW yesterday – 500 MW more than the level registered before the collapse of the electricity system.

Power managers are ignoring the striking difference between the generation capacity of plants in the public and private sectors. Based on 2010-2011 data, the thermal generation efficiency for public sector generation companies (GENCOs) remained 27.5 percent with respect to gas and 30.2 percent with respect to furnace oil.

KESC-operated plants were slightly better off with a gas-based efficiency of 32.5 percent. Independent Power Producers (IPPs) or private thermal plants collectively demonstrated a generation efficiency of 43 percent on gas and 39.4 percent on furnace oil.

This difference between GENCOs and IPPs is due largely to the old technology and equipment installed at GENCOs, improper maintenance, and operational mismanagement coupled problems associated with fuel, including its theft and contamination.

If official figures are to be believed, it is obvious that 1.9 million tons of furnace oil given to IPPs instead of GENCOs in 2010-11 would have resulted in additional generation of 2,000 MW of electricity. In other words, 1.898 million tons of furnace oil given to IPPs instead of GENCOs in 2010-11 would have saved 0.442 million tons of oil for generation.

As per an analysis of power plants, engine or steam turbine power plants are the most efficient users of oil and should be given top priority for furnace oil consumption.

Experts dismayed over poor performance of power sector

Experts have expressed dismay over the performance of the power sector during 2008-12, as an addition of 3,000MW was wasted in distribution and recovery losses.

Data compiled from the official records of the Pakistan Electric Power Company (Pepco) reveals that the average daily electricity shortfall was 1,850MW in 2008 that increased to 6,325MW in 2012, registering an increase of 242 percent. The generation capacity increased by 3,000MW from 20,232MW to 23,643MW, depicting an increase of 16 percent.

In 2008, the total hydroelectric and thermal generation in the country was 61,628 gigawatt per hour (Gwh) that increased by 15 percent to 71,592 Gwh. So the increase in power production was only one percent less than the increase in the power production capacity.

The hydroelectric capacity during this period declined nominally by 0.1 percent, the data showed.

“Besides increase in the furnace oil rates, the factor that added to the woes of the power sector was the ever-deteriorating recovery of billed amount and increase in distribution losses,” Brigadier Mushtaq Ahmad, former chief executive officer of the Gujranwala Electric Company, said. In 2008, the distribution and recovery losses of the entire power sector were Rs119 billion, which shot up to Rs207 billion in 2012, showing an increase of 73.8 percent, he said.

Both higher distribution losses and inability to recover the billed amount is due to criminal negligence of the power managers, he said, adding that low end-consumers are update on their electricity bills.

“The main defaulters are politician-cum-industrialists,” Brigadier Mushtaq said, adding that the failure of the power managers to collect bills and arrest power theft is due to the reasons that appointments at the crucial posts were not made on merit but on political grounds.

He said that a part of line losses may also be due to overloading in the power system.

While only 16 percent power was added in the already depleted system, the number of power consumers increased by 17.2 percent during 2008-2012, he said. In 2008, total power connections were 18 million that increased to 21 million in 2012, he said, adding that this increase in the consumer base ensured that the power shortages would continue to grow.

Average consumption per consumer declined from 3,943 units in 2008 to 2,984 units in 2012.This, he said, was partly due to less availability of electricity because of higher power outages.

Mohsin Syed, power sector expert, said that other disturbing aspects of the last five years performance of the power sector include increase in subsidy from Rs112 billion in 2008 to Rs554 billion in 2012.

He said that the government owed Rs85 billion to independent power producers (IPPs) in 2008 that ballooned to Rs500 billion in 2012. This is part of the story as over Rs500 billion of IPPs debt has been paid by taking loan from commercial banks, adding to the sovereign debt.

He said receivables from the consumers were Rs118 billion in 2008 that increased to Rs385 billion in 2012. Ghalib Atta, another power sector expert, said that the performance of the power distribution companies has declined in some cases to an unmanageable level.

The recovery of billed amount in Quetta Electric Supply Company was 86 percent in 2008, which declined to only 36 percent in 2012. Similarly, headed recovery rate at the Peshawar Electric Supply Company was 92 percent in 2008 and 68 percent in 2012, in Hyderabad Electric Supply Company, it was 77 percent in 2008 and 69 percent in 2012, in Islamabad Electric Supply Company and the Lahore Electric Supply Company it was 98 percent in 2008 and 96 percent in 2012. The recovery rate was 99 percent in Faisalabad Electric Supply Company in 2008 and 98 percent in 2012.

The recovery of electricity bills remained stationary at 97 and 98 percent in the Multan Electric Power Company and Gujranwala Electric Power Company, he added.

Nepra proceedings against defaulters

The National Electric Power Regulatory Authority (Nepra) has initiated proceedings for recovery of outstanding dues against regulated companies to secure its revenues.

According to officials, recovery proceedings have been initiated against eight private power companies including Grange Power Ltd, SUNEC Wind Power Generation Ltd, Arabian Sea Wind Energy Ltd, Eastern Power Company Ltd, First Tri Star Modaraba, Green Electric Power Ltd and Gujranwala Energy Ltd.

The recovery proceedings have been initiated under Nepra Fine Rules 2002.

Sources said that these power companies owe the authority a cumulative sum of over Rs25 million. All of the above mentioned companies failed to respond to various letters, reminders and an explanation letter dated December 6, 2012.

In case these companies fail to comply with the notice of demand, Nepra may send a recovery request to the collector of the Islamabad Capital Territory specifying the relevant details of any property owned by these companies or their receivables from any source, which may be sold or attached for purposes of payment of the sum due.

The collector will prepare a certified account based on the recovery request and serve a notice of demand, the certified account and the recovery request on these defaulting companies.

If the companies do not comply with the notice of demand served by the collector within a period of 15 days, the collector shall forthwith pass orders directing the attachment or sale of the properties specified in the recovery request.

MoU to electrify villages signed

Buksh Foundation and ZONG signed a memorandum of understanding (MoU) to provide electricity to two Punjab villages, a statement said.

The partnership was made through a project “Lighting a million lives” that will provide solar-powered light to two villages to start a long-term partnership. The initiative is a part of the TERI project that aims at providing light to a billion people worldwide through solar power, it said. Under the partnership, the cellular operator will sponsor the establishment of solar charging stations in the selected villages in Chiniot district, providing solar lanterns for the use of the villagers, which can be regularly charged at the solar charging stations. This is the first time in the country’s history that a telecom company is investing in a clean energy initiative to provide the much-needed light to those living in the rural parts of the country, the statement said. Around 43 percent (80 million people) of the total population of Pakistan lives without electricity. Interestingly, while some of the villages do not have electricity, their residents still have cellular connections and carry cell phones. The common practice in these areas is that one of the villagers’ collects all cell phones and goes to a nearby town with electricity to recharge them. By investing in the solar charging stations, the cellular operator is also making the process of recharging hassle-free for the two villages. The initiative has important socioeconomic benefits also. As the solar charging stations will be operated by women from the same villages, the project directly promotes women empowerment.