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Gas supplies being diverted to inefficient Gencos

Under the new priority set by the federal government, natural gas supplies are being diverted to inefficient power generation companies whose efficiency rates are as low as 25 percent, said sources. Furthermore, these thermal plants were run without flow measurement metres.

The plan pushed by the Ministry of Water and Power will not improve power generation substantially but surely deprive other efficient gas users of this energy source, claimed sources. The Ministry of Water and Power, which has failed to resolve the power crisis issue in the last many years, has not succeeded in getting its plan approved to monopolise the use of gas, said sources.

Natural Gas Load Management, approved by the Economic Coordination Committee (ECC) the other day, was submitted by the Ministry of Petroleum and Natural Resources for approval.

In the backdrop of power outages, the Ministry of Water and Power had requested for enhanced gas supply to power plants on the Sui Northern Gas Pipelines Ltd (SNGPL) system. The ECC decided that first priority will be given to domestic and commercial sectors. The power and general industries will be accorded second and third priority, respectively.

While the cement sector will be on fourth and CNG sectors will be on fifth priority.

The bureaucrats of the Ministry of Water and Power believe that every molecule of gas should belong to power sector at the expense of other important sectors of economy, said sources, adding that inefficient and gas-guzzler thermal plants and wasteful distribution systems with severe line losses on the power grid system would be one of the most unwise recipients of gas supplies.

However, the federal government has given the green signal to divert gas supplies to thermal plants, most of which are highly inefficient.

According to a technical audit study of Jamshoro, Guddu and Muzaffargarh thermal power stations, conducted in 2011 by Hagler Baily Pakistan, several gas turbines showed net efficiencies of 25.3 percent to 32.1 percent.

All the steam units of TPS Jamshoro and TPS Muzaffargarh are dual fuel plants having gas and residual fuel oil (RFO) firing facilities except for unit 1 of Jamshoro that has fuel oil firing capability only. TPS Guddu uses medium calorific raw gas from Mari and Kandhkot. Steam units three and four at Guddu can also operate on mixed firing with RFO as the secondary fuel.

Most worryingly, as per the report, due to poor maintenance of the power stations, GENCOs have lost nearly one-third capacity and 17 percent thermal efficiency due to plant degradation.

The average decline in the net efficiency of TPS Jamshoro is about 20 percent from the design efficiency of the power station. The average availability of the power station was 84 percent in FY2010 and 72 percent in FY2011 till November 2010. However, if this availability is corrected for lost output of the plant due to degradation, the availability factor would drop by 35 percent, indicating poor performance of the plant, said the report.

TPS Muzaffargarh is operating with an overall capacity degradation of 40 percent. Capacity degradation for the units varied between 20 percent for unit two to 63 percent for unit six. The power station is facing an overall degradation of around 18 percent in its net efficiency.

Based on the audit team’s observations, it was found that no credible measurement system exists for natural gas supplied and consumed at the Guddu power station and most other allied facilities of power generation companies.

At Guddu, the gas supplied to residential colony is not even measured.

The measurement instruments are not calibrated, non-functional, or absent, disclosed the audit report.

According to sources, the Ministry of Petroleum has looked at equitable solutions for gas consumption for all sectors, while the

Ministry of Water and Power is not considering the well being of other sectors of economy.

Gas consumption by power sector is highly inefficient with many power plants utilising 20-25 percent of their capacity. The Ministry of Water and Power is still not endorsing Thar coal reserves and imported coal, which has an unlimted capacity to produce power.

Conversion of existing thermal power plants will pre-develop the market for new coal mines, hence eliminating the market, especially for development of Thar coal.

But nothing concrete is being done on this important developing front.

For conventional steam turbine thermal units, the only possible option is to convert them to cheap fuel of coal, said sources.

The benefit of converting furnace oil plants would be through savings on fuel cost component and expedite import of gas or use alternative fuels available such as LNG for gas turbine or reciprocating engine, they added.

One efficient use of gas, as per an independent study, can be manufacturing of urea.

The urea manufacturing process is in fact a value addition process in which gas is not simply burnt like other users.

As per studies, urea is the most expensive form of energy that is imported costing around $23/MMBTU, whereas RFO and LNG would be 30-50 percent less expensive than urea on a MMBTU or heating value basis.

Hence, power can efficiently be used by importing fuel, said sources.

When contacted, Spokesman Ministry of Water and Power Tanvir Alam said that only efficient thermal plants would get priority in view of gas supplies under the new arrangements.

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