The people of Pakistan, especially the power customers, have a great grouse against what is commonly referred to as Wapda. Although, Wapda's power wing has since long been de-bundled under a reform programme and converted into Gencos, the NTDC and nine Discos, the people still refer to the power issues as pertaining to Wapda alone.
The main complaint against the Discos is an extremely high tariff, which has seen an average 100 percent rise during the last three years. That this rise has been up to 200 percent for some categories and around 50-70 percent only for some others further complicates the scenario.
The power sector managers, on the other hand, talk of certain factors beyond their sway as being responsible for the steep rise in prices - foremost being the inordinate jump in oil prices from a low of US $37 to US $100 at present. They further propagate that the burden of oil prices has manifested in a debilitating manner because the earlier requirement of 780 mmcfd of gas has since been curtailed to as low as about 250 mmcfd for the public sector Gencos alone.
It is further informed that the firm allocation of 70 mmcfd for Kapco against the full need of 200 mmcfd (once Wapda's flagship venture and now privatised) too has been cancelled since the last three years through the non-extension of the binding gas supply agreement with SNGPL.
The money managers of the power sector further inform us that full gas supplies to the sector can easily bring the power tariff down by a hefty 30 percent, thus doing away with the imposition of the current level of the monthly fuel price adjustment. Incidentally, this price adjustment is the present bone of contention between the Discos and the customers - so much so that nearly all the high courts are privy to litigation in this regard.
Although, the courts have issued restraining orders, but the final decisions are bound to allow the legally determined adjustments (by Nepra) to be recovered from the customers. Agreeing to the above thesis, the requirement boils down to one specific issue viz. that somehow the earlier withdrawn gas has to be returned to the power sector at least for the coming 2-3 years and during which other solutions for the conversion of existing public-sector power plants to cheaper fuels could be undertaken. This seems to be an uphill task specially when the country is facing a 1 bcf shortage of gas at present. Unfortunately, most of the professionals also consider any extra gas supplies to the power sector as a most unlikely preposition. However, the facts belie this thrust of opinion.
Consider. Ogra has pinpointed unaccounted-for gas (UFG) to be in the range of 13 percent or so for both the SNGPL and the SSGC systems. Imagine the savings if this figure could be brought down even by 1-3 percent in the coming three months, specially when huge amounts are available for this activity under the World Bank/Asian Development Bank loans and the USAID grants. It is further seen that 3.5 million gas fired water geysers are operating in the country and guzzling a staggering 600 mmcfd of gas. Simple installation of conical bafflers in the fire tubes of these geysers can save up to 30 percent of the fuel intake and full conversion to solar heater systems can subsequently wean the geysers away from gas use.
It is such a viable idea that the gas companies and the Discos can jointly underwrite the provision of this gadget. Thirdly, it is in full knowledge of everyone and which has been debated at all forums that there is widespread theft at the CNG stations across the country. Various kinds of banners displayed at these stations highlighting huge discounts attest to this conclusion, which is further bolstered when seen along with high-level of UFG in both the gas utilities.
The situation attains even more serious proportions when we see that CNG usage is on the rise with 58 percent increase in such usage in the south alone. Here, it is recommended that strict vigilance be undertaken by the gas companies and the defaulters and those indulging in illegal abstraction of gas be pinpointed for permanent removal from the pipelines. Additionally, it is seen that all the CNG stations are fed through the low-pressure system, while the right way is to use high pressure pipelines for filling-up the CNG stations.
This irrational way of dispensing gas is responsible for a loss of billions. Case in point would be the only 19 CNG dispensing points in Delhi ICT (Indian Capital Territory) against more than 350 such facilities in Lahore. Consequently, but in sustained manner, the existing system has to be upgraded. The quick and hefty gains out of this exercise can easily be passed on to the power sector. It is also pertinent to state that human resource and other facilities of the power sector (Discos) can be used to supplement the efforts of the gas utilities.
More so, when 2000 or so complaints and customer service centres of the Discos are already operating in the jurisdictional areas of the SNGPL and SSGC. Incidentally, such an offer from Pepco was spurned by the SNGPL in early 2010. According to rough estimates, 183 mmcfd of gas can be saved through these measures alone.
It is also witnessed that most of the CNG suppliers at the busy intersections of urban areas are utilising gas more than their sanctions. A quick survey (easy when only a few sites have to be studied) can list the defaulters, who then can be corralled to stay within the limits. This according to experts can easily reduce the present usage by up to 10 percent.
Looking at the various sectors being fed by the gas companies, another group stands out menacingly as a predator. These are the captive power plants (CPPs) originally fed along with the CNG pumps by both the SSGC and the SNGPL out of the cuts of Gencos and the Kapco (only one from the IPPs) made during the period 2000 to 2008. Here, it is seen that the usage has no reliance to the relevant clauses of the Gas Management and Allocation Policy of 2005, which specifically requires optimum and efficient use of such allocations through co-generation and combined cycle power plants. All what is needed now is the implementation of rules and the policy in vogue. This would arrange for the disconnection of a large number of the defaulters and surely immense savings, which could be passed on to the troubled power sector.
Experts from amongst the SNGPL and SSGC cadres further inform us that savings can also be made through ensuring use and sale of standards burner tips (12.0 million) in the country. According to these experts, a saving of up to 100 mmcfd of gas can be arranged in an operation spread over five years. This converts into a first year saving of 20 mmcfd on an average and double for the next year and so on, which is not a mean achievement.
However, for this purpose, the regulator viz. Ogra, Ministry of P&NR, the gas companies, Enercon (correctly placed under the Ministry of W&P now after the wilderness of the last decade or so), PCSIR, PSQCA, etc would all have to work in tandem.
At this point, we would also talk about the requirement to stop giving further gas connections or extension of pipelines. In fact, a downsizing plan has to be implemented whereby the system facing low-pressure could be reduced under a set time schedule to maintain the technical parameters of a standard system. The right answer, thus, is the arrangement for providing LPG to the new domestic consumers through delivery and vending systems to be maintained by the SNGPL and SSGC companies.
The private sector already in this business may carry on with their businesses in competition to the public sector. The necessity for this step can be gauged from the fact that 67,000 kms of transmission/distribution lines in 2008 have now reached the unmanageable figure of about 90,000 kms for the SNGPL alone. This step will contribute at least 100-200 mmcfd during various months of the year.
More so, when seen in the context of the 106 percent upsurge in 2010 consumption in comparison to that of year 2000. Besides, this step would result in frugal use, conservation and reduction in UFG and rise in productivity of the nation through gainful use of the saved gas.
How do we take up this programme and also assure success? An inter-company committee will have to be setup while being co-chaired by the additional secretaries of the ministries of Water and Power and Petroleum and Natural Resources. This committee with members from Gencos, CPPA, SNGPL and SSGC (DG Gas of the Ministry of P&NR can also be co-opted) will be tasked to achieve the above listed savings in the least possible time and then duly monitored by the federal secretaries concerned.
It is considered that true implementation of the various steps would result in the saving of up- to 250 mmcfd of gas and it's provision to the power sector will result in a reduction in power tariff by at least 10-15% in 6-12 months of operation. This scheme needs full commitment and seriousness, otherwise the gains would not be of the envisaged volumes. However, it would set the ball rolling for the attainment of energy efficiency in the country.
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