THURSDAY APRIL 11: Government mulling axing 'inefficient' captive power plants

ISLAMABAD: The government is considering getting rid of captive power plants which are using up 429 Million Cubic Feet per Day (MMCFD) of gas at just 27 percent efficiency, sources in the Ministry of Petroleum and Natural Resources told Business Recorder on Wednesday.
They said that a captive power plant produced just three megawatts of electricity with a million cubic feet of gas per day against more efficient power plants capable of producing between five and six megawatts of electricity with the same volume of natural gas.
"The country is facing serious power crisis and the government is trying to utilise all available means to overcome it: one of the available options is to stop gas supply to captive power plants because of their inefficiency. With utilisation of 429 MMCFD gas we can produce between 2,145 and 2,574 megawatts of electricity against 1,300 megawatts currently being produced by captive power plants," the official said.
The government is providing gas to industrial and power sectors at Rs 488.23 per MMBTU, while to CNG stations it was being sold at Rs 656 per MMBTU, commercial consumers were paying Rs 619 per MMBTU and the fertilizer sector Rs 123 per MMBTU. Source said: "Efficient use of gas in the power sector could reduce countrywide power load-shedding by at least 4 hours a day if we are distributing it among all the distribution companies. The government only allowed installation of captive power plants to help reduce energy woes of industrial units, but owing to inefficient use of the precious natural resources the country is losing about Rs 70 billion per annum".
The official stated that 429 MMCFD of gas currently being utilised by captive powers should be allocated to efficient power houses and the government should provide electricity to these industrial units instead of gas. By dedicating gas to efficient power plants the country would have up to 845 to 1,274 megawatts of electricity.
Currently, the Sui-Northern Gas Pipelines Limited (SNGPL) is providing 300 MMCFD of gas to Captive Power plants and 350 MMCFD to other power houses. The power generation efficiency/capacity of captive power plants is far below the target as these power plants are producing a total 900 MW of electricity by consuming 300 Mmcfd gas, the efficient use of 300 MMCFD gas could produce 1,800 megawatts of electricity, officials added. The current duration of power load-shedding could easily be reduced by two hours by allocating gas to efficient power plants, the official added.
On the system of Sui-Southern Gas Company Limited (SSGC), it is supplying around 200 MMCFD gas to power units of which 135 MMCFD is being supplied to Karachi Electricity Supply Corporation (KESC), and supplying 24 MMCFD to Habibullah Coastal power plant in Balochistan, 14 MMCFD to Kotri Power Plant and 20 MMCFD to Jamshro Power Plant.
SSGC was also supplying around 129 MMCFD gas to captive power plants of which 43 MMCFD was being supplied to textile industry based captive power plants and 86 MMCFD to captive power general power plants.
Currently, the country's total gas production is 4.3 Billion Cubic Feet (BCF) per day against a managed demand of 6 BCF. At present, the government was providing gas to 434 textile units with Captive Power Plants, generating about 680MW of power. However, this power was not added to the national grid.
Officials criticised the policy of gas provision to textile units and urged that the gas should instead be provided to four power plants in Lahore, which could work more efficiently and produce more power. The power produced by these power plants would be cheaper and would facilitate general public. There are 254 textile units, including spinning, weaving and composite entities with gas connection from the Sui Northern Gas Pipelines Limited (SNGPL) network for captive power generation. On the system of SNGPL average gas consumption of 254 captive power units is approximately 182MMCFD. The Planning Commission and Ministry of Water and Power had already termed captive power plants a drain on national resources.