The Water and Power Development Authority (Wapda) will pay $3.156 million per month, as rent, for 150 MW thermal power plant, which, according to Planning Commission, is not only expensive but also runs on low efficiency, official sources told Business Recorder here on Friday.
The Economic Co-ordination Committee (ECC) of the Cabinet had approved the proposal in its last meeting, subject to approval of tariff by National Electric Power Regulatory Authority (Nepra) and reprioritisation of gas allocation quota for the rented plant, sources said.
They said that 'G E Energy' has also offered another plant, of 100MW capacity, to be available in March/April 2007, and Wapda reserves the right for its acquisition, if required, at equal or lower rates, depending on the offered rates through competitive bidding.
According to details, Wapda had received two unsolicited proposals from Alstom Power Rental ('APR') through Associated Group and General Electric Energy (G E Energy) through bids invited in the press. The two unsolicited proposals were examined by Wapda and Northern Power Generation Company Limited (NPGCL), which approved the following, subject to ratification/approval of tariff by Nepra:
a) Arrangement of 150 MW Power Plant at NGPS, Multan, on rental basis from G E Energy at a tariff of 3.133 cents/kWh (excluding fuel cost) for 3 years at 92 percent availability [monthly rent of $3,156,111 inclusive of O & M charges] be finalised.
b) Wapda to reserve its right for acquisition of another plant of 100 MW offered by G E Energy, which can be available in March/April 2007, if required. This acquisition would be at equal or lower rates, depending on the offered rates through competitive bidding.
a. Proposal of Associated Group for deploying 100 MW plan, subject to matching its tariff with G E's tariff. Sources said that Wapda has informed that it had received no response on tendering process, and the Board of Directors of NPGCL advised the management to seek GoP's approval for allocating special gas quota for the rented plants.
Sources said that the rented plants are expensive. However, given the urgency to have additional power capacity before next summer as per Wapda's demand projections and the long gestation period, renting of plant/plants appears to be the only short-term solution if shortfalls are to be met. As regards the provision of natural gas, Wapda has been asked to reallocate natural gas quota from its existing plants. Further, as the commissioning of the new IPPs, for which gas has already been allocated, will take 2-3 years, practical arrangements be worked out with the Ministry of Petroleum and Natural Resources to utilise this gas for the rented plant in the intervening period. The gas requirement of these plants is about 30-35 MMCFD/150 MM plant at 60 percent load factor.
Sources said that the Ministry of Water and Power had recommended to ECC to allow renting of power plant/plants by Wapda/NPGCL as an emergency measure, subject to acceptance of tariff by Nepra, and added that Wapda should only rent as much power as is absolutely necessary and which would be utilised with high load factor for economic utilisation of capacity.
According to sources, Wapda would select the nearest possible location to the load centres of Gujranwala, Faisalabad or Lahore to install the plant. However, if it is necessary to locate the plant at Multan then it should be ensured that there are no transmission bottlenecks. The Planning Commission in its comments said that the proposed plant was expensive and had low efficiency. However, in view of anticipated high power shortages in the country, and to maintain economic momentum, the proposal may be agreed to.
The NPGCL has been directed to operate the plant factor so that overall cost per unit is reduced. Wapda has also been asked to increase liquidated damage (LD) from the proposed ratio of 1:1.25 to high factor to bind the bidder for highest availability, sources said.
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