The regulatory authority, NEPRA, has already determined electricity tariff for these projects. These oil-based projects on diesel-engine technology were to achieve the COD by October 2008. The sponsors could implement none of these projects in time and now these are re-scheduled for commissioning during March-December 2010, if at all these see light of the day.
The other sponsors, showing non-serious attitude, have either shelved their projects at a belated stage or transformed those from fast track to conventional projects under the Policy framework.
Similar has been the situation with the windfarm power generation. A number of LOIs have been issued by the government for establishing wind farms of 50 MW each in Sindh for the last many years, but not a single project has taken off. Meanwhile, the investors managed the formulation and announcement of an attractive Renewable Energy Policy, almost dictating their own terms and conditions. The up-front tariff of Cents 9.5 per kWh levelised over the term of project was offered in April 2006.
The prospective investors however were not satisfied, asked for higher tariff and were finally granted Cents 10.2852 and Cents 10.4754 per unit. Due to inordinate delay in execution of these projects, only 150 MW is expected to be added by 2008 to the present installed capacity. The projects in advanced stage are New Park Energy, Green Power and Win-Power having recently obtained generation license from NEPRA.
The plan to augment power generation capacity through the public sector is being pursued by the government in parallel. WAPDA's two thermal power plants acquired on rental basis are already operational. These plants, which use natural gas out of allocations available with the WAPDA, include a 150-MW rental plant located at Lahore and another 136-MW capacity plant at Bhikki that was inaugurated in December 2007.
Another 100-MW power plant is being installed on lease/rental basis at Guddu power station, which will be operational in last quarter of 2008. WAPDA is currently being restructured, with the ultimate goal of privatising all its thermal power stations, and its Power Wing and corporate entities are now placed under the management of PEPCO. This was not the opportune time for the restructuring that has created various administrative, human resource and financial problems both for WAPDA and PEPCO, and the situation is likely to affect operations and efficiency of the two organisations for sometime, hampering the progress of on-going projects. Nonetheless, PEPCO has taken measures to improve power supply position.
PEPCO plans to implement rehabilitation of its existing thermal power stations on fast track basis, aiming to recover lost output estimated to be around 300 MW. Instructions have already been given to the thermal power generation companies (GENCOs) to undertake immediate repairs at Guddu and Jamshoro power stations and to improve plant efficiency. It has also been decided to replace the old power plant at Guddu with the advanced and efficient power generation units of 800 MW capacity.
Malakand-III hydropower project of 81 MW capacity constructed by the Government of the NWFP has been commissioned and will generate power by January 2008. However, WAPDA's on-going hydel power projects, namely Duber Khwar, Allai Khwar and Khan Khwar, of an aggregate capacity of 323 MW, have run into snags, once again, as the financing agency (Abu Dhabi Fund for Development) has cancelled the $272 million agreement, and thus completion would be further delayed.
Only the 72-MW capacity Khan Khwar project is likely to be completed by October 2008. Mangla Dam Raising project has also been delayed due to contractor's inefficiency and mismanagement, and is now due for completion by June 2008. The project is expected to add about 180 MW power generation to the installed capacity.
WAPDA's coal-fired Lakhra power plant of total 150 MW installed capacity, which was giving only 23 MW output till recently, has been leased out to a private company. The private company is committed to rehabilitate and revamp the power station on fast track and to generate 100 MW of electricity by September 2008, thereby increasing power generation to full installed capacity in the following year.
Import of electricity from Iran will continue to the level of 1,000 MW, while PEPCO system will shortly have an additional 100 MW in its network through purchase from small power producers like textile mills. Furthermore, PEPCO has launched an effective public awareness campaign and enforcement of energy conservation measures. These demand side measures are expected to save more than 500 MW.
Strengthening and widening of the electricity transmission and distribution systems remain the sole responsibility of WAPDA/PEPCO (excluding KESC system). Accordingly, major revamping, modernisation and expansion of PEPCO's existing transmission and distribution network is currently being undertaken, ensuring dispersal of additional power generated in near future. Asian Development Bank has extended a loan amounting to US $1,450 million for the purpose, to be utilised for transmission/distribution schemes undertaken during the period 2007-2016.
The power scenario of Karachi is complex and different from the rest of the country. The demand for electricity in the metropolis is growing at a fast pace but there seems to be no respite to the residents, businessmen and industrialists in near future due to a number of factors. First, KESC's transmission and distribution system is not capable of taking any additional load, and not much has been done so far to invest in rehabilitating and strengthening the network.
Second, KESC has failed to achieve major physical progress on implementation of its generation capacity expansion plan announced after the take-over. Currently, work on capacity expansion of Korangi thermal power station is in progress and additional 220 MW electricity is expected to be generated by March 2008.
The government has allocated, in June 2007, additional 21-mmcfd gas for 100 MW power generation through rental power plant. However, KESC has not yet firmed up arrangements for establishing power plant on rental basis that is the immediate solution to create additional capacity. To date, WAPDA remains obliged to "export" 700 MW bulk electricity to the KESC system on a regular basis.
To summarise, optimally an additional capability of around 2,000 MW will be available to the national grid, progressively, during January-December 2008 that would partially offset the growing demand for electricity during the year. The redeeming factor is that though the measures would not bring in significant improvement in the power system in 2008 the power crisis is not likely to worsen either.
As for the future, four IPPs of cumulative capacity of 775 MW, all gas-fuelled, are scheduled to go into operation, if everything goes well, during July-December 2009. These are Sapphire Group's 225-MW project at Muridke (Punjab) for which construction has begun, Fauji Foundation's 175-MW on-going project at Mari (Sindh), Halmore's 225-MW project at Bhikki (Punjab) and Engro Group's 150-MW project at Daharki (Sindh). The dispersal of power from all these projects was originally scheduled by 2007-08, whereas financial close for the last two projects is still awaited. A few of the so-called fast-track projects may also come up.
WAPDA's on-going hydel power projects are re-scheduled for completion by 2009. PEPCO will set up two thermal power stations at Nandipur (Gujranwala) and Chichoki Mallian (Sheikhupura), each of 400-500 MW capacity, which are scheduled to go into production by 2009. Originally, the Chichoki Mallian project was scheduled to go into operation in 2008 for which WAPDA had finalised contract sometime in February 2007.
The government then decided to transfer the project to a selected foreign investor who has abandoned the project recently and it is now being reverted to the public sector for implementation. This week PEPCO has issued Letter of Acceptance to the Chinese bidders for award of contract for Chichoki Mallian project.
(Concluded)
(The writer is former Chairman of Heavy Mechanical Complex (Pvt) Ltd, Taxila and other state-owned engineering companies, and is currently Director of Private Power and Infrastructure Board (PPIB) of the Ministry of Water and Power.)
Comments
Comments are closed.