Generating less than standard power: gas-fired thermal plants to be penalised

The government has decided to penalise gas-fired thermal power plants and captive power plants (CPPs) for generating less power by consuming gas over and above the international standards, official sources told Business Recorder. Minimum efficiency requirement for gas engine/turbine, based on cogeneration technology is 60 percent, whereas combined cycle above 50 MW is 50 percent. Energy efficiency audit would not apply to captive power plants of under 500 kilowatt capacity.
"Companies/CPPs not meeting the efficiency requirement criteria would be given three months to improve and achieve the desired benchmark. In case, they are not able to achieve the desired result after three months, companies/CPPs will be given grace period of another three months with the option to pay penalty equivalent to tariff over and above the tariff notified by Ogra, or face disconnection. The amount received by gas companies as penalty may be treated as operating income of the gas companies for prescribed price purposes," sources said.
The proposal, cleared by the Economic Co-ordination Committee (ECC) of the Cabinet in its meeting on November 11, 2011, also suggested that in case of failure in achieving the desired benchmark in six months, effective from the initial notice date, gas supply will be disconnected.
Guidelines for energy efficiency audit for power generation are as follows: (i) natural gas consumption/bills will be analysed against list of energy equipment and energy utilisation; (ii) energy equipment would also be analysed for their service, energy efficiency and their improvement as well as deterioration etc. Heat recovery equipments are required to meet minimum applicable international standards; (iii) analysis/evaluation of utilisation of waste heat from internal combustion gas engines/gas turbines; and (iv) efficient use of return condensate.
Procedure for conducting energy audit are as follows: (i) respective gas company would inform the CPP/company (auditee) seven days in advance in writing about the energy audit; (ii) the auditee would nominate responsible and competent staff to accompany the gas company auditor to conduct audit. The auditor will consult the auditee before initiating the audit for audit planning; (iii) the company (auditee) would provide unrestricted access to the facilities and relevant information as requested by the auditor; (iv) the company (auditee) would facilitate measurement and collection of data on as and when required basis; and (v) generally efficiency audit of every unit shall be done annually for determination of energy efficiency and shall be dealt with as per following instructions. However, if necessary, the gas company can also arrange audit other than schedule.
Sources said that the gap between demand and supply of natural gas is widening with the passage of time mainly due to depletion of existing resources, increase in unchecked demand by adding new consumers and disproportionate addition of new gas resources to the national grid. There is a need to provide this precious energy resource to only those consumers who make its optimal utilisation and to discourage its inefficient use.