Replacing inefficient power plants, converting to LNG: detailed plan to be submitted to PM

Ministry of Power is to submit a detailed plan to Prime Minister Shahid Khaqan Abbasi to replace inefficient thermal power plants and convert furnace oil-fired plants to Liquefied Natural Gas (LNG), well informed sources told Business Recorder. Last week the Prime Minister, who also holds the portfolio of Energy Minister, presided over a meeting on power sector issues. Secretary Power Division, Yousaf Naseem Khokhar could not attend the meeting as he was out of Pakistan.
Presently, the following are run on furnace oil: In the public sector (i) 1350 MW Mazaffargarh thermal power plant, (ii) 810 MW Jamshoro thermal power plant and (iii) 1000 MW old units of Guddu thermal power plant, whereas in private sector the plants are (i) AES Lalpir and (ii) AES Pak Gen. Efficiency of thermal plants is 38.2 per cent whereas efficiency of RLNG fired power plants is 58 per cent.
According to National Electric Power Regulatory Authority (Nepra), thermal power plants running on oil are increasing the current account deficit which is already a problem for the country. The import of oil is one of the main reasons for the current account deficit. Any strategy to cut current account deficit requires cutting down oil imports and for this it is essential to reduce electricity generation through oil.
An official, who attended the meeting, informed this correspondent that the Prime Minister directed the Power Division to replace low efficiency thermal power plants in phases. However, the ministry did not share any details of inefficient power plants during the meeting.
The Ministry of Energy (Power Division and Petroleum Division) has prepared an interim plan for conversion of 6052MW power plants-Gencos and IPPs-from furnace oil to LNG by the end of 2019.
According to an estimate, Pakistan could save $6-8 billion in four years by running Bhikki-type plant on RLNG in comparison to the current furnace oil-based power generation.
The Power Division is to prepare an interim plan in close co-ordination and consultation with Petroleum Division which is responsible for sharing data, facts and figures relating to LNG import, and pricing vis-à-vis furnace oil.
The Secretary Power Ministry told Business Recorder that his Ministry has prepared a report in co-ordination with the Petroleum Division, adding that it was a very complicated subject and until complete data is made available, it is very difficult to make any projection. Availability of gas and price are major issues.
"Should we factor in today''s LNG prices or in the three coming years? The future prices are only projections and they require complete simulation but Pakistan does not have the capacity to undertake such simulations. It will take a lot of discussions and deliberations and then a decision will be taken at the highest level as it will not be an easy decision," he added.
He further stated that there are several "known unknowns" like pricing, availability and infrastructure for availability of gas and its transportation, adding that it is too early to make any guess. He said debate is necessary on this issue even after the report is submitted to the CCoE.