The Power Division is to submit Power Purchase Agreements (PPAs) of all power projects and details of financial implications involved in running of certain power plants out of merit order due to system constraints to the Cabinet Committee on Energy (CCoE) on Wednesday (tomorrow). To be presided over by Minister for Petroleum and Natural Resources, Ghulam Sarwar Khan, the meeting is also expected to discuss an inquiry report against Managing Directors of SNGPL and SSGCL, prepared by a committee headed by Chairperson OGRA.
Power plants are operated on the basis of dispatch merit order which is approved by the committee under the chairmanship of General Manager(SO), NPCC, (convener) comprising General Manager (PSP), NTDC, Chief Technical Officer, CPPA-G, Chief Financial Officer, CPPA-G and Chief Technical Officer, GHPL. The revision of merit order for operation of power plants is done fortnightly under standard operating procedure.
According to the procedure, CPPA-G intimates the revised applicable fuel prices and variable O&M cost, based on Nepra tariff, fortnightly in respect of Gencos and IPPs (thermal Power Plants). NPCC consolidates/ prepares the revised merit order and places it before the committee for consideration. After approval, merit order is notified and uploaded on NTDC website.
The sources said hydel, wind, solar, baggase and nuclear are "must run generation plants". Merit order is determined for power plants (based on gas/coal/FRO/RLNG/HSD/ mix fuel), on the basis of their cost per kilowatt. Merit order list of 130 power plants based on revised fuel prices effective from November 23, 2018, was presented in the last meeting of CCoE.
Power Division claims that merit order is not being followed for certain power plants because of: (i) maintaining adequate operative reserve (i.e. reactive and active) for voltage & frequency regulation; (ii) generation and transmission facility outages coordination; (iii) NTDC transmission and transformation congestion management and contingency event management; and (iv) minimum load shedding in order to protect equipment and maintain supplies to majority of consumers.
The power plants which are being operated out of merit order are Attock Generation Limited, Saba Power, KEL, Atlast Chnian, Nishat Power Lalpir, Liberty Power Tech and Hubco Narowal, Hubco Power Plant, Power Plant at Port Qasim and RLNG plants. Power Division will submit a report to CCoE regarding financial implications involved in running of certain power plants out of merit order due to system constraints. The CCoE meeting held on November 28, 2018, observed that there is a dire need to improve methodology for determination of merit order for power plants so that maximum utilization of all plants should be ensured. It was suggested that existing policy for renewable power plants should be revised to make it attractive for perspective investors towards installation of new renewable plants in the country.
At present, total number of power plants in the country is 1,077 with installed capacity of 33,006 MW. The existing transmission system lacks capacity to evacuate electricity from new power plants. Moreover, there is no transmission line for transmitting power from renewable power plants (solar/wind).
The sources said, provincial governments issued a number of Letters of Intent (LoI) for establishment of renewable power plants without considering non availability of transmission lines on the sites of the proposed plants. It was further pointed out that the prices of the equipment required for establishment of solar/wind power plants have been reduced considerably in the international market, therefore, prices of per unit cost of electricity generated through these plants have also been reduced significantly. These plants would be more beneficial to Pakistan's system, because of cheap price as well as saving substantial foreign exchange on import of costly fuel for power plants. The meeting was also updated on plant availability factor of power plants.
The meeting had observed that the Financial Close (FC) of a number of new power plants projects has not yet been achieved; therefore these plants cannot realize their Commercial Operational Date (COD) on their given timelines. The CCoE directed Power Division to submit a report about the status of Financial Close in respect of all new power plant projects in its next meeting for consideration. It was directed that Power Purchase Agreements (PPAs) of all Power Projects may be presented to the CCoE.
The sources said utilization of Furnace Oil (FO) in power plants has been reduced considerably due to its higher cost. It was stated that local refineries are producing FO @ 10,000 MT per day. At present, total stock of FO available with refineries/PSO/power plants is 604,000 MT. The CCoE observed that despite availability of substantial stock of FO and its local production why it is being imported for which substantial foreign exchange is being spent. It was stated that currently, K-Electric is using FO to run some plants for generation of power. The CCoE directed Power Division to submit details about the import of furnace oil by the K-Electric to CCoE.
The meeting was further apprised that average RLNG demand for November 2018 was 820MMCFD against allocated RLNG 803MMCFD. However, average consumption against the allocation was 287MMCFO which is quite low against their allocated RLNG. This warrants that Power Division may give firm demand for RLNG power plants, so as to import the quantity accordingly. Power Division informed the meeting that the demand for RLNG for December 2018 and January 2019 would be 780MMCFD and 680MMCFD, respectively.
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