EDITORIAL: It is heartening to note that Power Division and Nepra (National Electric Power Regulatory Authority) appear to be in sync on the need to transform Karachi into a fully load-shedding-free city by 2023. Surely, the absence of any opposition to supply of additional electricity from the National Transmission and Distribution Company (NTDC) grid to KE in order to help bridge the supply-demand gap is a positive development. It was a no brainer to divert surplus electricity from NTDC system to southern parts of Pakistan where the shortages are growing. Karachi is the largest export hub of the country and must have adequate energy availability to fuel industrial activity. Currently, the demand of the city is 2600-2700MW. Provision of 900-1000MW is national grid’s contribution to city’s overall requirement. KE has its own power generation of 1300-1400MW while some IPPs (Independent Power Producers) are providing 300-400MW. At peak of summer 2021, Karachi’s demand soared to 3650MW and KE was able to supply 3300-3400MW by stretching the inter-connectivity limit of KE grid to NTDC at 1200MW and maximizing its own and IPPs’ generation capacities.
The situation next year would be much better. KE’s new LNG plant of 900MW will be online (450MW to be operational next month and the remaining by summer) and on net-basis KE will supply 700-750MW as some of its old plants are to be decommissioned. Also by then around 225-250MW IPPs are likely to be decommissioned. Given at least 1100-1200MW supply from NTDC, KE is likely to be in a position to deal with the peak summers of 2022 and 2023 quite comfortably. It is important to note that power situation has improved remarkably in the last decade - from less than a quarter of Karachi load management-free to three quarters by now. This is only possible by reducing the AT&C (Aggregate Technical and Commercial) losses. The plan is to take Karachi to 95 percent load-shedding and load management free. For that, KE must work further on reducing such losses.
However, reducing losses is not enough to transform Karachi into a load-shedding-free city. The demand is growing every year. The supply needs to match it. That is why having additional supply from NTDC is imperative. Or else, KE should be setting up its own additional plants. The supply from NTDC is constrained by inter-connectivity capacity that cannot take or carry load beyond 1100-1200MW. This must increase to at least 2000MW. For it, two new inter-connections are in the process of being made and an inter-connection agreement is expected to be finalized between NTDC and KE soon. Once this is done, Karachi technically can meet its demand by 2025-26. And with NTDC surplus, the supply is most likely to be ensured. However, beyond 2025-26, there is a fair chance that growing countrywide demand may force NTDC to cut its supply to KE as was the case in 2010s when the national grid was not supplying the agreed (at that time) 650MW to KE due to increased demand in the north.
KE seeks to initial a PPA (Power Purchase Agreement) with CPPA-G (Central Power Purchasing Authority—Guaranteed) to ensure guaranteed supply from NTDC to KE beyond 2025-26. They had plans of three plants (apart from the LNG plant coming online this year) of total 1500MW – two coal plants (700MW and 350MW and another plant of 450MW on LNG). It is important to point out that KE can rely on supply from NTDC so long the latter is having power in excess. Karachi cannot be turned into a load-shedding-free metropolis by 2025-26 and beyond without ensuring the supply of 2000MW from NTDC to KE. Therefore, the need for a fool-proof PPA cannot be over-emphasized.
Copyright Business Recorder, 2021