Karachi Electric Supply Company (KESC) has stated that the supply of 650MWs from NTDC to KESC is its contractual right under a 5-year legally binding Power Purchase Agreement (PPA) until early 2015 and represents less than 5 percent of the capacity available with the National Grid.
The generation capacity of the National Grid is based on a mix of hydro, thermal, and nuclear plants developed over the years with significant contribution from Karachi, which is the economic hub of the country contributing 25 percent of the national GDP. Furthermore, curtailing 350 MW from NTDC's supply would arguably reduce load shedding by less than 30 minutes across the country, whilst its negative fall-out in Karachi would be several hours of enhanced load shed, something that the city can ill-afford given the precarious law & order situation.
KESC further stated that it has no 'idle' capacity to spare; and anyone familiar with power utility operations could understand that there is a vast difference between historical 'name plate' capacity of a generation plant and its current 'de-rated actual dependable capacity' with the latter being highly vulnerable to fuel supply issues and gas pressure availability which has been erratic at best. Likewise, as is the case with any other industrial machine, KESC's generating units also have to undergo regular scheduled preventive maintenance in line with manufacturers' recommendations.
Prudent Utility Practice also demands that KESC maintains a 'spinning reserve' of at least 200-300 MW to ensure the integrity and dependability of the system. KESC's power plants, like other plants in the rest of the country, have not been able to produce electricity at their optimum capacity because of the consistently reducing gas supply over the past several years, a fact verifiable from SSGC's supply charts. The current gas supply crisis at KESC's generation plants has reached a chronic level as it is being supplied only 120mmcfd of natural gas much against its total winter requirement of 250 mmcfd, leading to sub-optimal utilisation of its gas turbines. The key issues and impediments plaguing the power sector in the country are Circular Debt and the declining share of the power sector in the overall Gas allocation which need to be addressed by the Government on an immediate basis.
Unilaterally reducing its contractually binding 650 MW supply from the National Grid would be akin to penalising the privatised entity which has in the past three years invested over US $1 billion in generation, transmission, distribution and system improvement, in the form of equity and debt without any sovereign guarantee from the Government of Pakistan. This investment has translated into an incremental 1,000 MWs in KESC's generation capacity, including it's newly commissioned 560-MW state-of-the-art plant at Bin Qasim, which too is awaiting its committed 130mmcfd of additional gas supply.-PR