ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has raised question marks on the performance of K-Electric, saying that power utility kept its power plant “intentionally underutilized and undertook unauthorized load shedding.”
The regulator, in its “State of industry report 2019,” said that a review of last three years shows that KE has underutilized its power plants although the issue had been taken up by the Authority with KE in the past. It is noted that KE is still continuing its policy about not supplying electricity to its certain categories of consumers, in spite of the fact that some of its own generation plants were intentionally underutilized.
While analyzing the available information it noted that the utility is “subjecting its consumers to undue and unauthorized load shedding by underutilizing its owned generation capacity.” As per submissions of KE, the company faced gas (fuel) and outage (scheduled, forced and maintenance) constraints throughout three years for all the power plants. The fuel availability is the power producer’s responsibility and KE is required to have Fuel Supply Agreements (FSA) urgently to overcome these issues. Nepra has noted that underutilization of plants even caused by non-availability of fuel ultimately impacts the electricity tariff of end consumer. Another main cause of underutilization of efficient power plants could be transmission system constraints existing in KE’s transmission network, such as overloading of transmission lines, insufficient transformation capacity, outages of transmission lines due to tripping, faulty transformers etc. Under applicable documents, KE is responsible for evacuation of power from power plants, which are supplying electricity in KE system. Non-evacuation of electricity that can be generated through cheaper power plants is a failure of KE.
The regulator has “noted” that a number of engines of KGTPS and SGTPS have completed 30,000 operating hours since last MOH. However, the maintenance of said engines is still pending. Overall the performances of KE’s own power plants for last three years is inferior as compared to allowed targets set by the Authority in respect of heat rate/ efficiency and auxiliary consumption, despite the fact that reasonable O&M had been allowed to KE under Multi Year Tariff.
The installed capacity of KE’s own generation fleet during FY 2018-19 has been noted as 2,294 MW same as in FY 2017-18. Since KE is responsible for maintaining integrated systems of generation, transmission and distribution, therefore KE is required to look for other sources to meet the supply and demand gap. Inability of KE to effectively increase its generation capacity has made it dependent on external power sources, including the import from NTDC system. During FY 2018-19, in addition to purchasing power from IPPs /CPPs including Gul Ahmed, Tapal Energy, KANUPP, Anoud Power, International Steel Limited, International Industries Limited, FFBL Power, SNPCL and Oursun Pakistan, KE also imported around 650 MW from NTDC system whereas agreement for purchasing electricity from three wind power plants of 150 MW has also been signed with NTDC. KE generated 10,727 GWh during FY 2018-19 that is an increase of 389 GWh over last year. In addition to its own generation, KE imported 7,769 GWh to meet its increasing demand. It is noted that the performance of KE’s own power plants are un-satisfactory for last year as compared to allowed targets set by the Authority in respect of heat rate/efficiency and auxiliary consumption despite that reasonable O&M had been allowed to KE under MYT. The deteriorated performance of KE plants may be due to the reason that major overhauling of some units/machines was not carried out on timely basis. Historical record shows that KE “underutilized” its power plants whereas it continued to carry out load shedding. KE has reported that the reasons for the low capacity factors of KE power plants are supply and gas pressure issues. Since the fuel availability is KE’s responsibility therefore it cannot be absolved of the negative impact such underutilization can cause on consumer end tariff. In addition, power plants of KE remained on standby mode for a significant period, during FY 2018-19, wasting the potential to generate a significant amount of economical energy whereas adding to non-productive energy during standby mode in the form of auxiliary power consumption resulting in financial loss.
Nepra has recommended that to reduce the impact of idle capacity on the overall tariff, the Federal Government should carry out a thorough analysis of any requirement for the import of additional power by K-Electric from NTDC system. NEPRA considers that it will be in the interest of the overall system, as it will help improve the utilization of power plants, reduce excess capacity itself and provide continuity of power supply to K-Electric consumers in the short to medium term.—MUSHTAQ GHUMMAN