Fuel paucity may severely hit power plant operations

ISLAMABAD: While ringing bells on shortage of fuel stocks, National Power Control Centre (NPCC) has cautioned the government that operations of power plants will cease if immediate measures are not taken to make required fuel available.

According to NPCC, as per merit order issued on April 1, 2022, power plants operation on alternate fuel, i.e., HSD, in case primary fuel is not available, becomes economical than certain RFO-operated power plants. Furthermore, generating units of Muzaffargarh (unit- 1, 2,3,5 & 6 at serial 98,99,88, 104& 108 of merit order, respectively) and Jamshoro (unit-1,2,3, &4 at serial 71, 97,85 & 78, respectively) are cheaper than Pakgen (economic merit order 114) and Saba (economic merit order -90).

In a letter to concerned authorities including Power Division and NEPRA, NPCC has said that in the current scenario demand has been given to Muzaffargarh unit-3 and Jamshoro unit-3(unit 01, and unit 04 are already in operation) as per prevailing merit order. However, Jamshoro unit 02 and Muzaffargarh unit 01, 02, 05, 06 and Kapco Block-III (HSD) are cheaper than Pakgen, but dispatch not given to them due to fuel inventory.

According to NPCC, HSD stock available at various IPPs and RFO stock at Gencos power plants is very low and sufficient only for two or three days’ operations. Subsequently, the plants operation will cease on account of non-availability of fuel if the stocks are not replenished.

This will aggravate the generation capability shortfall in addition to operation of relatively costly plants to bridge the gap between supply and demand and to avoid load management to the extent possible.

NPCC has requested Power Division to convey to concerned quarters to take necessary measures for maintaining sufficient HSD stock at various IPPs power plants and RFO-based Genco’s power plants on immediate basis so that system demand could be met economically and reliably in Ramazan and summer season.

Meanwhile, Director General Oil, in a letter to Secretary Power has drawn his attention towards the alarming high level of PSO’s receivables from power sectors entities.

NTDC has stated that high system load demand is persisting during the prevailing hot weather and ongoing Ramazan. Subsequently all available generation resources are being utilized as per Economic Merit Order to meet the system load requirement. The present RLNG allocation is only 550 MMCFD against power sector demand of 690 MMCFD for the month of April 2022, resulting in greater dependence on RFO-based generation. The present RFO stock at various Gencos & IPPS power plants is very low and the detail of RFO stock available as on April 4, 2022 were as follows: (i) Muzaffargarh (very critical); (ii) Saba (very critical ); (iii) Pakgen (very critical); (iv) Lalpir (very critical); (v) Jamshoro (critical); (vi) Kapco (critical);(vii) Nishat Chunian ( critical);(viii) Liberty Tech ( critical); and (ix) Hubco-Narowal(critical).

Receivables of PSO are posing a serious threat to supply chain of petroleum products including RLNG and furnace oil in the country.

Director General Oil further argued that the threat also has direct implications for the power sector. Moreover, as per previous trend, a surge in the demand of petroleum products is expected in the retail, as well as, power sector from April to June 2022, which will be difficult to fulfil (unless funds are paid to PSO to reduce the receivables).

PSO’s receivables from power sector stood at Rs 83.512 billion of which share of Gencos/ CPPA-G is Rs70.506 billion, Hub Power Company (Hubco) Rs 13 billion. However, after addition of Late Payment surcharge (LPS) of Rs 83.788 billion, receivables stood at Rs 167.3 billion.

Director General Oil has requested Power Division to ensure payment of at least Rs 25 billion out of outstanding to PSO on most immediate basis by April 15, 2022 so that the oil supplier could avoid default and continue smooth supply of energy products in the country.—MUSHTAQ GHUMMAN