Apr 282008

Industrial zones are emerging as sources of cheap electric supply to Wapda and KESC with a potential believed to be enough to meet up to 20 per cent of power shortages.

‘’Way back in 2006, we indicated textile sector’s potential of providing 450 megawatt electricity to Wapda on fast track, ‘’ disclosed Shafqat Elahi, a leader of All Pakistan Textile Mills Association (APTMA) on Thursday from Lahore.

Shafqat has himself concluded agreement with Wapda in 2006 to supply electricity from furnace oil-run generators at Rs1.26 plus the cost of fuel per unit. “It is not even three cents a unit, ‘’ he said comparing it with the tariff being given by Wapda to the private IPPs.

The power shortage in Wapda-fed area is said to be 2,500 megawatt while the chief executive of the privatised Karachi Electric Supply Corporation, Lt. general (rtd) S.M. Amjad has put it at 250 megawatt in Karachi provided Wapda continues to export 500 megawatt. Availability of electric power from captive power plants in industrial units in and around Karachi can reduce KESC’s dependence on Wapda.

‘’In Lahore, textile units supply 16 megawatt power to Lahore Electric Supply Company (LESCO) and the supply of captive power plants in Multan and Faisalabad to their respective power distribution companies is far better, Mr Elahi disclosed.

Estimates on availability of electricity from the captive power plants in textile factories in Punjab and Sindh differ.

But Mr Iqbal Ibrahim, chairman APTMA informed Dawn on telephone that he was “confident of getting 1,000 megawatt electricity for Wapda and KESC from industrial units”.

Textile units have surplus power generation capacities for two reasons. First, textile units invested substantially on installation of furnace oil-run power generators when they started facing frequent power outages. Later, they switched over to gas-run plants after finding these to be relatively cost-effective, economical and less noisy. But as textile business is now facing hard times and export going sluggish, even the gas-run electricity generators are not being operated at optimum capacity.

‘’We need to get a no-objection certificate from the gas company to supply electricity from gas-run plant to any distribution company”, Mr Iqbal Ibrahim said.

Early this month, the government organised a meeting of textile industry leaders with officials of the federal ministry of petroleum, natural resources, water and power ministries so that matters related to government agencies are resolved.

Shafqat Elahi came to Karachi on Tuesday last to attend a meeting in Chief Secretary’s office where the KESC’s chief executive and local business leaders were present. The possibility of getting electricity from captive power plants in textile units was explored. Instantly, 17 megawatt electricity was offered. The KESC chief is reported to have indicated Rs1.40 plus the fuel cost per unit.

‘’ Whatever it is, the tariff we are asking from KESC is much less than what the utilities are paying to the IPPs”, Iqbal Ibrahim said and explained that they will have to employ engineers and technicians to run these generators and would pay them from income they will get from the KESC. ‘’Our power bills will enable us to service our bank debts and keep business running in these hard times”.

The government has also been advised to get power from sugar plants which are closed till the cane crushing starts next October or November. ‘’Once the government gives a go ahead signal, we can ask all industrial associations to make assessment of availability of power from captive power plants in their respective zones”, said Zubair Motiwala. A cement factory in Nowshera in NWFP is said to have offered 18 megawatt of electricity.

“There are now a lot of procedural hurdles” Shafqat Elahi said while explaining as to why the two utilities-Wapda and the KESC—are not going for quick agreements. The sales tax has to be zero-rated and then there are income tax issues. Mr Elahi will meet with the officials of Central Board of Revenue soon to sort out these issues.

‘’Wapda is quick to recover its electric bills from us and gives no grace time to make payment of our power bills”, complained an owner of a captive power unit. ‘’Because we offer electric power to Wapda at the cheapest rate, we are last to be paid” remarked Shafqat Elahi.

While the KESC gives the impression of waiting for government notification to charge extra fuel adjustment surcharge after increase in international oil price, the Chairman of SITE Association of Industry Mr Nisar Sheikhani said that it is already included in recent bills. The KESC has increased FAC by 84 per cent. The KESC says it is issuing a minimum bill to the industrial units which are consuming less than allocated installed power.

Mr Sheikhani is making out a case to present it to the government. The KESC says it’s fuel bill in last nine months has swelled to Rs25.2 billion from Rs20.7 billion for the same period of 2006-07. The gas bill is up to Rs14 billion from Rs11.6 billion.

In an interview on Wednesday, general (retd) S.M.Amjad gave a resume of how the Rs13.6 billion given by government to upgrade transmission and distribution is being spent. In addition, he claimed the KESC investors are also investing some money on improving the system.

‘’The transmission and distribution system of KESC is far more resilient now than what it was in the previous year”, he asserted and pointed out if in the last summer, the average power outage was eight hours a day included four hours of breakdown of the system, this has now been brought down to an average of two hours. The half yearly balance sheet of KESC from July to December 2007 says that transmission and distribution losses have been brought down to 31.4 from 34 per cent last year.

The KESC’s plan to increase power generation has run into snags right from 2006 when it was privatised. Immediately, after privatisation, its operational and management partner went for a reconditioned power plant installation in collaboration with an Italian company. It had some problems with the Italian company and the project was abandoned. In early June last year, the ADB signed an agreement of $150 million for another big project at Port Qasim. Even after more than a year, no agreement has been signed. The chief executive hopes to sign this agreement soon.

The previous chief executive, a German, signed an agreement for 220 megawatt project. The first phase of this project will come on line in next few months with commencement of an 80 megawatt power generation station.

Source: Daily Dawn, 28/4/2008

 Posted by at 4:59 pm

  One Response to “Surplus and shortage in power generation – By Sabihuddin Ghausi”

  1. sabihuddin ghausi images/pictures

Leave a Reply

en English
%d bloggers like this: