Pakistan’s
National Electric Power Regulatory Authority (NEPRA) has released its annual
State of the Industry Report 2014 covering a detailed review of major segments
of the power chain. Highlighting pertinent issues in generation, transmission
and distribution and developments over the period, the report also prescribes
possible solutions to relieve ailing players of the sector.
Key
recommendations in the report include the diversion of gas to power generation,
LNG price and tariff to be set after analyzing all alternatives, technical
studies to assess the impact of new renewable energy plants on the national
grid, timely completion of coal based generation projects and decentralizing
the role of PEPCO and ministries. In addition, recent developments in the media
regarding the planned release of the 2015 Power Policy have renewed impetus for
promoting investment in the sector in the long run.
During the
period under review 105,733GwH of electricity were produced, registering an
increase of 6.7%YoY. Analysis reveals that diverting 150mmcfd to the four IPPs
currently operating on gas would allow them to operate on gas throughout the
year instead of HSD during the winter months. Gas supply deficit leaves the
room for RLNG fired power plants, NEPRA has advised for a thorough analysis of
alternatives before RLNG based power plants are setup.
Deterioration
in the efficiencies and generation levels of GENCO's (installed capacity of
4,829MW) is also a point of concern while GoP's initiatives to setup large coal
fired plants and invest in GENCO’s repairs and extensions are beneficial. However
the privatization process for these GENCO’s is already underway casting doubts
on the timing of these moves. IPP's have added 7% generation to the grid over
the year, with a capacity utilization averaging 77%.
Lack of
proper management aside, NEPRA has highlighted the need for T&D losses to
be curtailed by DISCOs, where they continued to disappoint as T&D losses still
hover slightly below 19%, while recoveries remained around 89% for FY14.
Moreover, NTDC has been criticized for not upgrading its systems to allow for
accommodating newly initiated power projects including planned hydro projects
in Dasu, Diamer Basha, and imported coal projects on coastal locations with
approximate costs of US$9 billion.
Projections
for future capacity additions to the grid and increase in demand show an
increase in the shortfall reaching 4,920MW by FY16, with a reduction in the
shortfall every year thereafter, leading to a surplus by FY20. In order to
tackle the situation, major recommendation in the report include 1) diversion
of gas to power generation, 2) LNG price and tariff to be set after analyzing
all alternatives, 3) technical studies to assess the impact of new renewable
energy plants on the national grid, 4) timely completion of coal based
generation projects and 5) decentralizing the role of PEPCO and ministries.
