Transcript Slide 1

IMPLICATIONS OF RENTAL POWER PROJECTS
FOR PAKISTAN
By Mian Muhammad Zulqarnain AAMIR DMG
91st National Management Course
6th
Oct 09
Dr Imtiaz Bokhari
Sponsoring
DS
1
 Talk of the Town
 Energy crises-Historical perspective
Sequence
 Power Scenario-Today
 Power production-Made easy
 PMLN & PPP
 Analysis
 Conclusions
 Recommendations
2
Talk of the Town
Hue & Cry
Screaming &
Shouting
3
Historical Perspective
“Policy makers have a tendency to act in the field of Energy
during extreme crises when serious shortage appears.”
Soon after 1947
Energy CrisesA Historical
Perspective
India switched off Power to Lahore.
Warsak Dam and few others on
Canals in Punjab emerge as a result.
Terbela & Mangla were proposed viable & economical when Oil was
selling at $3 a barrel. Hydel:Others::80:20 Source: www.wtrg.com/prices.htm
Power Policy 1994
Result of economic growth of
eighties due to the US$ Afghan war
brought. Huge incentives; electric
Results. Tilt away from Hydel.
Power Policy 1998
Blurred Vision and Approach.
Power Policy 2002
Enhanced growth due to inflow of
US$ as result of “U turn” under
BUSH Doctrine “With us or Against
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us”
Historical Perspective
“Not a single unit of power was added in the last regime or
why the generation capacity was not increased to keep up
with demand”
Energy CrisesA Historical
Perspective
Pre 1994 era
Shortage of up to 2000MW
1994 Power Policy incentive:
Capacity Payment.
Government paid the investors 60 percent of the capacity irrespective of use,
6.1 cents/KWh upfront tariff.
2001-2003
3000 MW surplus with all
financial implications. WAPDA
went RED.
Power, once generated, cannot be stored; it has to be consumed. Attempt
to sell to India failed due to 2002 stand-off.
2003-04
Power demand
Growth 7.3%.
3%
6%
9%
Break even reached in 2005 instead of projected 2007.
50 new power projects totaling 12,141 MW launched from Feb 2004 to June
2007. Operation from Oct 2008 to Dec 2015. Ghazi Barotha Dam 1450 MW
5
Total Capacity
Dependable
Generation
Peak Demand
7000
17529 MW
16192 MW
12551 MW
15663 MW
6444
6097
6000
5525
4675
5000
Power
Scenario
Today
Installed
Dependable
C.Generation
3910
4000
j
3000
2000
1000
285 285
0
Hydro
Genco
IPP
RPP
Source: MD Pepco Presentation to BOI Nov19,2007 & Minister's presentation to the cabinet July 2009
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Power Scenario Today
Power Production Technologies
1%
2%
30%
Power
Scenario
Today
41%
26%
F.oil
Hydro
Gas
Nuclear
Coal
7
Source: Associated Consultant engineers
9000
6500
5800
450
150 MW
Power Scenario Today
Power Production Technologies-World Averages
2%
16%
41%
Power
Scenario
Today
20%
6%
15%
F.oil
Hydro
Gas
Nuclear
Coal
Other
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Source: PEPCO
Power Scenario Today
Consumption Patterns-Non Productive
14%
6%
47%
Power
Scenario
Today
26%
7%
Domestic
Commercial
Industrial
Average Industrial
Consumption
World 42%China 80%
Agriculture
Other
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Source: PEPCO
Power Scenario Today
Load shedding
Power rationing
OR
Fuel rationing
Source: PEPCO
10
Power Scenario Today
Shortage
Wrongly
Perceived
Source: PEPCO
11
Rental Power Plants
An RPP is a moveable structure consisting of Large
generators which may be hooked with Distribution or
Transmission of national Grid. They produce power
anywhere between 50 to 200 MW.
Power
Production
Made easy
Independent Power Producer
An IPP is an independently owned company with
electricity generating assets (power plants). The company
generates power which is purchased by an electric grid
operator or a large industrial consumer.
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Power Production-Made easy
IPPs
RPPs
2-5 years
< one year
Electricity cost
11.77 cents/Kwh
14.65 / Kwh (24% exp)
Cost of 100Mw
New $100 million
Used $15 million (China)
Mobilization Adv
Nil
14% of 3-5yrs rent
P. Guarantee
Yes
Mostly NO
Efficiency
45%
37 %
Based on Project cost
N/A
Required
Not required
Brand New
< 10 yrs old Refurbished
Set up time
Facts And
Figures
Tariff
Disclosure of cost
Equipment
& < 60000 hrs
Environmental cost
Low
High
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The News-Tuesday, August 11, 2009 “FEDERAL Minister for Water
and Power Raja Parvez Ashraf has angrily rejected allegations of
corruption and kickbacks involving rental power projects in
Pakistan and claimed he is prepared to be hanged if any of the
allegations are proved”.
14% Advance.
Original 7%. Unprecedented government facility was not
made public when the PPIB sought letter of interests.
6% withholding tax deferment.
Power Means
Leakage
Nationwide
Additional Burden on Import Bill.
Pakistan would be forced to pay US $9.6 billion for oil
import next year, if oil stays at US $60 per barrel.
Pressure on Local Banks to Fund the Project.
RPPs generally funded by International financial
institutions. In this case only Turkish company is
funded internationally.
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Pakistan
Power
Puzzle
15
Analysis
Import Bill
Uncertain due to Fluctuating Oil prices
Higher Energy cost for Consumers
Implications
for Pakistan
Expensive units
Negative Growth
Decreased export
Blurred Future
Hurriedly conceived – 3-5 Years life span
Environmental Compromise
No Environmental Impact Assessment
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Analysis
Annual Fuel payment for a typical 200 MW unit
RPP
IPP
= $211 million
= $174 million
A difference of $37 million a year or Rs 3 billion a year per RPP.
Annual capacity payment for a typical 200 MW
Points to
Ponder
RPP
IPP
= $79 million
= $60 million
A difference of $19 million a year or Rs1.5 billion a year per RPP.
Annual Payments for 1,900 MW of Rental Power
Fuel
= $2 billion
Capacity = $750 million
RPPs:
A US$ 2.75 Billion question a year
Suo Moto ….?????.....Steel Mills…….
Source: Pepco, Dr. Farrukh Saleem, Director of the Centre for Research and Security Studies
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Analysis
15,900 MW of electricity in December 2009
against a projected peak demand of around
16,064 MW in summer next year without RPPs.
Source: Pepco,PPIB websites
Hurriedly
Conceived
Power projects completed by the end of 2009
would add 3,500 MW to the national grid, about
2,000 MW more than domestic consumption.
Source: Pepco,PPIB websites
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Analysis
PEPA 1997 Section 12
Initial Environmental Examination and
Environmental Impact Assessment
NO EIA
(1) No proponent of a project shall
commence construction or operation
unless he has filed with the Federal
Agency
an
initial
environmental
examination or, where the project is likely
to cause an adverse environmental effect,
an environmental impact assessment,
and has obtained from the Federal
Agency approval in respect thereof.
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Conclusion
Implications
Degradation of environment
Increase in Import Bill
Additional burden on consumer
Stop-Gap arrangements
Criminal neglect by Leadership
Recap
Shifting from hydro to thermal, low to high cost
High claims-Low performance
Nuclear, Coal, Renewable
Sufficient installed capacity
Warrants no more RPPs
Ineffective Power administration
About 30% energy lost /stolen
Burden on law abiding citizens
Ignorance towards energy conservation
Use of inefficient electrical equipment
Decoration /showoff
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Recommendations
Government may put into operation shutdown IPP
plants to obtain 390 MW.
Around 500 MW can be plugged into the national
grid from captive power plants installed in textile,
cement and sugar mills etc.
Simple
Solutions
Sugar mills should get soft loans to install high
pressure boiler plants for producing 1000 MW.
Reduction in line losses and theft by 10-12% may
save energy around 1500MW. Current losses 30%.
Promotion of use of Energy Savers (CFL) and Light
Emitting Diodes (LED) lighting in household. EU has
already banned incandescent light bulbs of 60&100Watts
from Sep1, 2009 and so has Canada.
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Recommendations
Install LED Street lights and Traffic signals (Mean
Time Between Failures MTBF 10,000hrs) to save 80%
electricity.
Simple
Solutions
Make installation of affordable solar water heaters
mandatory to free large quantity of gas for generation.
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Recommendations
Pakistan should go for renewable energy sources:
 Hydel Power
 Wind Power
 Solar Thermal Power
 Small Hydro Plants
 Thermal Power Plants using
Simple
Solutions
rice husk ,waste wood, municipal waste
or agriculture residue as fuel.
The Long Term Credit Fund administered by the
National Bank of Pakistan may be upgraded into an
energy and infrastructure bank, possibly on the pattern of
India’s Infrastructure Development Finance Company Limited.
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Recommendations
Nutshell
CARA
 Conservation
Demand side management through conservation
of power
 Acceleration
IPPs currently in the finishing stage
 Reactivation
Already installed power generation capacity
 Accommodation
Captive and SPPs into main energy buying orbit
To bridge Pakistan’s electricity supply and demand gap.
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Q& A
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Existing Generating Capacity - 2007
Type
Installed
(MW)
Derated /
Dependa
ble (MW)
Current Availability (MW)
Summer
Demand
2007 (MW)
Winter
Hydro
6,444
6,444
6,444
100
%
2,300
36%
Gencos
4,675
3,910
2,525
65%
3,620
93%
IPPs
6,097
5,525
3,936
71%
5,180
94%
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28
28
100
%
28
100%
285
285
285
100
%
285
100%
SPPs
RENTAL
Total
17,529
16,192 13,218 82% 11,413
70%
15,838
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Hydro Power Plants
Sr. No.
Power Plants
Installed
Capacity (MW)
Derated /
Dependable
Capacity
(MW)
Current
Availability
(MW)
1
Tarbela
3478
3478
3478
2
Ghazi Barotha
1450
1450
1450
3
Mangla
1000
1000
1000
4
Warsak
243
243
243
5
Chashma
184
184
184
6
Rasul
22
7
Dargai
20
8
Nandipur
13.80
9
Shadiwal
13.50
10
Chichoki
13.20
32
32
11
Kurram Garhi
12
Renala
1.10
13
Chitral
1
6444
6444
89
4
TOTAL
6444
*Jabban (Malakand) Hydel Power Station has been de-commissioned due to fire incident on 12.11.2006
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and will be re-commissioned after rehabilitation.
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Thermal Power Plants
Sr.
No.
Power Plants
Installed
Capacity
(MW)
Derated/
Dependable
Capacity
(MW)
Current
Availability
(MW)
1
Thermal Power Station Jamshoro
850
765
485
2
FBC Lakhra Power Station
50
28
32
3
Gas Turbine Power Station Kotri
174
140
54
4
Thermal Power Station Guddu
1655
1285
841
5
Thermal Power Station Quetta
35
22
0*
6
Thermal Power Station Muzaffargarh
1350
1260
795
7
Natural Gas Power Station
Piranghaib Multan
130
60
80
8
Steam Power Station Faisalabad
132
100
92
9
Gas Trubine Power Station
Faisalabad
244
210
146
10
Gas Turbine Power Station Shahdara
55
40
0*
4675
3910
2525
TOTAL
Note:-
WAPDA all steam units are duel fuel based (Gas & Furnace Oil), except Unit No.1 of TPS
Jamshoro which is oil based. Whereas Gas Turbines are operated on Gas.
* Would be available after March 15, 2008 on Gas restoration.
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28
Thermal IPPs
Current
Availability
(MW)
1292
Derated/
Dependable
Capacity
(MW)
1200
GAS
1638
131
362
365
117
140
1386
124
350
350
103
129
1164
107
340
0*
95
125
GAS
(CONVERTED)
450
395
0*
SABA POWER CO.
RFO
134
125
0*
10
FAUJI KABIRWALA
Gas (Low
BTU+Pipe Line)
157
151
77
11
12
13
14
15
JAPAN POWER GEN.
UCH POWER PROJECT
Liberty Power
Chashnupp
Jagran
RFO
135
586
235
325
30
120
551
211
300
30
103
555
207
259
7
6097
5525
3936
Sr.
No.
Power Plants
Fuel
Installed
Capacity (MW
1
2
3
4
5
6
7
HUBCO COMPLEX
KAPCO
KOHINOOR ENERGY
AES LALPIR
AES PAKGEN
SEPCOL
HABIBULLAH COASTAL
RFO
LSFO/GAS/DIESEL
8
ROUSH POWER LTD.
9
RFO
RFO
RFO
RFO
Gas (Low BTU)
Gas
Nuclear
Hydel
TOTAL
896
* On turnaround /annual maintenance expected on bar in next 2-3 weeks.
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29
Rental Power Generation Plants
Sr.
#
Name of Power
Plant
1
GE Power
2
Alstol Power
(under testing)
Fuel
Installed
Capacity
(MW)
Derated/
Dependable
Capacity
(MW)
Current
Availability
(MW)
Gas
150
150
135
Gas
TOTAL
135
135
35
285
285
170
Remarks
136 MW
Expected
by Dec,
2007
30
30
Small Power Producers (SPPs)
S. No.
SPP
DISCO
Capacity
(MW)
1
Sitara Energy
FESCO
15.00
2
Crescent Textile
FESCO
4.00
3
Kohinoor Power
FESCO
4.50
4
Mehmood Textile
MEPCO
5.00
5
APTMA UNITS
TOTAL
VARIOUS
*150.00
178.50
* APTMA collectively is working with PEPCO and SPP Task Force to complete
Codal formalities to connect multiple SPPs on Network..
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Power Scenario Today
Power Production Technologies-World Averages
East
Domestic Commercial
Industrial Agricultureoth
47%
7%
26%
14%
Power
Scenario
Today
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Source: Associated Consultant engineers