Embed Size (px)
Citation preview
IMPLICATIONS OF RENTAL POWER PROJECTS FOR PAKISTAN
By Mian Muhammad Zulqarnain AAMIR DMG91st National Management Course
Dr Imtiaz BokhariSponsoring DS16th Oct 09
Sequence
Talk of the Town
Energy crises-Historical perspective
Power Scenario-Today
Power production-Made easy
PMLN & PPP
Analysis
Conclusions
Recommendations2
Hue & Cry Screaming & Shouting
3
Talk of the Town
Energy Crises- A Historical Perspective
“Policy makers have a tendency to act in the field of Energy during extreme crises when serious shortage appears.”
Soon after 1947 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 us”
4
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”
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.
5
2003-04 Growth 7.3%. Power demand 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
Historical Perspective
Energy Crises- A Historical Perspective
6444
4675
3910
6097
5525
285285
0
1000
2000
3000
4000
5000
6000
7000
Hydro Genco IPP RPP
InstalledDependableC.Generation
j
Total Capacity 17529 MWDependable 16192 MWGeneration 12551 MWPeak Demand 15663 MW
Source: MD Pepco Presentation to BOI Nov19,2007 & Minister's presentation to the cabinet July 20096
Power Scenario
Today
Power Production Technologies
30%
26%
41%
2%
1%
CoalNuclearHydro GasF.oil
150 MW4506500 58009000Source: Associated Consultant engineers
7
Power Scenario Today
Power Scenario
Today
16%
20%
6%15%
41%
2%
CoalNuclearHydro GasF.oil
8
Power Scenario Today
Power Production Technologies-World Averages
Other
Source: PEPCO
Power Scenario
Today
47%
7%
26%
14%6%
AgricultureCommercial IndustrialDomestic
9
Power Scenario Today
Power Scenario
Today
Consumption Patterns-Non Productive
Other
Source: PEPCO
Average Industrial ConsumptionWorld 42%China 80%
Load shedding Power rationing
ORFuel rationing
Source: PEPCO
10
Power Scenario Today
Shortage Wrongly
Perceived
Source: PEPCO
11
Power Scenario Today
Independent Power ProducerAn 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.
Rental Power PlantsAn 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.
12
Power Production Made easy
Facts And Figures
IPPs RPPsSet up time 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 %
Tariff Based on Project cost N / A
Disclosure of cost Required Not required
Equipment Brand New < 10 yrs old Refurbished & < 60000 hrs
Environmental cost Low High
13
Power Production-Made easy
Power Means Leakage
Nationwide
14% Advance.Original 7%. Unprecedented government facility was not made public when the PPIB sought letter of interests.
6% withholding tax deferment.
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.
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
Pakistan Power Puzzle
15
Implications for Pakistan
Environmental Compromise No Environmental Impact Assessment
Import Bill Uncertain due to Fluctuating Oil prices
Higher Energy cost for Consumers Expensive units Negative Growth Decreased export
Blurred Future Hurriedly conceived – 3-5 Years life span
16
Analysis
Points to Ponder
Annual capacity payment for a typical 200 MW RPP = $79 million IPP = $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…….
Annual Fuel payment for a typical 200 MW unit RPP = $211 million IPP = $174 million
A difference of $37 million a year or Rs 3 billion a year per RPP.
Source: Pepco, Dr. Farrukh Saleem, Director of the Centre for Research and Security Studies
17
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
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
Hurriedly Conceived
18
Analysis
PEPA 1997 Section 12Initial Environmental Examination and Environmental Impact Assessment
(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.
Analysis
NO EIA
19
Recap
Criminal neglect by Leadership 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
Conclusion
Ignorance towards energy conservation Use of inefficient electrical equipment Decoration /showoff
Implications Degradation of environment Increase in Import Bill Additional burden on consumer Stop-Gap arrangements
20
Simple Solutions
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.
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.
Recommendations
21
Install LED Street lights and Traffic signals (Mean Time Between Failures MTBF 10,000hrs) to save 80% electricity.
Make installation of affordable solar water heaters mandatory to free large quantity of gas for generation.
22
Recommendations
Simple Solutions
Pakistan should go for renewable energy sources: Hydel Power Wind Power Solar Thermal Power Small Hydro Plants Thermal Power Plants using
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.
23
Recommendations
Simple Solutions
ConservationDemand side management through conservation of power
Acceleration IPPs currently in the finishing stage
Reactivation Already installed power generation capacity
AccommodationCaptive and SPPs into main energy buying orbit
To bridge Pakistan’s electricity supply and demand gap.
NutshellCARA
24
Recommendations
Q& A
25
26
Existing Generating Capacity - 2007
TypeInstalled
(MW)Derated / Dependable (MW)
Current Availability (MW) Demand 2007 (MW)
Summer Winter
Hydro 6,444 6,444 6,444100
%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%
SPPs 28 28 28100
% 28 100%
RENTAL 285 285 285100
% 285 100%
Total 17,529 16,192 13,218 82% 11,413 70% 15,83826
27
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
89 32 32
7 Dargai 20
8 Nandipur 13.80
9 Shadiwal 13.50
10 Chichoki 13.20
11 Kurram Garhi 4
12 Renala 1.10
13 Chitral 1
TOTAL 6444 6444 6444
*Jabban (Malakand) Hydel Power Station has been de-commissioned due to fire incident on 12.11.2006 and will be re-commissioned after rehabilitation.
27
28
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*
TOTAL 4675 3910 2525
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. 28
29
Thermal IPPsSr. No. Power Plants Fuel Installed
Capacity (MW
Derated/ Dependable
Capacity (MW)
Current Availability
(MW)
1 HUBCO COMPLEX RFO 1292 1200 896
2 KAPCO LSFO/GAS/DIESEL 1638 1386 1164
3 KOHINOOR ENERGY RFO 131 124 107
4 AES LALPIR RFO 362 350 340
5 AES PAKGEN RFO 365 350 0*
6 SEPCOL RFO 117 103 95
7 HABIBULLAH COASTAL GAS 140 129 125
8 ROUSH POWER LTD. GAS (CONVERTED) 450 395 0*
9 SABA POWER CO. RFO 134 125 0*
10 FAUJI KABIRWALA Gas (Low BTU+Pipe Line) 157 151 77
11 JAPAN POWER GEN. RFO 135 120 103
12 UCH POWER PROJECT Gas (Low BTU) 586 551 555
13 Liberty Power Gas 235 211 207
14 Chashnupp Nuclear 325 300 259
15 Jagran Hydel 30 30 7
TOTAL 6097 5525 3936
* On turnaround /annual maintenance expected on bar in next 2-3 weeks. 29
30
Rental Power Generation Plants
Sr. #
Name of Power Plant Fuel
Installed Capacity
(MW)
Derated/ Dependable
Capacity (MW)
Current Availability
(MW)Remarks
1 GE Power Gas 150 150 135
2Alstol Power (under testing)
Gas 135 135 35136 MW
Expected by Dec,
2007
TOTAL 285 285 170
30
31
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 VARIOUS *150.00
TOTAL 178.50
* APTMA collectively is working with PEPCO and SPP Task Force to complete Codal formalities to connect multiple SPPs on Network..
31
Power Production Technologies-World Averages
Source: Associated Consultant engineers
32
Power Scenario Today
Power Scenario
Today
Domestic CommercialIndustrial Agricultureother+KESC+IPPsEast 47% 7% 26% 14% 6%
