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7/25/2019 Power Policies, Planning and Bottlenecks - Final
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Power Sector Planning:Issues, Challenges and
Recommendations
Engr. Salahuddin Rifai
Senior Energy Expert AEAIcto!er "", "#$%
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Outline
Overview of the Power/energy sector Facts and Analysis
Issues originating and surroundingthe sector for consideration toarrive at right proposals/ policydecisions
Recommendations
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HISTORIC DEMAND & SUPPLYPOSITION
(2001-02 2013-14)
Fisc!Y"#
C$%'" P"*D"%+
C$##"s$+i+,S'!
S'#!'s.S/$#!!
200102 10!"# 10$#! !%"
200"0& 1%$!' 12&00 12!'
201011 1#2%0 1%1&% ""$1
2013 2001& 1&100 31
201!2!"00 1"&00 $#00
(A!! Fi,'#"s i+ M)
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P$"# 5"+"#i$+ 6 S$'#c"
1!(
%2("2(
2(
1985
Furnace Oil) !1(
*as) 2"(
+ydel) %2(
,uclear) 2(
2012
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-valuation of Five yearPlans
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Analysis of " year plans
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.yths vs Reality*rowth through elf Financing
0
20000
!0000
&0000
$0000
100000
120000
0
20000
!0000
&0000
$0000
100000
120000
Revenue PP nits old
Rs7Mi!!i$+ M*/
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nit old Revenue and PP Allocation
Y"#
U+is S$!
(M*/)
R"8"+'"
(Rs7Mi!!i$+)
PSDP
(Rs7Mi!!i$+)10 30 -
19 1:;22 204 240
1
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AI -,-R*3 PO4I53 PRO*RA.
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POER FUEL MI= AND TARIFFS PEERCOMPARISON
5s Oi! C$! HNO>>
India 12( 1( ( 1$(
6angladesh $2( 1%( 2( %(
7 1#( 1( !#( %1(
8 !!( 0( 2#( 2'(
Pa9istan 2'( %"( 0:1( %$(
&uel 'ix Consumer (ariff )P*R+wh-
7 F310 ata
Pa9istan;s ,epra determinedtari< P8R 1%:$/9wh
77+,O = +ydel ,uclear and others
1%:$
1%:2%
$:"#
":!'
':%&
Pa9istan
8
6angladesh
India
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C$s $ 5"+"#i$+
11
S$'#c"s C$s (Rs . ?/)
H"! $! (+") 1730 (
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>ransmission ,etwor9 inPa9istan
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-? @APA iscos areas
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INCREASED 5AP ETEEN NEPRADETERMINED AND 5$P TARIFF
0:00
2:00
!:00
&:00
$:00
10:00
12:00
1!:00
1&:00
NEPRA D""#%i+" T#iB + 5$8 N$i" T#iB
5OP N$i" Esi%" A8,7 T#iB
N"# D""#%i+" Esi%" A8,7 T#iB
NEPRA Dete rmined Average Tariff
5OP N$i" A8"#," T#iB
34Rs7 27;3.*/
39Rs7 3792.*/
24Rs7 272;.*/
40Rs7 700.*/
39Rs7 471
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-nergy ector a iggest pulic policychallengeB @hat is Pulic PolicyC
eDned in many waysC Policy is decision ma9ing
Policy is agenda setting / directing
Policy is realiEing values
An intentionally created plan
to guide decision ma9ingtowards achieving rationaloutcomesG
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Policies related to -lectricPower
Formation of @APA as a consolidated ody 1#"$ evelopment of +ydropower
*OP Focus on Power sector
>riPartie Agreement1#$"H*OP@6@APA
Introduction of Private Power+65O H4OI1#$" Power ector Restructuring Plan approved1##2
Private Power Policy1##!
Private +ydropower Policy1##"
-nactment of ,-PRA/,-PRA Act1##'
Power Policy2002 R:P:P;s of 200& 200#10
1$thAmendment and Power *enerations development2011
Power Policy201%
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@APA;s evelopment andIssues
@APA started at 11$ .@ installed capacity '0 *@+ generation '0 .lnRevenue 2'0000 consumers
Power ector made elf Financing
@APA increased to aout "'00 .@ I/5 of its own out of proDt
despite 1'1$ ( compound interest charged
*OP loans stopped for P/ development1#$"
4oad growth was tremendousup to 1$( annually
@6 undertoo9 to Dnance whole P/ ev: On condition of !0 ( /F y @APA outof proDts
Private Power generation resorted to y F*1#$"
1st: .O in 1#$$ for one +65O out of tens of o changed to 6OO without tari< impact
PPA one sided in favor of +65O entailed high capacity cost fuel pass thru with Jinde?ations of tari< items
Pa9istan the Drst country in %rd: @orld to have Priv: Power
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Private Power contd:
Fi?ed chargesB J 20/8@/month with 5PI
'" ( of capital cost to e paid ac9 with 1! ( interest in J terms inIst: 10 years
8AP5O privatiEed 1##& with tari< 2:& times higher oth started eingpaid in Kuly 1##&
5ost of 10 .8@+ from oth cost %# ln while %$ .8@+ of @APA costwas lesser
@APA started going to deDcit Dnding diLcult to operate satisfactorily
IPP;s of 1##! policy ased on +65O;s style though somewhat etter
,-PRA enacted in 1##' empowered to regulate and to approve tari
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5ontinued::
Restructuring made in 1##1/2 for corporatiEed P/ with ! *-,5Os ,>5 $10 I5Os/@APA
>hermal generation construction anned for @APA and 8-5 wef 1###2
*eneration cost increased form lesser than "0 6ln in 1##& to #00 6lnannually:
,-PRA determined tari< ased on 5O not charged instead *OP notiDedlesser tari< wef 200' promising susidies ut could not pay in full nor intime 5ircular et menace started
>ari< remained same during 2001200& at Rs: !:0"/unit
>ari< then increased Rs: #/unit H200'212
>ari< raised to Rs: 1"/unit in 201% under 201% P/Policy
5ircular et cleared in Kune 201% generation increased y 1'00 .@Nuic9ly ut the sustainaility of this increase is
5ircular det again grew to over 21" ln for less recovery and high linelosses somewhat ineLcient operations signiDcant theft:
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5ontinuedC
R:P:Ps resorted to with e?oritant rental values
RPP;s on gas contracted without gas availaility
,umerous candals/5ourt cases
/5ourt got all RPPs rescinded
A6; audit report was an important reference evelopment of power stations got delayed
ResultA 6ig shortfallemand upply *ap
*OP did give susidies wef 2010 ut came to e insuLcient
upply of fuel is insuLcient-nergy ecurity hampered
+ydropower development delayed
8alaagh P/B %'00 .@ not uilt despite wor9 since 1#"%on it:
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Planning;s Role
4oad Forecast and generation Planning on 4east 5ost asisy ,>5
evelopment of *eneration y @APA *-,5Os and PPI6
In view of huge emand upply *ap P5 has now tas9 of
Prepn: of " years Plan 201%201$ and ision 202" toridge the gap
>he capital costs reNuirements are very huge
P5 een consulting e?perts thru its oLcials
.o@P has set on a path of reforms tari< Increase
e?pedite recovery -lectricity theft 5ontrol 4: 4ossesreduction increasing eLciency with some success
>he deDcit is still very large li9e !00 lns and susidieslimited to 1$02$0 lns/annum
#"* ' $ CIRCULAR DET P#"
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#"* ' $ CIRCULAR DET- P#"2013 s"!"%"+
>ari< usidies
Interisco i
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7/25/2019 Power Policies, Planning and Bottlenecks - Final
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5ategory @ise 5onsumption
200! 200" 200& 200' 200$ 200# 2010 2011
"000
10000
1"000
20000
2"000
%0000
%"000
!0000
domestic industrial agriculture
A++'! E!"c#ici C$+s'%i$+ (5/)
Oserve the Pattern 4oad emand 5urve
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28
Oserve the Pattern 4oad emand 5urveHReferenceB .a?imum 4oad ay
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INSTALLED CAPACITY FOR 5ENERATION
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Price of Imported Oil
200! 200" 200& 200' 200$ 200# 2010 2011
10000
20000
%0000
!0000
"0000
&0000
12'#&1%#$#
22#&2211''
%"'!$
2%!2"
!$&2'
"!&0&
P#ic" (Rs . T$+)
USAID ENERGY POLICY PROGRAM
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-?change rate
200! 200" 200& 200' 200$ 200# 2010 2011
!0
"0
&0
'0
$0
#0
P?R . EFc/+," R("
P?R .
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>ough 5hoices @here to allocate
gas
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*as prices ector5omparison
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5omparative Analysis IF we switchfrom normal to eLcient ul
N$#%! '!6 E+"#, S8"#E+"#, Us," P"# /$'#(?H)
070 07013
O+" '!6 c$+s'%i$+M$+/!( ?H
107; 2734
10 6'!6s C$+s'%i$+ ?H 10; 2374Esi%" 6i!! i+ #'""s 12 2;07;
Esi%" C$+s'%i$+ $#20 %i!!i$+ c$+s'%"#s(ss'%i+, 9 6'!6s "#/$'s"/$!) i+ ?H
1:0;0:000:000 234:000:000
Esi%" i!! i+ P?R ( "#%$+/)
12:0:000:00
02:;0;:000:00
0
A#$i%" i+ P?R 127 6i!!i$+ 27;1 6i!!i$+
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4osses of I5Os
PRE REGUISITES FOR POER
A
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Present Q yearly demand to e ased on lowgrowth scenario of ,>5 planning upto 201%
then upgraded to align with *P targets: *P viE &( growth for the ne?t three years
and so on:
Planning to cater for additional '000 .@ in
the short run and then add yearly growth etc:H on the asis of *oP targets etc:
,ational Power Policy 201% to e revisitedand redrafted = considering all national goals:
PRE-REGUISITES FOR POERPLANNIN5Fc NTDC Data fixes PEPCO demand for 2013 at 23,000 MW (includin
de!ressed"su!!ressed demand#, $%ile same for PEPCO, &E'C self eneration is
2),000 MW* +ence, t%e !resent s%ortfall (ee!in PEPCO max eneration of 1-000MW# is .,000 MW
A
PRE-REGUISITES FOR NATIONAL POER
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PRE-REGUISITES FOR NATIONAL POERPLANNIN5
*P goals Hgrowth Proection
.*s = if to e followed
Additional goals = if any FutureHs viE: depletion OR availaility of
resources including fuel e:g gas coal
nuclear fuel 5rosscutting considerations y
incorporating targets for industrialgrowth agriculture production defense
needs etc:
Fc ,o Figures availale for Planning ut for the
ma?imum shortfall of 201%:
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P$"# S"c$# P!++i+,
Integrated emand Forecast y the ,>5 HAs per ,-PRA license to eaccepted for Planning
Integrated national level planning for hydropower reNuired
encompassing oth federal and provincial areas of urisdiction: ,uclear Power to e developed and its management system e studied
and emulated y power sector entities:
Power planning to e underta9en while considering oth the presentdepressed Q suppressed demands:
ites for generation plants to e D?ed y ,>5 for o
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P$"# S"c$# M+,"%"+
Recommendation for technical resource to manage the powersystem = right from the advisory resource of the P. to the
leadership of related O-s/P5-s FIR-walling of Power ector operations from outside inTuence =
including political and governmental:
erious +R./+R initiatives to e ta9en special = consideration at,PP entities:
Future leadership program e launched in line with thereNuirements Q covenants to attract latest technologiesincluding emerging sciences:
>echnology oLces to e opened = up in all P5-s = tas9ed toattract latest technologies etc:
A
Fc >he Present management is elow par asedon adhocism and primarily in the hands of nontechnical civil servants in the .o@QP:
5ENERATIONC
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5ENERATION
*-,5Os operating elow capacity:>echnology upgrades needed to increasecapacity y e?tra 1000 .@ in addition to
recovery of lost capacity: A technoeconomical analysis reNuired for
conversion to coal:
Futures study of coal pricing to eunderta9en:
Incentive ased management needed:
Integrated policies reNuired to encourage
Private ector investment under one window:
C
Fc *-,5Os operating elow par / ,o incentives foreLciency improvements/ new technologies not eing attracted:
i
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c$+i+'"
6A- 4OA PO@-R P4A,> to e ensured for aRI6>- *-,B/5AP>I- PO@-R/.I5RO*RI eencouraged:
R-isit of IPP PPAs for adherence to present groundrealities: 6OO>U V 6OO
Increase e?peditiously the R- up to certain (age of thetotal generation capacity =Indigenous production
>echnology upgrades for IPPs under an incentive asedplan to e encouraged:
TRANSMISSIOND
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TRANSMISSION
>ransmission system/grid stations toe developed/upgraded thru proper
load Flow studies ncovered Rural areas to e covered
thru R- generation:
6aluchistan Rural areas to ecovered thru %% 8 distriution linesrather than 11 8:
D
Fc ecrepit mired in 1#$0s "00 9v/220 9v less than
need = ma?imum capacity 1'000 .@ on sustainale asis:
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c$+i+'"
5onnectup of AK8 and *6 to the ,ational *ridin an integrated manner as per suitaility
4egislation to support availaility of Rightofway for transmission lines:
Private sector to e included only through PPPconcept under ,>5 with solid safeguardstransparently for all the parties
Formulation of AAR5 *rid capale ofallowing crossorder trade with Iran 5AAand eyond against set time lines:
DISTRIUTIONE
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DISTRIUTION
I>RI6>IO, system to e developed ondemand ut 6eneDtcost Analysis
Innovative methodologies includingprivatiEation of some operations may eadopted to ensure full revenue recoveryand theft control:
-nergy loss to e loo9ed into in detail =theft to e NuantiDed and not misused tohide technical loss
,ational 4oss Reduction Program to e
E
Fc ilipated unale to cater to needs of people mired in 1#&0s technology automation and latest
technologies not availale:
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c$+i+'"
6ring aout 5ustomer iscipline to ensureup to mar9 power sector operations:
Role of provincial governments/local
administration to e legislated/providedforin the updated -lectricity Act:
-lectricity Act 1#10 to eupdated/legislation of comparative
economies to e emulated: Provision for 5onservation Q -- to e made
in updated -lectricity Act:
CORPORATE & RE5ULATORY AFFAIRS (CORA)F
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CORPORATE & RE5ULATORY AFFAIRS (CORA)
,-PRA to e strengthened technically commerciallyand legally as per original ,-PRA Act 1##& andmade responsile for an eLcient Power ector:
P,RA;s Regulations to e considered forimprovements
-lectricity Act 1#10 to e immediately updated yadopting such legislation of comparativeeconomies:
6Os of the P5-s to speciDcally comprise ofsectoral professionals during the ne?t %" yearswhere after others too could e considered:
F
Fc 5ORA in nonprofessional hands legislationunale to support utility operation I5Os unale to
recover revenue or control losses:
c$+i+'"
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c$+i+'"
Amalgamation of all e?isting policies into onedocument H all encompassing
5onservation and -- to e adopted as perregulations:
Reasonale and well wor9ed out pfront tari- on the asis of I56/ lowesttari< /option/ ids fairly:
-nergy trading and full conversion from the singleuyer to the multiuyer model of power mar9et y
201$/20: -lectricity >rading Q @heeling to e supported as a
,ational Policy gradually
@eaningo< of industry from the I5O systems andstrengthening of 5aptive Power portfolio fairly
TARIFF FORMULATION CHAN5ES5
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TARIFF FORMULATION CHAN5ES
-?isting plain energy suppression model of power tariwo Part >ariargeted susidies
>O tariari< for 5P/PP operations to e rationaliEed to cater
for private sector to enhance generation at I5Oslevel fairly
Aility of I5Os to uy from PP plants on the as andwhen reNuired asisG:
5
PULIC PRIATE PARTNER SHIPSH
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PULIC-PRIATE PARTNER SHIPS
PPPs to e structured after road shows etc:
.anagement contracts too can e structured for theP5-s = success stories to e emulated:
4easeout of e?isting *-,5O plants to private sector:
-?perimental 4easeout of istriution su division forI5Os which are at lower rungs of privatiEation:
Out sourcing of speciDc operations of the P5-s:
@APA has developed its generators and ,etwor9through 6onds issued at 1$1# ( interest Rate:
H
Fc,o concept at all oth the pulic and the
private sectors operating at di
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FINANCIN5
Financing of at least Rs: !00 illion eprovided from the national udget each year
for Power ector proects Interest on Relent 4oans to e reduced to ' (
li9e 8-5
imilar provisions e made y
provinces/AKQ8/*6 W their own or again fromthe ,ational udget:
A long term FIP e formulated to cover>ransmission and istriution system gaps:
>he same to carryon even after privatiEation:
IFc6udgetary outlays stopped long ago: .4AsDnance availale on relent asis through the *oP
5oncept of O-s garnering private Dnance none?istant ector cash starved:
INDE5INIJATION OF PLANTK
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EGUIPMENT.FUELS
IndigeniEation of power plants and alliedeNuipment e encouraged for a
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c$+i+'"
.inistry of production to spearhead suche
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POER SECTOR MONITORIN5
XRole of Planning 5ommission e madeclear
X,o role to e assigned to temporary ORma9e shift arrangements e:g: monitoringcell in the P.s oLce:
XRole of .inistry of @QP
Policy ma9ing
Policy implementation
.onitoring and -valuation
?
Fc4ac9 luster nonprofessional way wardTuid with changing goals on whims: Present .o@QP
with multiple tiers of control est e?ample of the rot:
+," + s +, #c "c '#" $
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, ,P$"# S"c$#
@APA to e given lead in implementation of mega @aterand Power proects:
Possile placement of ,>5 under @APA Has the onlyP5- to remain in the pulic domain
@APA and ,>5 to e Drewalled from outside inTuenceas per @APA Act 1#"$:
*-,5O holding 5o to e made e
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P-P5O could e reuvenated with changedmandate from management and holding company
to the ,ational Power AuthorityH,PA on the samelines as @APA with ,ational Power Planning itsimportant pillar: It should help in Recovery andreduction of losses esides monitoring andevaluation of all ongoing proects and to speed
trac9 implementation of the same through@APA/,>5 etc:
>he ,PA would act as the coordinating and policydrafting ody for the Power ector: .o@QP to
restrict itself to policy ma9ing only: Reform process can continue with independent
*-,5Os ,>5 and the I5Os reporting to the ,PAetc: the things can change once a few entities getprivatiEed: DISCOSI%#$8"%"+
@APA;s earlier motto of rovidin continuous
C$+i+'"
C i
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-,-R5O, can e placed
under P-P5O = revived witha redone charter acting as a
coordinator/ implementationody of the *oP H on ehalfof the .o@QP
PPI6/A-6 to e restructured = ,ew 6Os to e
formulated
C$+i+'"
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CONCLUSIONS
A paradigm shift has to ta9eplace:
5hange of present thin9ing = amust:
Planning to e ased on >echnoeconomic considerations alone:
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hort >erm Interventions
hort >erm Interventions Proposed 5opy:doc?
http://var/www/apps/conversion/tmp/scratch_7/Short%20Term%20Interventions%20Proposed%20-%20Copy.docxhttp://var/www/apps/conversion/tmp/scratch_7/Short%20Term%20Interventions%20Proposed%20-%20Copy.docxhttp://var/www/apps/conversion/tmp/scratch_7/Short%20Term%20Interventions%20Proposed%20-%20Copy.docxhttp://var/www/apps/conversion/tmp/scratch_7/Short%20Term%20Interventions%20Proposed%20-%20Copy.docx7/25/2019 Power Policies, Planning and Bottlenecks - Final
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>+A,8