Saturday, August 7, 2010

Load-shedding :why? when there is ample capacity

Current Installed capacity of Electrical power generation is 21000 MW.We seldom see in the summer,Maximum demand to be exceeding 17000 MW.And the load shedding is to the tune of 2-3000 MW. And still more astonishing to a lay person may be that there is load shedding in winters as well,when the demand is several thousand MW lesser. What is the problem then.Firstly the installed capacity is not always put to use for a vareity of reasons such as the following:

1)A considerable capacity is of outdated old plants,which run as and when these are not sick or broken down. At least 2-3000 MW of capacity is in that category. In most countries such plants would be replaced by new.It costs only 50-60% of green field project costs and is always the most advisable investment.

2)Hydro capacity goes down to 10% of the installed capacity in winters due to low discharges in the river and possibly lower water requirements as well.So although demand goes down, supply goes down as well in the winters.

3)There is a gas shortage as well.So some capacity is not utilized due to gas shortage.

4)Finally there is a shortage of liquidity in the power sector and oil sector.GOP is not able to pay the subsidy promised by it.Provincial governments do not pay the bills.KESC has been suffering from low liquidity due to its accumulated losses exceeding Rs 100 billion.Oil cannot be purchased and refined to be used in the power plants.In the last NEPRA meeting two of the members were so annoyed with KESC's inadequate capacity utilization,that they did not sign the KESC determination.PEPCO did the same.

5)Rental Power could not come on stream due to long debate and protestation in the media and the parliament with accusations of corruption.ADB was called in which more or less supported the government position and the go-ahead was give belatedly.Benefit of the rental power was partly washed away due to the inordinate delay.

What is to be done.Most of the required steps have already been taken by the government.I would be narrating and critically evaluating those and offer one or two of my own thoughts.
1)Drastic steps have been taken to manage the demand,which has caused a consuderable reduction of Peak Demand by 1000-1500 MW.Similarly steps have been taken to manage gas load to supply more gas to the power sector.
2)Tariffs have been raised already and additional increases would be gradually made to reduce the subsidy requirements and the consequent circular debt.GOP has taken steps to inject money into the system.Provincial governments have been asked to pay their dues.
3)Steps are under way to undertake BMR(balancing, modernization and replacement).Assistance of USAID has been sought in this respect as well.

Perhaps this is all that was required except that implementation of the decisions be made seriously and swiftly.The outdated plants should be maintained for peak loading purposes and should be run on oil rather than gas.Rental Power which has been discussed elsewhere should ha ve been acquired for peaking purposes which would have cost lesser in fixed costs.

Gas fired IC engines should be installed in IPP or Rental mode or by PEPCO itself on stranded gas fields and wells.Also there are a number of Low Btu gas fields that should be utilized for these purposes.Some adjustments and arrangements should be made with companies like UCH power whose expansion project has not moved as per expected schedule, and thus gas resources remain unutilised.A good inventory of stranded gas should be taken to identify possibility of extra gas and implement gas based I.C.engine power projects on fast track basis. Reorganize and rejuvenate PPIB.They also need a BMR.A closer liaison and coordination between Ministry of Petroleum and Ministry of Water and Power is required.

No comments:

Post a Comment