Power Plays

Why aren’t our resources being fully utilised?

Mr Ahmed is a student studying the Government College University Lahore. He wrote to me in response to an article I had written asking me: is the current power crisis and prolonged load shedding due to a lack of generation capacity, a lack of power distribution capacity or due to financial issues and the circular debt? My initial response was all three, but then I did some further research.

The present PML-N government has been extremely furtive about the dsclosure of meaningful data that would allow any prospective researcher to try and investigate the truth. The regulatory authority NEPRA used to publish its annual State of the Industry Survey that would spell in detail the performance of the various power generation and distribution entities, but that has not been published since 2014  (since the present government took over), similarly  NEPRA’s own annual report has not been available online since 2014.

What is available are the payments to the various Genco (government owned power generation companies) and IPP for the last none months, and this makes interesting reading indeed. With the headline conclusion that for at least seven months of the year, even today there is at least an additional 3,000 MW generation capacity in the system that could potentially reduce load shedding by almost fifty percent. The government, having promised that load shedding will end in 2018, is perhaps deliberately holding back so that it can release this additional power and come out smelling like a rose just before the elections.

Let us start with demand. Pakistan has one of the lowest consumption per capita energy. Thus Turkey with a population of seventy five million has an installed capacity of over 70,000 MW of electricity as opposed to Pakistan with a population of 190 million has only approx. 22,000 MW of installed power. To reach the same generation capacity as Turkey, Pakistan would need an installed power capacity of over 170,000 MW – or, in other words, seven times more than our existing capacity. Here, generation and demand suppression is a huge issue.

Even as per NEPRA’s own projection for PEPCO alone, the demand is around 25,000 MW for the summer months evening peak and approx. 21,000 for the winter month’s peak. Given that you normally need 15-20 percent installed capacity more than demand, it means that the installed capacity should be at least 30,000 MW.

The domestic power demand for PEPCO is almost 44 %. Of the total, industry is at 27%, while commercial and agriculture demands are at 6%, 10 % respectively. Comparatively, Turkey where industrial demand is 32% and domestic demand is 37%. Globally power Industry demand is 28% while domestic is at 34%.  Traditionally the industry tariffs are higher than domestic tariffs. What this means, is that there is a limit on how much we can raise the tariffs, and that we are not supplying as much power to the industry as it ideally needs.

On the distribution, PEPCO has twelve substations of 500 Kv and twenty nine substation of 220 Kv or an approximate distribution capacity of 17,000 MW, this is without any redundancy or fault provision so roughly today we can only distribute 16,000 MW of power regardless of generating capacity, so if the demand and supply need to be matched then the distribution capacity needs to increase to approx. 30,000 or approximately double what it currently stands at.

With regards to generation capacity PEPCO has an installed capacity of approx. 22,100 MW, with an available capacity of 21,850. Of that approx. 7,000 MW are hydel (that is seasonal). In January, when the dam’s water levels are low, this capacity falls to 1,000 MW. We have 8,743 MW of IPP capacity even though the transmission company NTDC shows 800 MW less than the amount. But the most interesting is the performance of WAPDA owned Gencos or the thermal WAPDA owned and operated power stations. These – for the last nine months – have only been operating at 36% of their capacity as opposed to the IPPs that operate at the required 60% capacity. In November 2015 the Muzafargarh Genco III with an available capacity of 1,600 MW operated at only 10% of its capacity while in Dec 2015 this figure was even lower at 9%. This is at a time when output from the hydel units was already low. This low utilisation is inexplicable and deprives the country of at least 2,200 MW in overall available capacity.

This amount together with the 800 MW of IPP that are not shown will add approx. 3,000 MW to the overall system which in the winter months could reduce load shedding by approx. 50%. Why the government is doing this is a mystery, those who believe in conspiracy theories advocate that government is holding back so that next year once it’s closer to election time, this additional capacity will be released into the system and everyone will win much kudos. If this is indeed the not the reason then the government should publically explain why its own GENCO are running at such a low utilisation of 35% instead of 70% which is normal and why the full IPP are not operational, gas and furnace oil are no longer an excuse as both are available in ample quantities, the LNG terminal has been operational since April 2015, while the price of High Sulphur Furnace oil is a competitive $220/ tonne. So the answer for Mr Ahmed is that yes in the long term we need additional generation and distribution capacity but in the short term the government has some serious explaining to do with respect to its management of this crisis.