Daily Times

KARACHI: Electricity rates in Karachi may increase threefold as the K-Electric (KE) has filed a modification request in the National Electric Power Regulatory Authority (Nepra) for approval of Re-Gasified Liquefied Natural Gas (RLNG) as an alternative fuel for its existing power plants.

The KE, in a letter sent to Nepra, has said that considering the current demand/supply situation along with growing electricity requirements of the city, and significant curtailment in supply of the natural gas by the SSGC, the KE proposes to use RLNG as an optional/backup fuel to ensure availability of plants in case of reduction in natural gas supply.

It has further stated that the proposed change will improve availability of generation plants; however, the same will be achieved at the cost of increase in tariff to consumers, as RLNG is thrice as expensive as natural gas.

The KE said that in view of existing situation affecting consumers, no other cheaper option is available to KE, hence the company requests NEPRA to approve modifications in generation licence with immediate effect to include RLNG as an alternate fuel source for existing plants.

Further, considering the urgency of the matter, the KE has requested Nepra to allow the power utility to use RLNG on provisional basis until the process for modification is completed as the same is required to bridge the demand and supply gap.

KE’s generation fleet has a total available capacity of 1,902 MW, out of which around 913 MW depends on gas and requires at least 180 MMCFD to operate, while BQPS 1 is the only plant that can operate on dual fuel (gas and furnace oil).

The KE said that the existing situation of erratic and reduced supply of gas has seriously impaired the availability of KE’s generation fleet. While, KE is evaluating the option of High Speed Diesel (HSD) as an alternate fuel for BQPS II and KCCPP, the company has also evaluated the possibility of operating the power plants on RLNG subject to certain modifications/alterations at plant sites.

According to the company, with certain minor alterations in anatomical structure of KE’s power plants, these plants will be ready for their operation on RLNG.

SSGC and government have confirmed availability of RLNG and in this regard agreement is expected to be finalised soon, it added.

The power utility said usage of RLNG will result in increase of consumer tariff as RLNG is thrice as expensive as natural gas. However, RLNG shall only be used after full utilization of available natural Gas.

Following the aggravated power crisis in the metropolis earlier this month, the Prime Minister Shahid Khaqan Abbasi had intervened and the dispute between KE and SSGC got resolved.

Published in Daily Times, April 28^th 2018.