Daily Times

KARACHI: The National Electric Power Regulatory Authority (NEPRA) has granted electricity production licenses to National Power Parks Management Company (Private) Limited (NPPMCPL) for its proposed two Re-gasified liquefied Natural Gas (RLNG) based power plants.

NPPMCPL is a wholly owned company by Federal government and it has planned to setup two RLNG based power plants in Punjab. The federal government is setting up a combined cycle power plant with installed capacity of 1275.50 MW RLNG based thermal generation facility at Balloki, District Kasur, and another1276.858 MW RLNG based thermal generation facility at Haveli Bahadur Shah, District Jhang. The Nepra said these licenses will remain valid for a period of thirty two years from now.

In line with the Power Policy, 2015, federal government planning to set up RLNG based power plants has incorporated a special purpose vehicle in the name of NPPMCPL.

The Nepra stated that major issues related to RLNG based projects have already been deliberated by the Authority during the hearing held on February 09, 2016 in the case of Quaid-e-Azam Thermal Power (Pvt.) Limited and properly addressed in the determination of the Authority in the said matter.

Nepra has considered the information provided by the applicant along with the generation license application including feasibility studies of the projects, the interconnection and load flow studies, comments of the stakeholders, reply of NPPMCPL to the comments of various stakeholders.

The Nepra received a number of comments from stakeholders as Anwar Kamal Law Associates in its comments raised different issues in power sector in general such as surplus capacity, under utilization of power plants and induction of new power plants on take or pay basis. Anwar Kamal Law Associates also mentioned that taking the support of environmental ground, the costlier RLNG power plants are being run prior to exhausting the full available capacity of cheaper RFO power plants. This is causing huge financial loss to the electricity consumers, national exchequer, and power sector and also loss to the economy of the country.

However, Ministry of Water & Power commented that these projects are critical part of generation development in Pakistan and on fast track basis for implementation and this Ministry supports the proposal.

Regarding financing of the projects, NPPMCPL submitted that the project is currently being financed by the Federal Government through the Public Sector Development Program (PSDP) to the extent of the 30% equity. However, the remaining 70% funding will also be financed by the Federal Government in the form of loan.

On the query regarding the transmission of RLNG from Karachi Port to the project site, NPPMCPL informed that an independent pipeline for transportation of RLNG for the purpose has been initiated and is likely to be completed by December 2017.

‘The reply to the comments/observations of the stakeholders, submitted by the applicant were examined and found satisfactory. Accordingly, it is considered appropriate to process the application of the applicant for the grant of generation licenses as stipulated in the Regulations and NEPRA Licensing’, Nepra said.

Hydel based generation remained at the forefront, at 39.42 percent in August 2016 as compared to 41.43 percent in August 2015. RFO based generation saw a decline of 4ppsYoY, forming 28.34 percent of total generation in August 2016 as compared to 32.24 percent in August 2015.

This decline came in spite of a 17 percent YoY lower cost of generation based on RFO as RFO based generation cost declined to Rs 7.8/KWh in August 2016 from Rs 9.4/KWh in August 2015. The decline in FO and Hydel based generation was replaced by a

5.63ppsYoY increase in gas based generation which fuel cost stood at Rs 5.4/KWh.

On a Month on Month (MoM) basis, hydel based generation increased by 3.55pps whereas gas based and RFO based generation declined by 3.31pps and 0.62pps respectively. However, a MoM decline in gas is opposite to the upward YoY trend witnessed in Fiscal Year 2015-16 (FY16), whereby gas generation has actually increased by 5.63ppsYoY, due to higher availability of gas.