Ministry asks Nepra to revise re-gasified LNG plants upfront tariff

KARACHI: The Ministry of Water and Power has approached the National Electric Power Regulatory Authority (Nepra) to review and revise the upfront tariff for re-gasified LNG-based power plants notified on April 3, 2015, an official said on Tuesday.
The official said the notified upfront tariff was only allowed on ‘Combined Cycle’, while as per the EPC contractors and main gas turbine suppliers / manufacturers ‘open cycle operation’ of these high efficiency gas turbines could be achieved eight to 10 months before the completion of the combined cycle.
“Practically, the units could be made available for commercial operation earlier, but due to the tariff limitations these will not be operated. Therefore, approximately 4.769 billion unit (kWh) (based on 92 percent availability) will not be generated, which has a direct cost to the national economy and also deprive the people from possible availability of cheap energy during load-shedding scenario,” the ministry said.
The official said in odd times when steam turbine unit is out of service for any reason, the plant would never be operational due to the tariff limitations. On the contrary, open cycle RLNG plant operations will incur fuel cost, which will still be better than many plants operating on HSD.
The ministry has sought Nepra’s permission to allow for tariff, on open cycle to expedite the construction process and encourage plant operators to make these plants available on open, as well a combined cycle mode to support the government’s efforts to eradicate load-shedding.
The official said the announced tariff had excluded the costs of gas compressors, which were required to supply gas at the desired pressure to intended high-efficiency machines.
“Although this cost should be picked by gas supplier, there is ongoing debate on the subject, as gas supplier wants power producers to pick the cost of supplies and compressors.” The ministry has also requested that this cost should be made part of the tariff and with or without gas compressor tariff provision be made to facilitate the smooth exemption and operation of the plants.