Money Matters

Hollow promises

By Hussain Ahmad Siddiqui
Mon, 05, 17


The full-scale electricity load-shedding, of 13 to 14 hours on daily basis, has made a comeback this summer with a vengeance, as early as in April. The electricity shortfall of about 6,200MW was registered on April 16, despite repeated tall claims by the government to drastically reduce load-shedding by this summer, and to end load-shedding completely by June 2018.

Apparently, Prime Minister Nawaz Sharif, having had record five successive meetings of the Cabinet Committee on Energy (CCoE) in a month, has conceded his government’s failure to overcome the energy crisis. The forecast that May and June would be the hottest and dry months has really embarrassed the government, and to salvage his political career, the Prime Minister has directed the power sector to minimise the load-shedding during the upcoming month of Ramazan, and not to resort to prolonged and unannounced power outages. But, is it a realistic goal, given the conditions?

As on May 7, total demand of electricity was 20,223MW, whereas optimum power generation was 15,437MW, resulting in a shortfall of 4,786MW minimum during the day that caused 8-hours of load-shedding for urban areas and 15-hours of load-shedding in rural areas.

Currently, total gross installed power generation capacity is 24,906MW and net/effective/available capacity of about 19,900MW, but the government has never achieved power generation higher than 16,000MW at any time, due to a variety of factors. Sadly, the focus of the government remains on adding power generation capacity to the system, oblivious to the hard realities of poor governance, resurfacing of circular debt, massive line-losses, outdated transmission and distribution system, and, above all, appointments of non-professionals to head public sector organisations. All these issues needed to be addressed effectively and urgently, but were ignored.

For drastic cut in load-shedding Prime Minister Sharif was banking on completion of the various on-going mega hydropower projects ahead the envisaged schedules he had dictated to WAPDA from time to time. These include Neelum-Jhelum Hydroelectric project of 969MW, and Tarbela Fourth Extension Project of 1,410MW. Neelum-Jhelum project commenced construction in January 2008, and was scheduled originally to go into operation by October 2011, but is still incomplete. All the time there is given a new deadline for completion, whereas, meanwhile, the project cost has also gone up manifold---from initial Rs130 billion to Rs500 billion.

Interestingly, PM Nawaz Sharif had visited the site on June 19, 2013, and directed the management to speed up completion of the project by two years. The first turbo-generator unit was to be commissioned by July 2017 as per revised schedule, and all the four units by December 2017. However, without going into technical complexities and financial constraints the project suffered, he directed to achieve commissioning of the first unit by June 2015, and to complete the project by December 2015. Obviously, this did not happen as the government could not provide requisite $475 million for the project, which achieved its financial close as late as on June 22, 2016. Now, the project is further delayed, and the trial runs of the power station machinery are to commence in February 2018, whereas all the four turbines are scheduled to achieve commercial operations, progressively for each unit, during February-May 2018.

Likewise, PM Nawaz Sharif had asked WAPDA to expedite Tarbela Fourth Extension Project being constructed at a cost of $928 million. Under an accelerated plan, costing additional $51 million, he had desired to complete the project a year before the actual deadline of March 2018. Thus, the first unit of 470MW out of three units each of the same capacity was to be connected to national grid by June 2017. This was not feasible, and meant compromising on engineering principles and standards. Therefore, the target could not be achieved due to high water flows during July-October 2016 that also resulted in an accident at site last year, and other technical reasons. In the wake of slow pace of construction work, the project is not likely to be completed by the original deadline of February 2018 either, though the stage is set for Prime Minister’s inauguration of the project on August 14, 2017.

The status of various thermal power projects undertaken by the present government is similar, and far from satisfactory. The present government had revived 425MW Nandipur thermal power project with a lot of fanfare, but it is hardly generating 80MW. The power station has been handed over to the Chinese for a period of ten years for its operation and maintenance. Currently, the combined cycle power plant is being converted on RLNG (re-gasified liquefied natural gas). Quaid-e-Azam Solar Park project of 100MW capacity at Bahawalpur is generating a meagre 12MW to 18MW as the module has net capacity factor of 18.30 percent only. Ironically, its levelised tariff is Cents14.15 per kWh, the highest compared to using any other resources for power generation. Government of Punjab had plans to develop the Park of a total capacity of 1,000MW under a phased program, but even after a lapse of over three years it could not bring a single investor, in spite of an attractive upfront tariff of Cents16.3 per unit. The 100MW solar module, constructed at an EPC cost of $169 million, is already up for privatisation, if there is any buyer.

Initial phase of the first imported RLNG based Bhikki combined cycle power project of 1,180MW cumulative capacity costing Rs77 billion was inaugurated by PM Nawaz Sharif on April 16. The project was still under tests and trials when connected to the national grid, and caused successive tripping of turbines. One turbine suffered complete closure, while the other provides inconsistent power supplies. The power plant is generating only 360MW since then, against an installed capacity of 2x385MW (717MW) of first phase in simple cycle mode, and tests and trials of the turbines continue, though both the units had passed the 168-hour reliability operations test at full load of 408MW. Turbine manufacturer however claims simple cycle rating of 397MW net baseload output of turbine.

Technical problems are attributed to the fact that the General Electric 9HA.01 gas turbine acquired for the project is based on a new technology. Though orders for these turbines are placed on GE from France and Japan, it has so far not been commercially tested anywhere in the world and has no proven efficiency levels--- a major criterion for selection of turbine, and critical to economic success of the power station. Prototype performance validation testing of the turbine was done in 2014-15, and, obviously, the Chinese EPC contractor for the project, Harbin Electric International, has no operational experience of these turbines. Intriguingly, the website of the Quaid-e-Azam Thermal Power (QATPL) does not provide any information about Bhikki power plant machinery. The project, scheduled for combined cycle commercial operations by December this year, has not yet achieved financial close.

The writer is former  of the State Engineering Corporation