K-Electric forecasts cost reduction with 640MW renewable energy boost

KARACHI: K-Electric (KE), the sole electricity provider for Karachi, has projected a significant cut in electricity generation costs over the next two to three years after a planned addition of 640 megawatts (MW) of power derived from renewable energy sources, specifically solar and wind.

“This cut in the power generation cost may provide some relief to consumers in terms of fuel adjustment surcharge; however, the final decision rests with the government, which is mandated to fix the electricity tariff,” Moonis Alvi, chief executive officer (CEO) of KE told a group of journalists.

Alvi said 40 companies have expressed interest in investing in the 640 MW plants from renewable sources so far. “Twelve companies from Europe, China, and the Middle East have also submitted their bids for investment in solar and wind power projects.”

Alternative energy projects will be installed in Hub, Othal, Bela, and Sarjani Town in Karachi.About the quantum of investment, Alvi explained that these projects would attract $400-500 million, for which bids have been invited from local and foreign investors.

Speaking about electricity theft, non-payment of bills, and line losses, the KE chief said these incidents have increased in Karachi due to the high cost of electricity.

He pointed out that 80 percent of Karachi's area was exempted from load shedding; now, it has reduced to 72 percent due to line losses.Regarding dues disputes between KE and other departments, Alvi said an arbitrator has been appointed to address the issue of dues between K-Electric and other institutions, and 60 days have been fixed for the settlement of dues.

Alvi also said that the installation of smart meters has started in Karachi, initially for ten thousand users. “The Smart Meters pilot project has been started; after the results, the Smart Meters project will be further advanced.”

The CEO of KE said that the cost of a Smart Meter is currently forty to forty-five thousand rupees; in case of a larger order of Smart Meters, the price may decrease. Smart meters have been installed on all PMTs in the city; the installation of smart meters on PMTs shows how much electricity is used in an hour in the area, which comes into the data system, for about 29 thousand PMTs.