Fuel cost component of CPPA-G, KE’s RLNG plants comparable for Dec 2024: spokesperson

KARACHI: During December 2024, 21 per cent of the electricity procured by CPPA-G (i.e. 2,171 MW) came from RLNG plants within the national grid as compared to 19 per cent produced by KE (i.e. 252 MW) from RLNG, with fuel costs comparable to those power plants operated by KE during the same period, says the spokesperson K-Electric.

Clarifying reports regarding KE’s generation cost during December 2024 and the power utility’s drawl from the national grid, the spokesperson said, “Demand during the month had become low due to the winter season, and KE managed its supply from the NTDC appropriately. KE matched the low demand with a balanced supply from the NTDC network, using plants where the cost is comparable to other plants run by the NTDC network.”

The spokesperson said, “It is pertinent to highlight that if KE could have received its quota of natural gas as was committed, the cost of fuel could have fallen to PKR8/kWh, a mere 40% of what it was during December 2024.”

The spokesperson explained, “Delving into details, at this instant, it is pertinent to highlight that comparing only fuel costs – as done in the report – may not provide a holistic view. A comprehensive analysis, including capacity payments, shows that the total power purchase cost of the national grid is approximately PKR 27/kWh. In comparison, the power purchase cost of KE would be similar.”

The spokesperson maintained, “In terms of fuel cost of electricity, the KE system, when compared with CPPA-G, is higher because unlike CPPA-G, KE does not have availability of Nuclear- or Hydro-based power plants in its fleet, nor is KE provided sufficient supply of Indigenous or Low Btu gas to operate its own plants. When it comes to operating RLNG plants, KE’s procurement of electricity is similar to that of the national grid.”

“As rightly highlighted by the esteemed member of Nepra, KE remains committed to procuring cheaper power from NTDC and the same has been demonstrated by completion of KKI and Dhabeji Grid by virtue of which the drawl from NTDC can be increased to around 2,000 MW, the confirmation of which is awaited from NTDC,” the spokesperson stated, adding, “At the same time, KE is actively engaging with NTDC and seeking its valuable cooperation to ensure a more seamless and efficient power supply. Through mutual collaboration and ongoing dialogue, KE aims to enhance the reliability and stability of the system for the benefit of all stakeholders.”

“Additionally, KE is actively working to rationalize its energy costs for which the company has already issued 640 MW of renewable RFPs. Competitive Bidding Process has been concluded, and the Bid Evaluation Reports for these projects have been submitted as per directions of Nepra,” the spokesperson concluded.