K-Electric applies for five-year extension for old power units

KARACHI: K-Electric Limited (KEL) urged the government to allow power generation from its two 420 megawatts plants for another five years as the company has so far spent over Rs1.5 billion on their rehabilitation, The News learnt on Wednesday.

K-Electric filed an application with the National Electric Power Regulatory Authority (Nepra), seeking five-year extension in the useful life of unit-I and unit-II of its Bin Qasim Power Station (BQPS-I), whose useful life, as per the generation licence, is due to expire in August 2018 and August 2019, respectively.

KEL, in an application, proposed that the useful life of unit-I and unit-II should be revised up to August 2023 and August 2024, respectively. The power units, each having 210 MW of installed capacity, were commissioned in 1983 and 1984, respectively.

KEL planned an addition of around 3,000MW of generation capacity through its own fleet as well as power purchases from independent power producers within the next five years, which will take the company up to a surplus position.

“Until such time the planned projects materialise it is important that the existing fleet is maintained and utilised to its maximum, considering the current shortfall in supply and rising demand of the city of Karachi and its adjoining areas,” the utility said.

K-Electric has more than 2.5 million connections across residential, commercial, industrial and agricultural sectors, while it is serving more than 20 million people in and around Karachi. It needs to meet consumer demand of 2,700MW in peak summers, while its supply hovers around 2,400MW.

KEL said it is rehabilitating BQPS-I to ensure adequate supply of power to meet the growing demand of the city and to maintain a spinning reserve to enable uninterrupted and reliable power supply.

“Through major and minor rehabilitation/overhaul it is estimated that the units can operate reliably for another five years after expiry of their current licenced term.”

KEL had planned Rs1.761 billion of investment in rehabilitation of units I and II; of which, a sum of Rs1.522 billion has already been spent on overhauling in the past three years, according to a document.

KEL clarified that further operation through enhancement in useful life of the units will not have any additional impact on the fuel cost. The company is authorised to pass fuel and power purchase cost on to consumers in line with the Nepra’s determined benchmarks under the KEL’s multi-year tariff. Currently, units I and II are a part of KEL’s generation fleet.

KEL continues to receive a large number of new connection applications on daily basis, increasing demand of electricity. Growing power demand calls for addition in generation capacities as well as tapping into surplus power available from captive units.