Less efficient IPPs being run at higher capacity

KARACHI: The merit order is not being followed in the issuance of dispatch instruction to Independent Power Producers (IPPs) for power generation, resulting in under-utilisation of more efficient plants, an industry official said on Wednesday.
“Plants having higher production cost are getting higher dispatch instructions as compared to the IPPs having lower production cost in violation of the economic order, which says plants with lower production cost should be utilised first up to their maximum capacity,” the official said.
The statement of generation versus economic order for the month of July 2015 shows that Kot Addu Block-1 with dependable capacity of 325MW was able to utilise 97 percent of its capacity as per the dispatch instructions by the National Transmission and Dispatch Company (NTDC), despite having economic order rank of 31.
Liberty Power with dependable capacity of 196MW was asked to utilise its 81 percent capacity despite that its economic order rank is 42.
K-Electric having economic order rank 43 and dependable capacity of 124MW was utilised at 77 percent capacity verses other plants having economic order lower than KEL were utilised at less than 60 percent capacity.
On the contrary, Uch with dependable capacity of 551MW ranks number 5th in capacity utilisation despite being first in economic order rank.
Moreover, Liberty with dependable capacity of 212MW and economic order rank of 2 has been given lower priority with only 84 percent capacity utilisation.
Fauji Kabirwala with dependable capacity of 151MW was run on 83 percent capacity despite economic order rank of 8.
Similarly, the Uch-2 power plant with dependable capacity of 388MW has been ranked 4th in the economic order, but it is placed at number 11 in the priority list and being utilised at only 79 percent of its capacity factor.
Genco Guddu CC 5-10 with dependable capacity of 530MW, has been placed among the last few in the priority list despite having economic order rank of 14 as only two percent capacity of the plant is being utilised.
An official said the power producers are paid capacity charges if the 100 percent capacity is not utilised; therefore efficient plants should be utilised at full capacity.
The current dispatch instructions are against the provision of the National Power Policy 2013 which is to ensure the generation of inexpensive and affordable electricity for domestic, commercial & industrial use.