The new Indicative Generation Capacity Expansion Plan (IGCEP) mentions nuclear energy. The nuclear option is limited to the addition of one plant of 1,000-1,300MW, which appears to be feasible. The Chinese are eager to both finance and supply nuclear plants as there are no major buyers available at the moment.
Nuclear energy enthusiasts argue that since nuclear has a high capacity factor of 85 per cent and negligible fuel cost, its high capital expenditure (Capex) enables it to compete with hydro. These days, nuclear is carrying us through as imported coal power plants are barely producing more than 50 per cent of the total capacity due to high imported coal prices. But there are several safety issues, especially in our society where nuclear regulation is not independent and things are not in the public domain.
There are ‘siting’ risks as well, which relate to the impact nuclear power generation has on the surrounding environment, especially on water supplies which needs to be properly evaluated. This is a major reason for scepticism among a lot of knowledgeable people. If those who are in favour of nuclear power want to expand, they will have to be more open about major safety issues.
There are three imported coal power plants, and one is being planned to be installed in Gwadar. Except for this project, no additional coal power plant is planned in the future. Our heavy reliance on imported fuel has already taught us enough lessons. Thar coal has emerged as a cheap and reliable source. Its life cycle cost is only 8.5 US cents. Its current tariff, after accounting for inflation, is less than Rs12 per unit as compared to twice this figure of imported coal plants.
Thar coal cost is projected to come down as production volume goes up. There are proposals to convert, wholly or partly, the existing imported coal plants to Thar coal. These projects will take Thar coal power to 4,590MW as opposed to the total 4,680MW of imported coal power capacity – a level which will be achieved by 2031. However, under the Thar coal scenario, with the addition of two 1,320MW plants, a total of 7,230MW of Thar coal power capacity will be achieved. While it is true that more can be done, there are risks and international pressures which may limit utilization of Thar coal. The conversion of imported coal power plants appears to have a better chance politically, if lesser in terms of technical constraints.
The capacity of the existing RLNG power plants is 9,789MW which will be reduced to 8,710MW by the retirement of a number of steam power plants. More important is the case of four state-owned RLNG combined cycle power plants (Trimmu, Haveli, Bhikki and Balloki) with a combined capacity of 4,400MW. These power plants are under privatization. The IGCEP does not project any utilization of these power plants, unsure of its fate in terms of ownership. There were programmes earlier for the assured 30 per cent utilization and higher probabilistic utilization. K-Electric (KE) will add RNG power plants with an additional capacity of 1,320MW. Many people wonder why arrangements couldn’t have been made with KE to utilize these power plants either through physical transfer or electricity transmission. From where will KE bring RLNG?
The Kot Addu Power Company (Kapco) is requesting for the extension of its RLNG combined cycle power plants. Kapco should have the thermal efficiency of 50 per cent as its turbines are of lower vintage as opposed to 60-62 per cent of RLNG-based combined cycle newer power plants like Trimmu, Haveli, Bhikki and Balloki. The future of these new state-owned LNG-based power plants is uncertain; the IGCEP has shown nil to 10 per cent production of these plants.
Out of the 7,339MW retiring capacity, 3,156MW will be based on residual fuel oil (RFO), forming 43 per cent. RFO plants will soon be retiring. The most significant one will be the Hub Power Company Power (Hubco) – around 1,292MW retiring in 2027. Kapco power plants, which are RLNG-combined cycle power plants, with a combined capacity of 1,600MW will also be retiring; Kapco-3 is retiring in 2023 and Kapco 1 and 2 are to retire in 2026. Kapco management has been lobbying for the extension of the power purchase agreements (PPAs) of these power plants, arguing that these plants are in good working condition and can work for another 10 years.
Hubco has also tried extension by converting to coal, which did not prove to be feasible, especially in the current scenario of high imported coal prices. The Uch power plant has a capacity of 586 MW and is running on local low-BTU gas; it will retire in 2031. The 620MW Guddu 5-10 power plant which runs on pipeline gas will retire in 2023. Reportedly, there are safety and maintenance issues with this plant. If gas is available, the Uch-1 power plant may deserve a longer life, if feasible.
Old power plants have an advantage that they have cheap real-estate assets and installed infrastructure like gas and oil pipelines and storage. Their availability may be lower and thermal efficiency may have gone down. Older plants may also find opportunities for finding new partners under the Competitive Trading Bilateral Contract Market (CTBCM) bilateral contract and wheeling.
The general rule should be that all steam power plants running on RFO, RLNG and pipeline gas must go – this is because RFO and RLNG have become too expensive and pipeline gas has a high opportunity cost despite low prices. If oil and RLNG prices go down, maybe there will still be a chance for these power plants to remain useful.
The generation plan has to be accompanied by a transmission plan; both are mutually interdependent. While it was earlier announced that a transmission plan will soon be released, it has not been done. Transmission can add significantly to the generation cost and may influence project selection and generation of the last-cost generation plan. It is hoped that planners will expand their scope of work and expertise in this respect. The National Transmission & Despatch Company (NTDC) is a transmission company.
The IGCEP makes important and useful recommendations with respect to variable renewable energy (VRE). The IGCEP recommends the hybridization of solar and wind power, which will increase the time span of the availability of the two. Hybridization along with suitable storage can provide grid support, frequency control, reactive power, voltage regulation and reserve power. The IGCEP could have presented storage requirements in the plan which we had recommended earlier as well. Enough work and studies have been organized by IFIs on this and are readily available.
I would like to appreciate the work of the IGCEP team which has developed indigenous capabilities to develop such plans. It is revised every year to accommodate changes in the relevant aspects of the sector. Earlier, it used to be at a frequency of five years and done by expensive foreign consultants. The National Electric Power Regulatory Authority (Nepra) will now review the IGCEP, which may consider this article’s suggestions. This will decide what numbers to select and approve in a plethora of options and scenarios.
The writer is a former member of the Energy Planning Commission.
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