UNDECLARED load shedding by KESC is a matter of routine and quality of consumer services remains poor. Interruption of water supply and industrial production, as a result of frequent power breakdowns, has adversely affected trade, economy and civic life in Karachi.
There are a number of factors attributed to the bleak scenario presented for electric supply in Karachi these days. First and foremost is the shortfall in power generation capacity of KESC that was not allowed to enhance its installed capacity, whereas its existing capacity de-rated over a period of years. Second, its transmission and distribution network is ill-maintained, outdated and inadequate. Then, there are extremely high system losses —over 40 per cent— mainly due to large-scale theft across the distribution network.
In short, the KESC is at present confronted with power crisis, as it has not been able to cater to the growing power needs in its jurisdiction that is spread over a total area of about 6,000 square km. The inordinate delay in its privatization process going on since 1997 has further worsened the situation.
The transmission and distribution network dates back to the 1960s, although KESC has been progressively replacing partially the older facilities until the 1990s. In 1992, additional 13 grid stations were constructed by the KESC under UK grant. Since then there has been no additional investment in this direction though power load increased manifold. It is only in recent times that KESC has planned to expand its existing distribution facilities. A total of 12 grid stations are to be established in Karachi. Out of these, order for three grid stations has been placed recently.
Currently the integrated utility company has an installed capacity of generating 1,756 MW (megawatt) electricity. But the actual power generation capability of KESC-owned power plants is around 1,400 MW, which is much lower than actual demand in its licensed area.
To meet the supply-demand gap, KESC purchases 250 MW power from the two IPPs (Independent Power Producers) located in Karachi, namely Tapal Energy and Gul Ahmed Energy. In addition, PAEC’s Karachi Nuclear Power Plant (KANUPP) and Pakistan Steel Mills supply 80 MW and 20 MW electricity respectively to the KESC.
Also, Wapda provides additional 500 MW electricity to the KESC that has interconnection with Wapda’s transmission and grid system. During the year ending June 30, 2004, KESC system generated and purchased a total of 13,392 GWh (gigawatt-hour) electricity, managed to sell only 7,818 Gwh to its 1,749,473 industrial, commercial, agricultural and domestic consumers, and lost the rest to theft and system inefficiency.
Having resorted to these arrangements, KESC has managed to meet power needs of Karachi so far. But with a 6—7 per cent yearly increase in demand and with no growth in its generation capacity in sight, or that of the IPPs, it may find it more difficult to meet the challenge any further.
The situation is further compounded because of the fact that the useful life of KESC plant and machinery has been depreciated to the extent of nearly 60 per cent, and many of its power units would be retiring shortly. One unit of Korangi thermal power station retired in 2002-03, whereas another two units will retire in 2004-05 and 2007-08.
Likewise, Korangi Town gas turbine power station will retire in 2007-08, and SITE gas turbine power station in 2008-09. Two units of Bin Qasim power station are due to retire in 2013-14 and 2014-15, whereas KANUPP is scheduled to retire in 2005-06. Due to increased load in its own area, the Wapda will also not ensure continuity of power supply to the KESC as Wapda itself would face power shortage in its system beyond 2005.
Not that power shortage in Karachi should have come as a surprise to anyone. In fact, the policymakers were aware of it. It was projected in 2002 that Karachi would have acute shortage of electricity to the level of 394 MW in 2005 and 506 MW in 2006, as no new projects, either by the KESC or the private sector were under construction in the area.
Pakistan Economic Survey 2002-03 too highlighted power shortage of 500 MW in 2005-06, according to normal power load. Consequently, Power Policy was announced in October 2002, and duly implemented. The Private Power and Infrastructure Board (PPIB) acted in time to solicit proposals from private sector to set up power plants, especially in Karachi, on priority basis.
In response, a fast-track project was proposed by an American company along with Pakistani partners in July 2004. The barge-mounted power project, which was envisaged as a gas-based combined cycle unit of 200 MW capacity, was to be set up at Port Qasim, Karachi at an estimated cost of $150 million.
The Ministry of Petroleum and Natural Resources made firm commitment for supply of required quantity of pipeline quality gas from existing network for initial period of five years.
In spite of full facilitation by the PPIB and support extended by government, the sponsors failed to meet the deadline for requisite procedural and legal formalities, that was extended a number of times. The Project was scheduled for commissioning by April 2006.
Several power projects are planned to deliver additional electricity to the KESC grid. These include three thermal power plants. The government of UAE had gifted in August 2004, a gas turbine power plant with a cumulative capacity of 512 MW that had completed 15 years of its operational life. One of the units of 312 MW capacity will be installed in Karachi, and the remaining 200 MW capacity in Faisalabad. The plant is yet to be dismantled, transported and relocated to these sites.
Obviously, the plant machinery will require major overhauling and refurbishing, which, in turn, will heavily depend on availability of required spare parts that has not yet been ascertained. In any case, the whole exercise to put the plant in operation again will entail reasonable time and significant amount in foreign exchange and local currency. As more than a year has already passed without any progress on Pakistan side, a realistic timeframe for its going on stream, if at all feasible, can not be estimated at this stage.
The 80-MW power plant being installed by the Defence Housing Authority, which is scheduled to be completed in 2007, will hardly provide any relief to the KESC. To recoup its de-rated power generation capability of about 400 MW, KESC will therefore undertake extension of Korangi power station, by adding another 350 MW combined cycle power plant. The project feasibility study was conducted years ago and KESC had sought project approval in November 2004.
In a belated move, the government has given go-ahead signal to the KESC only recently. It is expected that the contract for project construction would be awarded on internationally competitive basis. The plant, costing $240 million, will take five years, from now on to be operational.
Under the circumstances, it seems, KESC will have to pin all its hopes on the forthcoming IPP project, namely Western Electric Power. The 150-MW capacity plant, which is to be constructed at a cost of $112 million, is based on diesel engine technology using natural gas as primary fuel. It is scheduled to go into operation by early 2008, in case tariff negotiations are finalized within a month or so, which were delayed due to on-going KESC privatization process.
Another project, Fauji Korangi Power Project with a capacity of 150 MW is to be installed in Karachi by Fauji Foundation, for which feasibility study has recently been completed and approved by the PPIB. In case everything moves as per schedule, this dual-fuel gas-fired power project will be commissioned earliest by the end of 2008.
In conclusion, there is no respite for Karachiites in coming years, as far as power shortage is concerned. According to a recent study conducted by foreign consultants, electricity demand in Karachi will go up from actual 2,023 MW, as in June 2004, to 2,502 MW forecast for the year 2008. Thus the demand load will be much higher than firm supply from overall KESC system at that time, under the given conditions, resulting in larger supply deficit.
UNDECLARED load shedding by KESC is a matter of routine and quality of consumer services remains poor. Interruption of water supply and industrial production, as a result of frequent power breakdowns, has adversely affected trade, economy and civic life in Karachi.
