ISLAMABAD: Expressing concern over the upcoming large-scale coal-based power projects, the power regulator has highlighted inadequacy of the existing and planned transmission and distribution system to absorb planned generation capacity.

In its flagship “State of Industry Report 2015”, the National Electric Power Regulatory Authority (Nepra) has expressed serious annoyance over the poor performance of K-Electric in increasing its committed generation capacity and its dispersal weaknesses.

The power regulator has also termed the import of 650MW by KE from the national grid as “illegal and unlawful” although it has been approving every month its generation costs in KE’s consumer tariff.

In a departure from its past practice, the Nepra has shared the report with the Ministry of Water and Power for vetting in view of a serious controversy its report of last year critical of government efforts had triggered.

No wonder then, the report praises the power ministry’s monitoring of the power sector particularly real time vigilance of power flows to the extent of feeder level for improved supplies, lower load-shedding and improved financials of the distribution companies. At the same time, it criticised the government for slow movement on power sector reforms leading to a competitive market as envisaged in 1992 reform plan.

The report said the new generation planned if materialised was expected to reduce power deficit to a negligible level by 2017 at the peak time only while no load-shedding during other times will be required. “It is evident that more than 10,000MW will be surplus to the demand requirement by 2021 which will essentially be required to maintain necessary reserve and operating margins in the system as per international practices,” it said. Total installed capacity would increase from current 23,617MW in 2016 to 48,280MW by 2021.

On the same parameters, the regulator said KE would continue with 565MW shortfall in 2017 even after including 650MW import from the national grid. This implied that “KE will barely meet its requirements by 2019 provided that additional generation capacity is timely achieved”.

For the national grid, the Nepra said the “transmission and distribution are hardly adequate to meet the existing requirements and have little or no potential to absorb planned generation in the South”. It is therefore imperative that transmission and distribution systems be strengthened and stabilised besides completing new transmission and distribution systems planned to transmit electricity generated by upcoming projects.

Nepra said KE despite having the generation capacity has continuously been carrying out load-shedding for certain consumer categories. Also the KE has been reporting satisfactory performance in relation to performance standards, “the crises in K-Electric territory in June 2015 have proved otherwise”. It said the Nepra findings into the issue had brought out some real concerns about the KE health which are required immediate attention with reasonable investment in transmission and distribution network.

Moreover, the KE was required to increase its generation capacity by 1,000MW under its licence condition. It added 1,034MW in the system but decommissioned or permanently closed 685MW of existing capacity, which meant “effectively about 349MW has been added by KE.”

It recognised that due to better load management policies, fewer agitations and protests were witnessed during 2014-15 especially in the later part of the year. “Not only improvement in uninterrupted supply to the industrial sector has been ensured, load shedding in the domestic and commercial sectors remained somewhat predictable whereas unscheduled load shedding hours have been considerably reduced”, it said adding the ability of Discos to have accommodated and distributed more than 16,000MW this year showed an improvement over the previous year.

Because of a combination of factors particularly lower international oil prices, the average electricity cost had dropped to Rs9.84unit in 2015 from Rs10.59 per unit (kWh) in 2014. As furnace oil based energy cost reduced by Rs3.43 per unit with 33pc contribution, an overall impact of reduction in cost was noted at Rs88bn in 2015.

The regulator while held that coal based plants would help contain electricity tariff, induction of large-scale coal plants would affect the environmental balance due to various issues related to coal power like emission levels and disposal of ash. Also, construction of so many such plants in the mid-country would required a robust transportation system for continued coal supply. Efforts on a war footing are also required for the development of infrastructure at port and transmission lines for RLNG to upcountry power stations.

Published in Dawn, May 20th, 2016