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Rs150bn loss at generation stage alarms Nepra

January 25, 2018

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A file photo of Muzaffargarh Thermal Power Plant.
A file photo of Muzaffargarh Thermal Power Plant.

ISLAMABAD: Expressing serious concerns over the dismal performance of public sector generation companies (Gencos), the National Electric Power Regulatory Authority (Nepra) estimated loss of more than 15 billion electricity units — way beyond permissible limits — in two years.

The cumulative revenue losses on account of the higher than auxiliary consumption of 15bn units by Gencos are estimated at around Rs150bn.

In its Performance Evaluation Report (PER) based on 2014-15 and 2015-16 data provided by Gencos on quarterly basis and finalised under the Performance Standard Rules 2009, Nepra noted in a nutshell: “A poor state of affairs at Gencos resulting from equipment deterioration, lack of scheduled and preventive maintenance, insufficient technical expertise and poor management”.

It said a total of 15.16bn units (kWh) were lost beyond committed standards or targets on account of auxiliary consumption, standby consumption or outages.

During the years 2014-15 and 2015-16, all Gencos consumed excess auxiliary power over the allowed limit with an energy loss of around 668 million units during service mode. Almost half of these losses were contributed by Thermal Power Station (TPS) Muzaffargarh (Genco III).

The data provided by Gencos showed that certain gas-based power stations such as GTPS Kotri, GTPS Faisalabad and SPS Faisalabad remained on standby mode for most part during the years 2014-15 and 2015-16, thereby “squandering the potential to generate significant amount of economically efficient energy”.

Older plants, poor management are at fault

On top of that, the machines of Genco I, II and III had drawn around 382m units energy during standby mode under the head of auxiliary power consumption. Almost 82 per cent of the total energy consumption under standby mode was contributed by GTPS Faisalabad (Genco III).

Moreover, the data indicated that few machines of TPS Jamshoro (Genco I), TPS Guddu and Guddu 747 Combined Cycle Power Plant (Genco II) and TPS Muzaffargarh, GTPS Faisalabad, SPS Faisalabad and CCPP Nandipur (Genco III) had violated the allowed limit of total outages (planned/unplanned) as per their respective Power Purchase Agreements (PPAs) signed with the National Transmission and Despatch Company.

“Had this limit not been exceeded by these machines and had they remained in operation during that period, a huge amount of energy – around 14,109m unit could have been produced by them”, Nepra noted.

Talking about the availability factor (AF), the regulator said that Genco data revealed that on an average, the AF for TPS Guddu (Genco II) remained quite low at only 43pc in 2014-15 and 45pc in 2015-16, against guaranteed availability of 80pc.

Similarly, CCPPs such as Guddu 747 and Nandipur could not achieve the guaranteed availability as specified in their respective agreements due to huge number of planned and unplanned outages. For example the AF for Nandipur power plant remained around 71pc in 2015-16 against the guaranteed availability of 82pc, whereas, the AF for Guddu 747 remained around 65pc against the guaranteed availability of 80pc.

Lakhra Power Station (Genco IV) showed the worst results in this regard as its AF remained at mere 26pc in 2014-15 and 25pc in 2015-16. The regulator said that although the availability factor of GTPS Kotri, GTPS Faisalabad and SPS Faisalabad appeared within the acceptable range, but most of the time these power stations remained on standby mode due to which their potential was not utilised.

Regarding net capacity factor (NCF), the regulator said that on an average, NCF for TPS Guddu, GTPS Faisalabad, SPS Faisalabad and Lakhra Power Station remained quite low — 2-22pc during the fiscal year 2014-15 and 2015-16 — implying that most of the time, these power stations remained either on standby mode or outage mode.

It said the net output factor (NOF) for TPS Guddu remained at worst productivity level at only 36pc during 2015-16 due to non-contribution of energy by Units 2, 4, 9 and 13, having a combined net capacity of 460MW. These units remained on unplanned outage throughout 2015-16. “This clearly speaks of poor management and lack of technical expertise,” the regulator noted.

The regulator pointed out that the energy availability factor (EAF) was not equal to the AF in case of TPS Jamshoro, TPS Guddu, TPS Muzaffargarh and SPS Faisalabad, which showed that their net capacity was temporarily reduced due to equivalent planned or unplanned de-ratings.

It said the generation cost dropped because of lower fuel prices but despite this significant decline in per unit rate, the average utilisation factor of these power plants remained low during 2015-16, like 57pc for TPS Jamshoro and 48pc for TPS Muzaffargarh.

Similarly, the per unit rate of gas-based power plants, such as TPS Guddu and GTPS Faisalabad remained very low (between Rs5-7 per unit) but the average utilisation factor of these power stations also remained very low during 2015-16 — only 11pc for Guddu and 15pc for Faisalabad. “This indicates that the benefits of reduction in fuel prices were not utilised,” Nepra noted.

Published in Dawn, January 25th, 2018

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