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Captive power plants may get relief

October 26, 2012

ISLAMABAD, Oct 26: The government is planning to provide efficiency relaxations to captive power plants and a summary is expected to be taken up in the next meeting of the Economic Coordination Committee (ECC).

Incidentally, the petroleum ministry and the Planning Commission had stated earlier that captive power plants operating at the textile units were inefficient and were consuming nature gas in bulk quantity.

However, the ECC meeting held on Oct 23, 2012 decided to lower the efficiency benchmark for captive power plants.

“The ECC has, in principal, agreed to lower the efficiency benchmarks fixed for captive power plants and boilers used by the textile industry other than the IPPs for qualifying availability of gas from the SNGPL and the SSGC,” an official of the textile ministry told Dawn.

The petroleum ministry had submitted a summary on policy guidelines for energy efficiency audit of captive power plants and natural gas boilers.

The benchmarks that had been approved require that the plants operate on at least 60 per cent benchmarks, and combined cycle applicable to above 50MW capacity power plants were required to operate at 50 per cent benchmarks.

However, the gas utility companies have recommended revising the guidelines as fixed efficiency benchmarks were not achievable.

The revised efficiency benchmark also include relaxations related to penalties and sale of surplus power to distribution companies, grace period, audit fee, etc.

The ECC has agreed, in principal, that efficiency benchmarks for gas engines, gas turbines based on co-generation technology be brought down from 60 per cent to 50 per cent.

Efficiency benchmarks for the combined cycle power plants applicable to above 50MW capacity power plants have been suggested to be brought down from 50 per cent to 42 per cent and for boilers the new efficiency benchmark are suggested to be 38 per cent.

However, a formal approval of these new efficiency benchmarks have been delayed as the Ministry of Water and Power and the Ministry of Textile Industry have sought time to submit their comments.

These energy efficiency benchmarks would not be applicable to Independent Power Plants set up in the country under Power Policy 1991, sources added.

Sources maintained that during the last ECC meeting it was informed that stakeholders mainly the textile industry and other industrial concerns operating these captive power plants have approached these gas companies and have challenged these efficiency benchmarks and informed that these are faulty and could not be achieved in Pakistan.

A Planning Commission report recently stated that captive power plants were benefiting only 113 units and they were consuming around 445 mmcfd gas.

The Planning Commission had also said that the gas being provided to captive power plants at cheaper rates needed to be diverted to power generation for national grid.