German bank questions claim of power sector turnaround

ISLAMABAD: A German state-owned development bank has questioned the power ministry’s claim of tur­ning around the power sector through efficient generation and effective control, terming it “politically influenced”.

In a policy paper released here, the KFW acknowledged that Pakistan’s power generation had improved in recent years, but asserted that it came from three new power plants initiated before the current government came to power in 2013.

Conversely, the bank said, three major public sector power plants — Muzaffargarh, Jamshoro and Guddu — cumulatively underperformed over the past three years and produced fewer electricity units last year, compared with 2010 and 2013.

The bank said the power ministry’s recent announcement that “with a 25 per cent increase in power generation since 2013, we have touched 16 billion units annual generation in 2016, thanks to efficient fuel consumption regime and effective controls” had attracted its (KFW’s) attention.

KFW terms ministry’s announcement ‘politically influenced’

The KFW said it had special interest in promoting system efficiency and, therefore, decided to analyse such high efficiency gains in a short period based on all figures taken from Power System Statistics 2015-16, 41st Edition Planning Power of NTDC — a subordinate company of the power ministry.

The German bank said that “achieving generation efficiency as high as 25pc is applauding indeed” as the public sector generation increased by 3,243GWh (gigawatt hours) to 16,103GWh in 2016, compared to 12,860GWh in 2013. But the question is: “Was this growth entirely due to efficient fuel consumption regime?”

The KFW said the number of government-owned thermal power stations was 10 in 2013. In 2014, three new units were added to the thermal power station (TPS) Guddu, and TPS Nandipur came on line. This addition does not qualify as efficient fuel consumption regime. “In 2013 and 2016, all these stations have been burning natural gas as a primary fuel,” the bank said.

In contrast, it added, a significant declining trend was seen in the amount of power generated by these three big plants since 2010.

All these stations have been rehabilitated under a USAID programme in recent years and yet produced significantly fewer units in 2016 than in 2010.

The research paper said the TPS Guddu (1,655MW — Pakistan’s largest thermal power station) had been generating fewer units since 2010 or even in 2012. In fact, it generated even fewer units in 2016 than in 2015. “This station simply cannot be presented as an icon of performance,” it said, adding that the TPS Guddu produced more than 7,000GWh in 2010, which declined to 5,000GWh in 2013. It produced about 3,500GWh in 2016.

On the other hand, the TPS Muzaffargarh (1,350MW) could generate over 5,000GWh in 2014, but fell off the bar in 2015 only to surface a little above the bar again in 2016. Still its generation remains far below the benchmark year of 2010.

According to the German bank, the TPS Jamshoro (850MW) showed a bit of success in 2014, a dip below that line in 2015, and struggling again to reach up to a 4,000GWh mark. The plant had shown an increase of only 675GWh (rather than 3,243GWh) since 2013, which could possibly be attributed to “efficient fuel consumption regime and effective controls”, it said.

Question mark

These numbers put “a question mark on the ministry’s claim that after years of mismanagement and losses by the government-owned thermal power generation companies, we have now entered an era of performance and delivery”.

The KFW said the increase in generation came from two additions to the system, generating 1,246GWh, as well as another 1,322GWh from the Nandipur power station.

“Construction of all these units began before 2013. They became operational recently and hence the performance of these new plants cannot be taken as an example of efficient fuel consumption regime and effective controls,” the KFW asserted.

It said that such an announcement by “a technical ministry may be politically influenced”, but this should not undermine the importance of introducing better overall management in Gencos (generation companies) for optimising the much-needed efficiency. “After their useful life, these fossil-fuel-burning plants need to be retired in favour of more efficient, preferably renewable energy plants,” the KFW study concluded.

Courtesy: DAWN NEWS
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