Out of the frying pan? – Notice
Pakistan’s electricity sector appears to be a victim of déjà vu. Last year, the country was hit by a fuel shortage that hampered power generation and saw long lines of cars lined up outside pumping stations. A full investigation was launched into the reasons for the incident, which led to the ousting of Prime Minister Nadeem Babar’s special assistant.
This year, an equally precarious situation threatens to disrupt the electricity sector. Maintenance of the Qadirpur gas field supplying fuel to SNGPL was abruptly scheduled, resulting in a shortfall of around 200 million cubic feet of gas (mmcfd) – nearly 25-30% of power generation needs. SSGC also announced its own closures on the Kunnar-Pasakhi Deep field, which will bring a shortfall of 170 mmcfd to SSGC’s quota. At the same time, the Tarbela dam is also under maintenance and is operating in a sub-optimal manner, which reduces the contribution of hydropower to the national production mix.
Added to this problem is a shortage of heating oil supplies. Ironically, the historically low demand from the electricity sector (due to the reliance and utility of RLNG) has been cited as a reason by oil marketing companies (OMCs) to reduce their fuel oil consumption, pushing refineries to reduce their production. Almost as in response, the dry docking of the Floating Storage and Regasification Unit (FSRU) is scheduled for the end of June. Scheduled to last until the first week of July, this activity will also reduce the amount of RLNG imported into the country.
Two weeks ago, Nepra called a hearing of the CEOs of all distribution companies (nightclubs) and K-Electric, seeking an explanation for the current load shedding across the country. A production shortfall had been triggered by maintenance work on two turbines at the Tarbela dam, but different sources reported different numbers of reduced megawatts. Official sources cited 1,500 MW while others said the deficit was actually 6,500 MW.
In addition to reduced generation, inadequate transmission capacity of the national grid and theft of electricity have compounded the problem. Nightclubs were unable to draw their allocated electricity quotas, resulting in power cuts ranging from 3 to 20 hours in different parts of the country. PKR 347.435 billion had been invested by the 10 nightclubs over a period of seven years to improve their transmission and distribution losses, but the colossal investment had generated only an insignificant decrease of 0.9%.
It appears the country is yet to get out of the pan, but is heading for the blaze as reports began to point to a shortage of RLNG, fuel oil and water – three of the biggest sources of electricity production for the country.
SNGPL also pledged the availability of 300 MMCFD RLNG against a requirement of 900 MMCFD; even this 300MMCFD is not a firm commitment. The maintenance activity itself normally takes 3 weeks, but at the request of the Oil and Gas Development Corporation Limited (OGDCL), the work is accelerated to be completed in 8-9 days. This is an optimistic timeline, and we hope it is realistic as well.
Maintenance of the hydroelectric turbines is usually scheduled for winters, but surprisingly two units at the Tarbela dam had to be shut down for maintenance work during the peak of summer, causing the shortfall early on. of the month and resulted in a load shedding for citizens all over the world. Pakistan. In a meeting between the chairman of the Indus River System Authority and the secretary of the Energy Division, the chairman made it clear that it would not be possible to increase production from the Tarbela and Mangla dams before August due to a number of external factors. In addition, the increase in outflows from Mangla would be at the expense of the quota allocated to the Rabi harvest for Sindh and Punjab.
Heating oil is also affected due to the import ban since 2019. If the country’s thermal power plants are to use heating oil to operate, it is imperative that they have sufficient stocks to meet the requirements. But using additional heating oil to fill the production gap will deplete that inventory more quickly. Without an adequate replacement rate, this will continue to make the problem worse.
Thus, we are in a situation where our cheapest sources of generation will be underperforming, and without RLNG, natural gas or fuel oil, the only option left to the government will be to operate high speed diesel power plants (HSD). ). HSD is an expensive source of fuel and its use will invariably increase the cost of electricity for end consumers as the additional charges will be recouped through fuel cost adjustments in bills. It appears that the current circumstances are not only trapping DISCOs between a rock and a hard place, but consumers across the country as well – on the one hand, they will have to pay higher electricity costs; on the other hand, they will have to bear the excess load shedding. It’s also important to mention that not all of the company’s power plants can operate on a dual fuel arrangement. This means that even using the HSD to generate electricity may not be able to fill the gap caused by a lack of primary fuel supply.
This is a very precarious situation, especially as temperatures are expected to increase as well as humidity levels during the monsoon, resulting in a corresponding increase in demand for electricity. Could planning and better governance have prevented this announced deficit?
It is also alarming that Pakistan still has to contend with these shortages despite having invested heavily in increasing production capacity. There has also been an almost 20% increase in electricity demand in the last 11 months of FY21, but there is still more generation available in the country. But with this simultaneous shortage, all government investments will be in vain. This includes the $ 800 million invested by the government over the past 2.5 years to improve the transmission and distribution system, and the $ 117 million planned for the coming year.
It is regrettable that despite the efforts of all stakeholders to support Pakistan’s energy sector, unexpected setbacks continue to prevent the sector from realizing its full potential. We seem to go from one crisis to another. The current situation requires the intervention of all relevant stakeholders and government ministries to prevent it from escalating into a nationwide crisis. The citizens of the country have already suffered from excessive load shedding; it is time for the government to step in and use its resources to support them at this critical time.
Copyright Business Recorder, 2021