Pakistan’s power generation up 2.3%, but reliance on furnace oil decreases

Published: December 21, 2017
SHARES
Email
The fuel conversion project will convert furnace oil into diesel, jet fuels and kerosene.
Photo: File

The fuel conversion project will convert furnace oil into diesel, jet fuels and kerosene. Photo: File

KARACHI: Power generation through furnace oil and hydel reduced 51% and 22%, respectively, in November year on year although overall generation increased by 2.3% in the month, according to data released by the National Electric Power Regularity Authority (NEPRA).

The energy mix witnessed a major change as Re-gasified Liquefied National Gas (RLNG) and Coal-fired power plants produced greater energy in November. Power generation increased by 2.3% year on year 6,994 GWh during November 2017 compared with 6,840 GWh during the same month last year.

The change in the energy mix comes as Pakistan decides to opt for low cost fuels in producing energy.

Refineries weigh option of furnace oil export

Coal based generation increased by 40% month on month to 962 GWh due to induction of Port Qasim Coal Power Plant. Gas based generation also went up by 5.6% month on month, however, hydel, furnace oil, RLNG and nuclear based generation decreased by 9.3%, 74.5%, 55.1% and 24.3%, respectively.

Reducing dependence on furnace oil

For over two decades, furnace oil plants have played an important role in the energy mix of Pakistan. However, the situation is fast changing as the country is increasing the share of other fuels like RLNG, Coal, Nuclear etc.

Pakistan Prime Minister Shahid Khaqan Abbasi ordered immediate closure of eight furnace oil-based power plants of over 4,000 megawatts with the start of coal and LNG-based plants of over 5,000 megawatts by the end of October 2017.

However, this has created a serious crisis for petroleum refineries.

Refineries are trapped in the worst operational crisis in the country’s history due to government’s inefficiency and poor planning, and its latest decisions are compounding the problems instead of resolving them, say industry officials.

The refineries, which meet 30% of the country’s needs, are feeling suffocated following excessive imports of furnace oil and liquefied natural gas (LNG) to run power plants.

IPPs urge prime minister to resolve overdue payments issue

With these imports, almost all the oil storage facilities in the country are filled to capacity, including those maintained by the state-owned Pakistan State Oil (PSO). This glut has virtually closed down the refineries. Despite the grave situation, the government has continued to allow furnace oil and LNG imports instead of reviewing its policy in order to give some space to the domestic refineries.

The government, later in December, allowed resumption of work by some furnace oil-based power plants – including two big plants Hub Power and Kot Addu – but they were told to consume only imported furnace oil and not the domestic fuel.

Published in The Express Tribune, December 21st, 2017.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Leave Your Reply Below

Your comments may appear in The Express Tribune paper. For this reason we encourage you to provide your city. The Express Tribune does not bear any responsibility for user comments.

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments FAQ.

More in Business