The federal government has given the go-ahead to K-Electric and state agencies for signing a power purchase agreement for additional supply of 450 megawatts of electricity on an interim basis for the next two years from March 2021 in a bid to overcome power outages in Karachi.
K-Electric had requested the government for the provision of additional electricity from the national grid to manage the company’s demand and supply gap effectively during the high demand period in summer months of 2021 and 2022.
K-Electric had also said its demand stood at 3,600MW and assuming demand growth of 7-8% in the coming year, there would be a shortfall of 300-400MW in the summer of 2021 despite the incoming Bin Qasim Power Station (BQPS-III, unit-1), which would result in net capacity addition of 250MW considering the decommissioning of old units.
Therefore, the company had requested the provision of additional 350-450MW of electricity from the national grid in addition to the existing base load capacity of 1,650MW. Meetings were held among the Power Division, National Transmission and Despatch Company (NTDC), Central Power Purchasing Agency-Guarantee (CPPA-G) and K-Electric for the supply of additional power from the national grid during the high demand period in the summer of 2021 and 2022 with modification and reinforcement in the existing interconnection.
Some interim arrangements were discussed by the stakeholders in that regard. It was discussed that the interim arrangement would be for additional power supply of 350-450MW to increase the existing base load capacity to 1,100MW for the summer months of 2021 and 2022.
Furthermore, K-Electric proposed that the arrangement should be temporary and available till the construction of its 220-kilovolt Dhabeji grid station and a new 500kv grid station.
The stakeholders discussed that the temporary arrangement would require some modification in the configuration and implementation of cross-trip scheme in the K-Electric’s network to manage the additional power supply.
As agreed between K-Electric and NTDC, the former had engaged a private independent consultant to assess the viability of temporary supply proposal and determine any reinforcement scheme in K-Electric’s network within three months.
The plan was submitted in a recent meeting of the Cabinet Committee on Energy, which reviewed the additional power supply of 350-450MW to K-Electric.
It was informed that in order to proceed further, the power utility and relevant agencies would require to ink a tripartite power purchase agreement. The cabinet committee gave directives that the agreement should be inked.
The cabinet body directed K-Electric and NTDC to start making necessary transmission arrangements for the supply of additional electricity immediately to ensure the availability of power to Karachi in time for meeting its demand.
It was also suggested that all necessary arrangements must be made for the supply of additional power before the next summer season in Karachi.
The cabinet body decided that K-Electric, CPPA-G and NTDC would ink a tripartite power purchase agreement within one week while keeping financial settlement clauses in square brackets with the CPPA’s proposed language.
These clauses will be finalised before December 2020 in accordance with the decision of the Economic Coordination Committee (ECC) on K-Electric issues.
Published in The Express Tribune, September 4th, 2020.
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