Audit of inefficient plants halted

ISLAMABAD:

After an exercise of around six months, an energy audit of inefficient power plants has come to a halt as textile and other industries have obtained a stay order from Sindh High Court.

In July last year, the Cabinet Committee on Energy (CCOE) had authorised National Energy Efficiency & Conservation Authority (NEECA) to conduct energy efficiency audit of captive power plants.

The government has also recently decided to disconnect gas supply to captive power plants and shift them on the national grid.

Following decision of CCOE, NEECA started the process of conducting audit of captive power plants. Meanwhile, the industry started building pressure on it to put the audit on hold. In this regard, the All Pakistan Textile Mills Association (Aptma) had also written a letter to put the audit on hold.

Officials said that only 60-70% of the captive power plants had submitted their records during the process, while the rest had refused to do so. They said that the government was not aware of the technology being used by the captive power plants and where the plants were consuming gas.

During a meeting of cabinet body on energy last week, the Petroleum Division secretary had informed that there were 1,211 captive power units on both utilities’; Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines (SNGPL), network consuming about 415 mmcfd gas.

Out of these, 610 units were in export industry and 601 units were in non-export industry. He also informed the committee about the current gas and RLNG tariff being charged to captive power units.

Special Assistant to Prime Minister on Petroleum (SAPM) on Petroleum Nadeem Babar informed the meeting that during November 2020 a series of meeting were held in the Prime Minister’s Office with Power and Petroleum Divisions on the shortage of gas and mitigation measures.

He said that the export sector on SSGC network received consistent gas supply throughout winter and no load-shedding for even a single day was exercised. However, on the SNGPL network, the export sector was curtailed gas supply for only one day. It was stated that exemption criteria may cautiously be exercised to block any loopholes.

During the said meetings it was advised that in view electricity surplus situation the captive power units may be asked to shift on the electricity grid so that gas savings could be utilised for other sectors of the economy.

Accordingly, the Petroleum Division had drafted the proposals in this summary which were already discussed between Power and Petroleum Divisions.

He further stated that captive units had efficiency of 30-38%, which was much lower than efficient Independent Power Plants (IPPs) who have efficiency of 50-62% and thus these units were generating more power at less gas utilisation than captive units.

He also informed that an energy efficiency audit of captive power units had been approved by CCOE a few months ago under which NEECA was authorised to conduct audit but the captive units have gotten stay orders from the court of law and were not allowing NEECA to conduct energy efficiency audit.

SAPM on Power Tabish Gohar was of the view that the decision of disconnecting gas supply had remained under discussions for the past many months. He clarified that stay orders were being granted against NEECA for conducting energy efficiency audit so the same was not against the Petroleum Division as was being misconstrued.

He stated that gas/RLNG should be utilised by the efficient power plants instead of captive units, which should take electricity from the grid for their power needs.

The CCOE considered the summary and approved to place moratorium on supply of gas to industrial units for self-generation of electricity with the some modifications/directions.

For captive power plants connected with the power grid (having electricity connections), date for disconnection of gas supplies to non-export industry power plants will be February 1, 2021. Secondly, the date for disconnection of gas supplies to plants (export industry) would be March 1, 2021.

Thirdly, for those units that have electricity connections but the sanctioned load is less than their requirement, they shall be required to immediately apply for enhancement of load and the respective distribution company shall be required to provide such enhancement expeditiously.

Until such enhancement, they shall be provided gas, provided they shall first fully utilise their existing sanctioned load and once the load enhancement is done, the gas connection will be disconnected.

Fourthly, before disconnecting gas supply to these industrial units, the relevant distribution company would confirm in writing its technical ability to serve the sanctioned power load.

In the case of captive power plants that are not connected with the power grid, they shall submit application to their respective distribution company for connectivity to the grid by March 31, 2021.

The distribution companies shall expeditiously process the applications and in any case before December 1, 2021. Until the electricity connection is operative, the gas companies will not disconnect gas supplies to such units, which have applied for a connection by the due date (March 31) and have not been provided the same by the distribution company.

For captive power plants that have a co-generation unit, it shall make such declaration latest by February 1, 2021. NEECA will conduct a third-party audit of all such captive power units (export/non-export) claiming to have co-generation facility within three months in order to avoid rent seeking capacity against continued gas supply to such units. If the audit confirms co-generation facility, gas supply will continue, otherwise it will be disconnected. The Power Division shall finalise the detailed and transparent mechanism for third party audit within one week.

Published in The Express Tribune, January 27^th, 2021.

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