Industrial units: OGRA stays away from audit of captive power plants

Agrees to provide technical assistance in energy efficiency appraisal.

ISLAMABAD:

The influential textile lobby has got some relief as the Oil and Gas Regulatory Authority (Ogra) has refused to get involved in the energy efficiency audit of captive power plants, saying the exercise could not be called “a regulated activity”.

The oil and gas industry regulator, however, has agreed to play the role of a supervisory body and oversee implementation of the decision of the Economic Coordination Committee (ECC) by state-owned gas transmission and distribution companies – Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines (SNGPL), sources say. Ogra will provide professional and technical assistance to the two companies.

Around 150 big industrialists are receiving over 400 million cubic feet of gas per day for their captive power plants, which are termed inefficient. The National Accountability Bureau has described it as a criminal act at the cost of efficient power plants, which were shut down due to shortage of gas.

The previous government had also tried to initiate energy efficiency audit of the captive power plants – installed by industrial units to produce their own electricity – but could not push ahead because of influence of the textile lobby.



According to sources, in an ECC meeting held on November 13, the participants recalled that the committee had directed the Cabinet Division in January to explore the role of Ogra in the energy efficiency audit of captive power plants and natural gas boilers. However, Ogra did not want to be part of the process, arguing that the audit of plants was not a regulated activity in terms of Ogra Ordinance 2002.

Ogra was of the view that it considered the energy efficiency audit a specialised job, which should be conducted by specialised audit companies comprising technical, financial and legal experts equipped with relevant experience and accreditation from international organisations.

It suggested that the Ministry of Industries, which formulates policies and promotes and expands the industrial sector, may supervise the energy efficiency audit. Enercon, which is part of the Ministry of Water and Power and works for energy conservation and efficiency, may also be engaged for the task.

However, Ogra’s role was limited to regulation of the midstream and downstream petroleum industry under Ogra Ordinance 2002, it added.

Talking to The Express Tribune, Ogra Chairman Saeed Khan said gas distribution companies and industrial units running captive power plants had engaged into agreements for the audit, therefore it could not be regulated.

“Ogra cannot conduct the audit, but it has offered to become part of the committee to provide assistance,” he said.

In the ECC meeting, the participants pointed out that the Ministry of Water and Power had been asked to offer its views and comments, which were awaited.

Meanwhile, the prime minister has expressed his desire that the Cabinet Division should come up with its proposals suggesting solution to the problem and a plan to develop capacity of the bodies working under the division. However, the capacity building push, aimed at carrying out regular energy efficiency audits to bring transparency, should not be limited to Enercon.

The Cabinet Division proposed that since it lacked technical expertise, a committee should be constituted headed by the water and power ministry secretary and comprising representatives of the Ministry of Industries, Ministry of Petroleum and Ogra.

The body would formulate concrete proposals to promote energy efficiency and develop a viable plan for building the capacity of related institutions.

It would have the option to bring in its fold representatives from other ministries and divisions and would submit a report to the ECC in a month’s time.

Published in The Express Tribune, November 27^th, 2013.

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