Home »Editorials » Gencos: poor performance
In yet another report, this time compiled by National Electric Power Regulatory Authority (Nepra), the performance of four public sector generating companies has been severely criticised for the worst-ever performance in 2012, 2013 and 2014 namely Jamshoro Power Company Limited (Genco-1), Central Power Generation Company Limited (Genco-II), Northern Power Generation Company Limited (Genco-III), and Lakhra Power Generation Company Limited (Genco-IV).

This claim substantiated by data is very damning and points out the seven areas of serious concern: (i) Gencos I, II, and III consumed excess auxiliary power over the allowed limit with an energy loss of 777 kwh accounting for a financial loss of 11.69 billion rupees for the three years with Genco-III accounting for half of that loss; (ii) at least three gas-based power stations remained on standby mode for the major part of the three years and Gencos I, II and IIII drew around 763 million kwh energy during standby mode under the head of auxiliary power consumption that accounted for 6.04 billion rupees loss; (iii) Gencos I, II, and III violated the allowed limit of planned and unplanned outages that was specified in the Power Purchase Agreements signed with NTDC; (iv) the availability factor remained as low as 39 percent for the three years; (v) Net capacity factor remained very low mostly for the gas-based power plants; (vi) net output factor was very low that indicates lack of maintenance; and (vii) RFO-based Gencos notably Jamshoro and Muzaffargarh remained the most expensive power stations among all Gencos.

These concerns were also highlighted in an internal report prepared by the German development bank KfW and leaked to the media in the first week of March - a report that claimed to draw from the statistics contained in the Power System Statistics 2015-16, 41st Edition Planning Power of National Transmission and Despatch Company (NTDC), a subsidiary of the Water and Power Ministry. The report concluded that there was a significant decline in the amount of power generated by Gencos I, II and III, rehabilitated under a USAID programme recently, and yet producing significantly fewer units in 2016 than in 2010. The report further emphasised the need to introduce better overall management in Gencos, for efficiency optimisation and recommended that "after their useful life, these fossil-fuel-burning plants need to be retired in favour of more efficient, preferably renewable energy plants." It is unfortunate that Gencos' privatisation, a desired option to improve governance, remains on the back burner with less than a year left for the completion of the tenure of the Sharif administration.

The response of the Federal Minister for Water and Power Khawaja Asif on the KfW report was to challenge its veracity through a letter prompting KfW's apology with the claim that it was an 'internal document' not meant for media dissemination. However, ignored by the Minister was the fact that the KfW report was prepared on the basis of data compiled by the NTDC which is under the administrative control of his ministry.

Load shedding today has almost reached the levels that were prevalent during the tenure of the PPP-led coalition government. The government's justification has been to either attack consumers of particular localities for not clearing their bills, a policy decision, or else to claim that demand has risen as heat levels during the current year have risen leading to shortages. Reports indicate that massive load shedding is ongoing even in areas where the bill clearance is 100 percent and critics further argue that a rise in demand and heat should surely have been factored into the calculations.

Chairman of the PPP, former President Asif Ali Zardari, has announced that the party would stage sit-ins against load shedding, a decision that is reminiscent of the protest that was successfully launched by Punjab Chief Minister Shahbaz Sharif against the PPP-led coalition government - success measured by the subsequent electoral win of the PML-N in the 2013 general elections. One can only hope that the PML-N leaders acknowledge that hiding behind an aggressive stand in parliament and in the media is unlikely to convince their constituencies that energy supply has risen and that load shedding would be a thing of the past by 2018.



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