"We have to set our priorities in the national interest... resources should be used accordingly to get better results," they suggested. They said that the difference between furnace oil-based IPPs of 2002 policy and government power generation units (Gencos) was around Rs 6.94, as the per unit generation cost of furnace oil-based IPPs cost is Rs 14.09 while the cost of Gencos was Rs 21.04. Similarly, the cost of gas-based IPPs also remained much lower at Rs 3.74 as against public sector gas-based Gencos that produced electricity at Rs 6.1 per unit.
The available capacity of IPPs was not used by the government because of default and non-payment of current dues. The idle capacity of furnace oil-based IPPs stood at 1,512,692 megawatts and gas-based IPPs at 1,609,789MW in nine months. With the available cost saving of Rs 6.94/KWH from the furnace oil-based IPPs and Gencos and Rs 2.36/KWH from gas-based IPPs not utilised by the government economic order, the national exchequer suffered a loss of Rs 14 billion between January and September this year.
Intizar Mahdi, a power sector expert and corporate lawyer, said: "In our country, most of the furnace oil-based public sector power generation plants are being given preference that are running on less than 20 percent efficiency, resulting in producing electricity at a rate of over Rs 20 a unit," he said. And the country is wasting costly gas and fuel to generate least power from these plants at a time when the country is facing worst-ever gas shortage, he said.
He suggested that most efficient power plants should be given priority in despatch order as well as in payment. Once the most efficient plants are fully utilised the despatch order should be given to next level of less efficient plants accordingly so that the country could get cheaper electricity while using same volume of natural gas. Meanwhile, eight IPPs involved in litigation with NTDC over non-payment of dues are not even close to solving the issue. Their outstanding dues increased to Rs 55 billion because NTDC "is only paying about 59% of current billing of these IPPs while Rs 19 billion of Rs 21 billion is yet to be paid".
An executive of one of the affected IPPs said that despite SC orders, the current dues of these IPPs "are still not being fully cleared". He said NTDC still owed Rs 37 billion to eight IPPs for power supplied after July 13 this year. "The eight IPPs billed an amount of Rs 90.538 billion to the NTDC for the power supplied from July 1 to November 30 this year but NTDC has made payment of only Rs 53.424 billion which is 59 percent of the billed amount while Rs 37.114 billion is still outstanding." He said adding that payment of Rs 19 billion of arrears is also still pending. A power sector expert Mohsin Syed wondered how these IPPs were continuing generating power despite such a huge outstanding amount.
"It is indeed a brave and patriotic to continue operations to keep the power crisis at bay without being paid in full, however, they won''t be able to do this for long," he added. He said that currently these IPPs were producing 824MW (with a total capacity of 1,630MW) out of total power production of 9,046MW.
He said that the power crisis would worsen at a time when the hydroelectric capacity will be minimum because of canal closures. "NTDC is not following the principle of despatch order on the basis of economic order to efficient power producers which is causing the purchase of costly electricity from less efficient plants whereas NTDC should pay efficient plant first to get their 100 percent capacity which is cheap and then to less efficient plants and so on," Mohsin said.
In Pakistan, most public sector power generation plants had an efficiency of less than 20 percent. Independent power generation plants (IPPs) are running at around 50 percent efficiency level, sources claimed. "It means we can generate more electricity with the same volume of gas if it is diverted to IPPs, instead of public sector plants," they said.
"Our first priority should be to get more and cheaper power generation," they said. They said the public sector power generation plants were years old and suggested such plants should be replaced with the new ones so that more electricity could be produced with the same volume of gas. The government should also use power generation capacity of IPPs, they added.