Saturday, August 22, 2009

Plan for 1,500MW rental power plants

The Economic Coordination Committee approved on Friday plans to set up rental power projects to generate 1,500MW and sent a summary to the cabinet for approval.
Water and Power Minister Raja Pervez Ashraf told journalists after the meeting that in view of a requirement of 2,700MW generation through rental power plants (RPPs), the ECC had asked his ministry to arrange 2,200MW from 14 companies in order to get rid of loadshedding.
‘The ECC meeting today approved 1,500MW to be generated through the RPPs and directed the power ministry to seek 200 mmcfd of gas from the petroleum ministry to generate 700MW from the existing system,’ Mr Ashraf said.
He said that if the petroleum ministry failed to provide the required gas more electricity would be generated through the RPPs.
He said the average tariff for IPPs was 12.5 cents per kilowatt hour while that for RPPs was 13.5 cents per unit. He rejected opposition’s allegations and said no one had provided any concrete evidence of misappropriations against his ministry over the RPP issue.
The plan had been approved by parliament after four days of debate on the RPP issue, he added. ‘Maximum tariff for any RPP is 15 cents per unit and that too for the barge-based generation plant for Karachi.’
In reply to a question about the financial impact of the RPP, Mr Ashraf said that when the plants came online the overall tariff would rise by six per cent.
However, he said, it would be the decision of the government to pass on the increase to consumers or to provide subsidy.
Mr Ashraf said the RPP policy had been adopted over the world and countries like Saudi Arabia and India were also getting electricity through RPPs. ‘We have to decide weather to get electricity or face loadshedding which is resulting in unemployment, low economic growth and protest demonstrations.’
The minister said that the energy mix consisted of hydel, thermal (both public and private sectors), nuclear and limited quantity of coal and wind.
He said the hydel power generation depended on water which was mainly controlled by the Indus River System Authority for irrigation and a new hydel project required at least eight to 10 years.
‘A thermal power plant requires five years and a coal-based plant six years. The country has no other option but to go for rental power plants.’
Mr Ashraf said that 14 per cent mobilisation advance payments were being made to the RPPs and the amount would be deducted from tariff payments when plants became operational.
He defended the advance payment and said it was being done to expedite the commissioning of the plants.
He said the government was also working on hydel power plants and projects like Bhasha Dam and Neelum-Jehlum power plants and it would soon start work on the Bunji dam project.

Source: The Dawn
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