power policies, planning and bottlenecks - final

7/25/2019 Power Policies, Planning and Bottlenecks - Final

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Power Sector Planning:Issues, Challenges and

Recommendations

Engr. Salahuddin Rifai

Senior Energy Expert AEAIcto!er "", "#$%


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Outline

Overview of the Power/energy sector Facts and Analysis

Issues originating and surroundingthe sector for consideration toarrive at right proposals/ policydecisions

Recommendations


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HISTORIC DEMAND & SUPPLYPOSITION

(2001-02 2013-14)

Fisc!Y"#

C$%'" P"*D"%+

C$##"s$+i+,S'!

S'#!'s.S/$#!!

200102 10!"# 10$#! !%"

200"0& 1%$!' 12&00 12!'

201011 1#2%0 1%1&% ""$1

2013 2001& 1&100 31

201!2!"00 1"&00 $#00

(A!! Fi,'#"s i+ M)


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P$"# 5"+"#i$+ 6 S$'#c"

1!(

%2("2(

2(

1985

Furnace Oil) !1(

*as) 2"(

+ydel) %2(

,uclear) 2(

2012


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-valuation of Five yearPlans


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Analysis of " year plans


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.yths vs Reality*rowth through elf Financing

0

20000

!0000

&0000

$0000

100000

120000

0

20000

!0000

&0000

$0000

100000

120000

Revenue PP nits old

Rs7Mi!!i$+ M*/


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nit old Revenue and PP Allocation

Y"#

U+is S$!

(M*/)

R"8"+'"

(Rs7Mi!!i$+)

PSDP

(Rs7Mi!!i$+)10 30 -

19 1:;22 204 240

1


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AI -,-R*3 PO4I53 PRO*RA.


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POER FUEL MI= AND TARIFFS PEERCOMPARISON

5s Oi! C$! HNO>>

India 12( 1( ( 1$(

6angladesh $2( 1%( 2( %(

7 1#( 1( !#( %1(

8 !!( 0( 2#( 2'(

Pa9istan 2'( %"( 0:1( %$(

&uel 'ix Consumer (ariff )P*R+wh-

7 F310 ata

Pa9istan;s ,epra determinedtari< P8R 1%:$/9wh

77+,O = +ydel ,uclear and others

1%:$

1%:2%

$:"#

":!'

':%&

Pa9istan

8

6angladesh

India


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C$s $ 5"+"#i$+

11

S$'#c"s C$s (Rs . ?/)

H"! $! (+") 1730 (


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>ransmission ,etwor9 inPa9istan


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-? @APA iscos areas


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INCREASED 5AP ETEEN NEPRADETERMINED AND 5$P TARIFF

0:00

2:00

!:00

&:00

$:00

10:00

12:00

1!:00

1&:00

NEPRA D""#%i+" T#iB + 5$8 N$i" T#iB

5OP N$i" Esi%" A8,7 T#iB

N"# D""#%i+" Esi%" A8,7 T#iB

NEPRA Dete rmined Average Tariff

5OP N$i" A8"#," T#iB

34Rs7 27;3.*/

39Rs7 3792.*/

24Rs7 272;.*/

40Rs7 700.*/

39Rs7 471


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-nergy ector a iggest pulic policychallengeB @hat is Pulic PolicyC

eDned in many waysC Policy is decision ma9ing

Policy is agenda setting / directing

Policy is realiEing values

An intentionally created plan

to guide decision ma9ingtowards achieving rationaloutcomesG


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Policies related to -lectricPower

Formation of @APA as a consolidated ody 1#"$ evelopment of +ydropower

*OP Focus on Power sector

>riPartie Agreement1#$"H*OP@6@APA

Introduction of Private Power+65O H4OI1#$" Power ector Restructuring Plan approved1##2

Private Power Policy1##!

Private +ydropower Policy1##"

-nactment of ,-PRA/,-PRA Act1##'

Power Policy2002 R:P:P;s of 200& 200#10

1$thAmendment and Power *enerations development2011

Power Policy201%


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@APA;s evelopment andIssues

@APA started at 11$ .@ installed capacity '0 *@+ generation '0 .lnRevenue 2'0000 consumers

Power ector made elf Financing

@APA increased to aout "'00 .@ I/5 of its own out of proDt

despite 1'1$ ( compound interest charged

*OP loans stopped for P/ development1#$"

4oad growth was tremendousup to 1$( annually

@6 undertoo9 to Dnance whole P/ ev: On condition of !0 ( /F y @APA outof proDts

Private Power generation resorted to y F*1#$"

1st: .O in 1#$$ for one +65O out of tens of o changed to 6OO without tari< impact

PPA one sided in favor of +65O entailed high capacity cost fuel pass thru with Jinde?ations of tari< items

Pa9istan the Drst country in %rd: @orld to have Priv: Power


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Private Power contd:

Fi?ed chargesB J 20/8@/month with 5PI

'" ( of capital cost to e paid ac9 with 1! ( interest in J terms inIst: 10 years

8AP5O privatiEed 1##& with tari< 2:& times higher oth started eingpaid in Kuly 1##&

5ost of 10 .8@+ from oth cost %# ln while %$ .8@+ of @APA costwas lesser

@APA started going to deDcit Dnding diLcult to operate satisfactorily

IPP;s of 1##! policy ased on +65O;s style though somewhat etter

,-PRA enacted in 1##' empowered to regulate and to approve tari


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5ontinued::

Restructuring made in 1##1/2 for corporatiEed P/ with ! *-,5Os ,>5 $10 I5Os/@APA

>hermal generation construction anned for @APA and 8-5 wef 1###2

*eneration cost increased form lesser than "0 6ln in 1##& to #00 6lnannually:

,-PRA determined tari< ased on 5O not charged instead *OP notiDedlesser tari< wef 200' promising susidies ut could not pay in full nor intime 5ircular et menace started

>ari< remained same during 2001200& at Rs: !:0"/unit

>ari< then increased Rs: #/unit H200'212

>ari< raised to Rs: 1"/unit in 201% under 201% P/Policy

5ircular et cleared in Kune 201% generation increased y 1'00 .@Nuic9ly ut the sustainaility of this increase is

5ircular det again grew to over 21" ln for less recovery and high linelosses somewhat ineLcient operations signiDcant theft:


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5ontinuedC

R:P:Ps resorted to with e?oritant rental values

RPP;s on gas contracted without gas availaility

,umerous candals/5ourt cases

/5ourt got all RPPs rescinded

A6; audit report was an important reference evelopment of power stations got delayed

ResultA 6ig shortfallemand upply *ap

*OP did give susidies wef 2010 ut came to e insuLcient

upply of fuel is insuLcient-nergy ecurity hampered

+ydropower development delayed

8alaagh P/B %'00 .@ not uilt despite wor9 since 1#"%on it:


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Planning;s Role

4oad Forecast and generation Planning on 4east 5ost asisy ,>5

evelopment of *eneration y @APA *-,5Os and PPI6

In view of huge emand upply *ap P5 has now tas9 of

Prepn: of " years Plan 201%201$ and ision 202" toridge the gap

>he capital costs reNuirements are very huge

P5 een consulting e?perts thru its oLcials

.o@P has set on a path of reforms tari< Increase

e?pedite recovery -lectricity theft 5ontrol 4: 4ossesreduction increasing eLciency with some success

>he deDcit is still very large li9e !00 lns and susidieslimited to 1$02$0 lns/annum

#"* ' $ CIRCULAR DET P#"


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#"* ' $ CIRCULAR DET- P#"2013 s"!"%"+

>ari< usidies

Interisco i


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5ategory @ise 5onsumption

200! 200" 200& 200' 200$ 200# 2010 2011

"000

10000

1"000

20000

2"000

%0000

%"000

!0000

domestic industrial agriculture

A++'! E!"c#ici C$+s'%i$+ (5/)

Oserve the Pattern 4oad emand 5urve


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28

Oserve the Pattern 4oad emand 5urveHReferenceB .a?imum 4oad ay


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INSTALLED CAPACITY FOR 5ENERATION


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Price of Imported Oil

200! 200" 200& 200' 200$ 200# 2010 2011

10000

20000

%0000

!0000

"0000

&0000

12'#&1%#$#

22#&2211''

%"'!$

2%!2"

!$&2'

"!&0&

P#ic" (Rs . T$+)

USAID ENERGY POLICY PROGRAM


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-?change rate

200! 200" 200& 200' 200$ 200# 2010 2011

!0

"0

&0

'0

$0

#0

P?R . EFc/+," R("

P?R .


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>ough 5hoices @here to allocate

gas


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*as prices ector5omparison


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5omparative Analysis IF we switchfrom normal to eLcient ul

N$#%! '!6 E+"#, S8"#E+"#, Us," P"# /$'#(?H)

070 07013

O+" '!6 c$+s'%i$+M$+/!( ?H

107; 2734

10 6'!6s C$+s'%i$+ ?H 10; 2374Esi%" 6i!! i+ #'""s 12 2;07;

Esi%" C$+s'%i$+ $#20 %i!!i$+ c$+s'%"#s(ss'%i+, 9 6'!6s "#/$'s"/$!) i+ ?H

1:0;0:000:000 234:000:000

Esi%" i!! i+ P?R ( "#%$+/)

12:0:000:00

02:;0;:000:00

0

A#$i%" i+ P?R 127 6i!!i$+ 27;1 6i!!i$+


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4osses of I5Os

PRE REGUISITES FOR POER

A


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Present Q yearly demand to e ased on lowgrowth scenario of ,>5 planning upto 201%

then upgraded to align with *P targets: *P viE &( growth for the ne?t three years

and so on:

Planning to cater for additional '000 .@ in

the short run and then add yearly growth etc:H on the asis of *oP targets etc:

,ational Power Policy 201% to e revisitedand redrafted = considering all national goals:

PRE-REGUISITES FOR POERPLANNIN5Fc NTDC Data fixes PEPCO demand for 2013 at 23,000 MW (includin

de!ressed"su!!ressed demand#, $%ile same for PEPCO, &E'C self eneration is

2),000 MW* +ence, t%e !resent s%ortfall (ee!in PEPCO max eneration of 1-000MW# is .,000 MW

A

PRE-REGUISITES FOR NATIONAL POER


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PRE-REGUISITES FOR NATIONAL POERPLANNIN5

*P goals Hgrowth Proection

.*s = if to e followed

Additional goals = if any FutureHs viE: depletion OR availaility of

resources including fuel e:g gas coal

nuclear fuel 5rosscutting considerations y

incorporating targets for industrialgrowth agriculture production defense

needs etc:

Fc ,o Figures availale for Planning ut for the

ma?imum shortfall of 201%:


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P$"# S"c$# P!++i+,

Integrated emand Forecast y the ,>5 HAs per ,-PRA license to eaccepted for Planning

Integrated national level planning for hydropower reNuired

encompassing oth federal and provincial areas of urisdiction: ,uclear Power to e developed and its management system e studied

and emulated y power sector entities:

Power planning to e underta9en while considering oth the presentdepressed Q suppressed demands:

ites for generation plants to e D?ed y ,>5 for o


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P$"# S"c$# M+,"%"+

Recommendation for technical resource to manage the powersystem = right from the advisory resource of the P. to the

leadership of related O-s/P5-s FIR-walling of Power ector operations from outside inTuence =

including political and governmental:

erious +R./+R initiatives to e ta9en special = consideration at,PP entities:

Future leadership program e launched in line with thereNuirements Q covenants to attract latest technologiesincluding emerging sciences:

>echnology oLces to e opened = up in all P5-s = tas9ed toattract latest technologies etc:

A

Fc >he Present management is elow par asedon adhocism and primarily in the hands of nontechnical civil servants in the .o@QP:

5ENERATIONC


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5ENERATION

*-,5Os operating elow capacity:>echnology upgrades needed to increasecapacity y e?tra 1000 .@ in addition to

recovery of lost capacity: A technoeconomical analysis reNuired for

conversion to coal:

Futures study of coal pricing to eunderta9en:

Incentive ased management needed:

Integrated policies reNuired to encourage

Private ector investment under one window:

C

Fc *-,5Os operating elow par / ,o incentives foreLciency improvements/ new technologies not eing attracted:

i


42/60

c$+i+'"

6A- 4OA PO@-R P4A,> to e ensured for aRI6>- *-,B/5AP>I- PO@-R/.I5RO*RI eencouraged:

R-isit of IPP PPAs for adherence to present groundrealities: 6OO>U V 6OO

Increase e?peditiously the R- up to certain (age of thetotal generation capacity =Indigenous production

>echnology upgrades for IPPs under an incentive asedplan to e encouraged:

TRANSMISSIOND


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TRANSMISSION

>ransmission system/grid stations toe developed/upgraded thru proper

load Flow studies ncovered Rural areas to e covered

thru R- generation:

6aluchistan Rural areas to ecovered thru %% 8 distriution linesrather than 11 8:

D

Fc ecrepit mired in 1#$0s "00 9v/220 9v less than

need = ma?imum capacity 1'000 .@ on sustainale asis:


44/60

c$+i+'"

5onnectup of AK8 and *6 to the ,ational *ridin an integrated manner as per suitaility

4egislation to support availaility of Rightofway for transmission lines:

Private sector to e included only through PPPconcept under ,>5 with solid safeguardstransparently for all the parties

Formulation of AAR5 *rid capale ofallowing crossorder trade with Iran 5AAand eyond against set time lines:

DISTRIUTIONE


45/60

DISTRIUTION

I>RI6>IO, system to e developed ondemand ut 6eneDtcost Analysis

Innovative methodologies includingprivatiEation of some operations may eadopted to ensure full revenue recoveryand theft control:

-nergy loss to e loo9ed into in detail =theft to e NuantiDed and not misused tohide technical loss

,ational 4oss Reduction Program to e

E

Fc ilipated unale to cater to needs of people mired in 1#&0s technology automation and latest

technologies not availale:


46/60

c$+i+'"

6ring aout 5ustomer iscipline to ensureup to mar9 power sector operations:

Role of provincial governments/local

administration to e legislated/providedforin the updated -lectricity Act:

-lectricity Act 1#10 to eupdated/legislation of comparative

economies to e emulated: Provision for 5onservation Q -- to e made

in updated -lectricity Act:

CORPORATE & RE5ULATORY AFFAIRS (CORA)F


47/60

CORPORATE & RE5ULATORY AFFAIRS (CORA)

,-PRA to e strengthened technically commerciallyand legally as per original ,-PRA Act 1##& andmade responsile for an eLcient Power ector:

P,RA;s Regulations to e considered forimprovements

-lectricity Act 1#10 to e immediately updated yadopting such legislation of comparativeeconomies:

6Os of the P5-s to speciDcally comprise ofsectoral professionals during the ne?t %" yearswhere after others too could e considered:

F

Fc 5ORA in nonprofessional hands legislationunale to support utility operation I5Os unale to

recover revenue or control losses:

c$+i+'"


48/60

c$+i+'"

Amalgamation of all e?isting policies into onedocument H all encompassing

5onservation and -- to e adopted as perregulations:

Reasonale and well wor9ed out pfront tari- on the asis of I56/ lowesttari< /option/ ids fairly:

-nergy trading and full conversion from the singleuyer to the multiuyer model of power mar9et y

201$/20: -lectricity >rading Q @heeling to e supported as a

,ational Policy gradually

@eaningo< of industry from the I5O systems andstrengthening of 5aptive Power portfolio fairly

TARIFF FORMULATION CHAN5ES5


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TARIFF FORMULATION CHAN5ES

-?isting plain energy suppression model of power tariwo Part >ariargeted susidies

>O tariari< for 5P/PP operations to e rationaliEed to cater

for private sector to enhance generation at I5Oslevel fairly

Aility of I5Os to uy from PP plants on the as andwhen reNuired asisG:

5

PULIC PRIATE PARTNER SHIPSH


50/60

PULIC-PRIATE PARTNER SHIPS

PPPs to e structured after road shows etc:

.anagement contracts too can e structured for theP5-s = success stories to e emulated:

4easeout of e?isting *-,5O plants to private sector:

-?perimental 4easeout of istriution su division forI5Os which are at lower rungs of privatiEation:

Out sourcing of speciDc operations of the P5-s:

@APA has developed its generators and ,etwor9through 6onds issued at 1$1# ( interest Rate:

H

Fc,o concept at all oth the pulic and the

private sectors operating at di


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FINANCIN5

Financing of at least Rs: !00 illion eprovided from the national udget each year

for Power ector proects Interest on Relent 4oans to e reduced to ' (

li9e 8-5

imilar provisions e made y

provinces/AKQ8/*6 W their own or again fromthe ,ational udget:

A long term FIP e formulated to cover>ransmission and istriution system gaps:

>he same to carryon even after privatiEation:

IFc6udgetary outlays stopped long ago: .4AsDnance availale on relent asis through the *oP

5oncept of O-s garnering private Dnance none?istant ector cash starved:

INDE5INIJATION OF PLANTK


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EGUIPMENT.FUELS

IndigeniEation of power plants and alliedeNuipment e encouraged for a


53/60

c$+i+'"

.inistry of production to spearhead suche


54/60

POER SECTOR MONITORIN5

XRole of Planning 5ommission e madeclear

X,o role to e assigned to temporary ORma9e shift arrangements e:g: monitoringcell in the P.s oLce:

XRole of .inistry of @QP

Policy ma9ing

Policy implementation

.onitoring and -valuation

?

Fc4ac9 luster nonprofessional way wardTuid with changing goals on whims: Present .o@QP

with multiple tiers of control est e?ample of the rot:

+," + s +, #c "c '#" $


55/60

, ,P$"# S"c$#

@APA to e given lead in implementation of mega @aterand Power proects:

Possile placement of ,>5 under @APA Has the onlyP5- to remain in the pulic domain

@APA and ,>5 to e Drewalled from outside inTuenceas per @APA Act 1#"$:

*-,5O holding 5o to e made e


56/60

P-P5O could e reuvenated with changedmandate from management and holding company

to the ,ational Power AuthorityH,PA on the samelines as @APA with ,ational Power Planning itsimportant pillar: It should help in Recovery andreduction of losses esides monitoring andevaluation of all ongoing proects and to speed

trac9 implementation of the same through@APA/,>5 etc:

>he ,PA would act as the coordinating and policydrafting ody for the Power ector: .o@QP to

restrict itself to policy ma9ing only: Reform process can continue with independent

*-,5Os ,>5 and the I5Os reporting to the ,PAetc: the things can change once a few entities getprivatiEed: DISCOSI%#$8"%"+

@APA;s earlier motto of rovidin continuous

C$+i+'"

C i


57/60

-,-R5O, can e placed

under P-P5O = revived witha redone charter acting as a

coordinator/ implementationody of the *oP H on ehalfof the .o@QP

PPI6/A-6 to e restructured = ,ew 6Os to e

formulated

C$+i+'"


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CONCLUSIONS

A paradigm shift has to ta9eplace:

5hange of present thin9ing = amust:

Planning to e ased on >echnoeconomic considerations alone:


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hort >erm Interventions

hort >erm Interventions Proposed 5opy:doc?
http://var/www/apps/conversion/tmp/scratch_7/Short%20Term%20Interventions%20Proposed%20-%20Copy.docxhttp://var/www/apps/conversion/tmp/scratch_7/Short%20Term%20Interventions%20Proposed%20-%20Copy.docxhttp://var/www/apps/conversion/tmp/scratch_7/Short%20Term%20Interventions%20Proposed%20-%20Copy.docxhttp://var/www/apps/conversion/tmp/scratch_7/Short%20Term%20Interventions%20Proposed%20-%20Copy.docx


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