Mismanagement, fuel shortage blamed for outages

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Fuel shortages caused by inadequate supply arrangements and forced outages are leading to serious power supply constraints as consumers suffer in extreme humid conditions across the country.

A senior official of the Power Division conceded that power companies had been compelled by unavoidable circumstances to apply forced power cuts ranging between 1,000MW and 2,000MW in peak hours. This does not include revenue-based loadshedding of 2,500-4,000MW depending on how the relevant authorities are technically able to park shortages.

“We are not getting LNG (liquefied natural gas) supplies against firm demand and furnace oil supplies are not sufficient to run available power plants,” the official said.

The management is such that LNG tenders for two-vessel deliveries in second and third weeks of July were cancelled at the rate of $11.77 and $11.66 per MMBTU (million British thermal units) and one of them was given to the same party after four days at $12.78 per MMBTU and one vessel was missed altogether.

Besides, power generation from Mangla Dam has dropped and that from Tarbela Dam has not picked up as anticipated, the official said. As if that was not enough, a major 1,300MW China-Hub Power plant was hit by lightning and went out of the system. About 1,800-2,000MW capacity is on forced outage for technical reasons.

An official said loadshedding had come down on Sunday when compared to Saturday despite an accidental exit of the China-Hub Power plant.

This was also confirmed by Energy Minister Hammad Azhar in a tweet. “Due to a lightning strike on China Hub power plant and low outflows from Mangla Dam, some local gas (3.75% of total) is being diverted to the power sector to meet its peak demands. This is a temporary arrangement for a few days,” he tweeted.

The overall shortage of power supply in the system has hovered between 6000MW and 4000MW over the past couple of days as humidity increased almost across the country. In a changed policy, the government has excluded high-loss areas from firm power demand estimates.

“We no more consider high-loss consumer as priority and they are not accounted for in demand projections. We park shortages to such areas and drop load in low-loss areas only in extremely unavoidable technical circumstances,” an official involved in operational matters explained.

He said load management varied between two and five hours of varying intervals in urban areas and could go beyond 10 hours in high-loss rural areas. “The loadshedding period is kept as brief as possible and only in compelling conditions,” he said, explaining that time-bound power cuts could not be applied in such unpredictable load and weather conditions.

The official said power companies were getting 740mmcfd (million cubic feet per day) of LNG against a firm demand of 950mmcfd until Saturday, which was increased to 780mmcfd on Sunday with some adjustments here and there as gas supplies to the CNG sector and general industry in Punjab and Khyber Pakhtunkhwa were closed. About 1100MW shortage is emerging there. Even Haveli Bahadur Shah plant was operating at sub-optimal capacity.

Furnace oil stocks have already depleted at various power plants, the official said. Muzaffargarh and Hubco plants have been closed due to fuel shortage, while Jamshoro plant was operating at half capacity. Many other oil-based plants are operating at critical levels.

Another official said total power available in the system in peak hours was about 23,000MW on Sunday against an estimated demand going beyond 27,000MW.

A Petroleum Division official said there were several reasons behind the fuel shortages, including insufficient finances, short notice to arrange supplies and overall market conditions. He said orders for furnace oil from the power sector came at a time when there was limited time to go for routine procurement cycle and gallop tenders offered prices that were not acceptable.

The official said very rare furnace oil vessels are readily available in the market that those holding them tried to benefit from desperate buyers. He said about Rs9 billion or $57 million additional circular debt had been built into the gas system that had already crossed Rs120bn.

However, a Power Division official said Pakistan State Oil had not even delivered furnace oil for which it had been given sufficient funds recently through settlement of about Rs90bn first installment of independent power producers. He said the next payment could only be made when earlier supplies are delivered.

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