State of Industry Report 2019: KE performance remains unsatisfactory in 2018-19

Karachi power utility provider K-Electric has failed to increase its generation capacity, which has made it dependent on external power sources, revealed NEPRA’s State of Industry Report 2019.

As per the report, the installed capacity of KE’s own generation fleet during FY 2018-19 has been noted as 2,294 MW 'same as' compared to FY 2017-18. Since KE is responsible for maintaining integrated systems of generation, transmission and distribution, therefore KE is required to look for other sources to meet the supply and demand gap.

“Inability of KE to effectively increase its generation capacity has made it dependent on external power sources, including the import from NTDC system,” said the report. During FY 2018-19, in addition to purchasing power from IPPs/CPPs including Gul Ahmed, Tapal Energy, KANUPP, Anoud Power, International Steel Limited, International Industries Limited, FFBL Power, SNPCL and Oursun Pakistan, KE also imported around 650 MW from NTDC system whereas agreement for purchasing electricity from three wind power plants of 150 MW has also been signed with NTDC.

KE generated 10,727 GWh during FY 2018-19 that is an increase of 389 GWh over the last year. In addition to its own generation, KE imported 7,769 GWh to meet its increasing demand. The report noted that the performance of KE own power plants are un-satisfactory for last year as compared to allowed targets set by the Authority in respect of heat rate/efficiency and auxiliary consumption despite that reasonable O&M had been allowed to KE under MYT.

“The deteriorated performance of KE plants may be due to the reason that major overhauling of some units/machines was not carried out on timely basis,” it said.

Historical record shows that KE underutilized its power plants whereas it continued to carryout load shedding. KE has reported that the reasons for the low capacity factors of KE power plants are supply and gas pressure issues. Since the fuel availability is KE’s responsibility therefore it cannot be absolved of the negative impact such underutilization can cause on consumer end tariff. In addition, power plants of KE remained on standby mode for significant period, during FY 2018-19, wasting the potential to generate significant amount of economical energy whereas adding to non-productive energy during standby mode in the form of auxiliary power consumption resulting in financial loss.