Old GENCOs should retire

This government has done a good job in enhancing the power generation capacity of the country; the installed capacity is around 30,000MW, and virtually all the new plants that are commissioning have double the efficiencies of pre-millennium GENCOs. And now, prudence in management requires politically difficult decisions like shutting all plants that were commissioned prior to 2000.

The GENCOs and K-Electric thermal plants operating in the country have commutative installed capacity of 8,170MW, while the net available capacities of these are 7,009MW. Barring TPS Guddu (combined cycle) installed in 2014 (net capacity: 777MW), Nandipur Power Plant installed in 2014 with a net capacity of 510MW, and K-Electric Korangi, SITE and Bin Qasim plants installed between 2008-12 having combined net capacity of 871MW, all GENCOs should be shelved.

Thus, out of 7,009MW of available generation sources of GENCOs and K-electric thermal plants, old plants with a net capacity of 4,907MW should simply be retired. It’s no brainier that due to sheer inefficiencies, the old plants should be scrapped as running them results in opportunity loss of using scarce natural gas or expensive imported furnace oil. Plus, witnessing the deteriorating environmental conditions, the benefits from these plants are much less than the cost the nation is paying for running them.

Let’s delve into the details as to which plants are inefficient and why it is politically tough to shut them down. At the top of the list are GENCO-1 TPS Jamshoro plants, installed in 1990 with a net capacity of 710MW that are mostly running on gas or FO. Additionally, GENCO-II TPS Guddu plants installed during 1974-1994, having a net capacity of 1,420 MW, running on gas, are also burning the scarce resource inefficiently.

Adding the two companies, Jamshoro Power and Central Power (TPS Guddu), a net capacity of 2195MW is coming from inefficient plants located in Sindh, which are mostly running on natural gas. In case of Punjab, 1491MW are coming from sub-optimal plants in Muzaffargarh and Faisalabad running on FO and gas. While the K-Electric’s inefficient plants have a net generation capacity of 1,222MW located in or near Karachi.

The plants located in Punjab are easiest to shelve or to be replaced by new plants; second in order of ease let to go of the KE’s plants. In case of the latter, the fuel is FO, which would not be used as the government would try its best to minimize FO import bill.

However, the most difficult and most urgent case is that of shelving Sindh plants running on gas. The inefficiencies in Sindh GENCOs are paramount, whilst the province exercises its right provided in 18th amendment for using natural gas produced in the province by the province irrespective of how much of the resource is wasted.

This is a sad reality of the country where the inefficient use is being legitimitised post 18th amendment, which has also given rise to polarity between provinces. The PMLN government has strong roots in Punjab and all the four RLNG plants having capacity of 4,800MW are being installed in Punjab. These are running on imported gas, which is more than double the price of domestically produced gas; while the cheap domestic fuel is being wasted on old condemned plants.

Such practices should be halted. There should be a national policy of using optimal energy sources. And the need is to have more renewable resources, especially wind with corridors located mainly in Sindh. Till when will our polarized political parties keep on making decisions based on their respective strongholds? When would we collectively bring Pakistan first?