K-Electric recovery position continues to worsen: Nepra report

The National Electric Power Regulatory Authority (Nepra) has stated that K-Electric (KE) has failed to ‘effectively increase’ its power generation capacity and its recovery position continues to worsen.

In its ‘State of Industry Report 2017’, Nepra reported that the K-Electric has become dependent on external power sources including National Transmission & Dispatch Company (NTDC) and independent power producers (IPPs).

“During the fiscal year 2016-17 also, in addition to purchasing power from IPPs, KE imported around 650 MW of power from NTDC on regular basis. Although the agreement between NTDC and KEL for power purchase has already expired, the power is still being supplied to meet the requirement of KEL consumers,” the NEPRA report stated.

As per the report, by March 2018, KE had installed capacity of 2,261 MW through its own power plants whereas IPPs and Captive Power Plants (CPPs) add another 442 MW to KEL system. In addition to 137 MW KANUPP power plant, NTDC is also providing 650 MW to KEL system. Due to aging and deterioration in generation facilities, KEL’s present capacity is reported as 1,973 MW.

The report revealed that KE witnessed a decrease in its generation capacity during the fiscal year 2016-17 through its own power plants is noted as 10,147 GWh, which shows a decrease of 176 GWh as compared to the previous year figure that is 10,323 GWh.

During the year, KE continued to under-utilize its own generation power plants and it was also noted to ignore merit order operation of its power plants, added the report.

On the recovery front, KE performance remained unsatisfactory as it could recover only 70pc of the amount corresponding to that energy, from its domestic consumers, which claims 51pc share in total energy billed by KE.

“Unless KE takes effective measures in this category, it would be quite difficult to improve the overall financial health of the company,” the report said.

Meanwhile, on the positive side KE was able to improve the average efficiency of its generation fleet from 30.4pc in 2009 to present levels of 37pc in 2017.

Nepra recommended that K-Electric must add efficient power generation plants in its system to reduce dependence on external sources. Further, the private electricity supplier needs to add power transformation capacity on urgent basis for a reliable power supply to consumers.