National Power Grid to step in until K-Electric acquisition is complete

• The Cabinet Committee on Energy (CCoE) has been requested by the power division for an exemption on the 2016 imported fuel based ban until the Thar Coal Energy project can fulfill supply.

With the delay in acquisition of K-Electric by Chinese State-owned powerhouse Shanghai Electric Limited, the government has increased supply to Karachi to a higher 1400MW with immediate effect. In addition, the government has agreed in principle to facilitate the power utility’s effort in increasing generation by 1600MW.

The government’s support would mean permission to construct a 700MW coal-based power plant as well as increasing supply to the city from the national grid to 1400MW and providing 90 million cubic feet of imported liquefied natural gas (LNG) to catalyze an existing 900MW project.

The Cabinet Committee on Energy (CCoE) has been requested by the power division for an exemption on the 2016 imported fuel based ban until the Thar Coal Energy project can fulfill supply. A second note to allow the issuance of tariff notification for Datang Coal Power has also been requested in front of the Cabinet.

KE has insisted that delays in the notification would result in the slowing down of commercial operations of the utility company and cause a rift between power demand and supply.The Datang Coal project would also help diversify KE’s fuel mix by transitioning to coal based production from the more expensive furnace oil based production.

The CCoE had been approached recently to supply KE with 500MW from K2-K3 projects and after agreement with all stakeholders, the NTDC has agreed to grant the additional 500MW power supply. Furthermore, the importance of the Datang Power Project was emphasized in meeting the City’s power demand. KE has maintained that the plant will operate on local coal once local coal is commercially available for distribution.

KE will also soon develop transmission lines and infrastructure for the Bin Qasim RLNG plants which are set to become operational in 2021 with the first unit (450MW) to start operations in April-May 2021 and the second unit to commence operations in September-October 2021.

The recent proceedings leave the power utility company with promising prospects but subsequent delays in the acquisition by Shanghai Electric Limited can be a significant hindrance to power production plans.