ISLAMABAD: K-Electric (KE) has shown an interest in purchase of power directly from 600-MW coal-fired power plant of Lucky Electric Power Company Limited (LEPCL) as part of its of strategy to improve base load, well informed sources told Business Recorder.
K-Electric, being the only private and vertically-integrated electric utility in the country is responsible to manage generation, transmission and distribution within its territory.
The power utility, sources said, has prepared its long-term power procurement plan to cater the ever-increasing demand in the KE system, for which it requires additional base load power beyond its BQPs-3 plant and supply from the National Grid.
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KE plans to optimize its fuel mix through inducting a combination of renewables and base load plants based on indigenous resources like local coal, which it believes is necessary to ensure base load generation at relatively cheaper cost.
According to sources, the recent decision taken during the Prime Minister Task Force for KE issues states that supply from the national grid to KE would be restricted to only 1,000-MW on a firm basis whereas supply over and above 1,000-MW would only be made available based on the demand and supply situation of the national grid, and on pro rata basis with other Discos.
The power utility company maintains that given the uncertainty of the additional power that may become available in the National Grid for KE, over and above the firm capacity of 1,000-MW, it has become extremely vital for the company to arrange for firm capacity that can be made available from other options.
KE has been evaluating various options with regards to the base load requirement, which includes power off-take from unit-2 of Jamshoro Power Company, which is actively under discussion amongst the technical committee formed by the Power Division, the sources added.
Additionally, because of further power requirements of KE, its direct procurement from the 1 X 660MW coal power project constructed by LEPCL can be another viable opportunity and preliminary discussions between the project sponsors and KE demonstrate an inclination from both sides, the sources maintained.
KE, sources said, in its proposal shared with the federal government that the project being located at Port Qasim, Karachi, presents a natural fit for KE to procure power via direct Power Purchase Agreement (PPA). The facility, which has achieved COD, can utilize both imported and local coal, along with being the only ultra-super critical coal power project in the country.
Furthermore, the direct power off-take of KE from LEPCL will help in reduction of the existing transmission network congestions currently being faced by National Transmission and Despatch Company (NTDC) to deliver power from plants situated in South, to serve the demand centres situated in the North.
“PPA between KE and LEPCL will reduce the obligation of the sovereign guarantee required to be shouldered by the Government of Pakistan (GoP),” the sources quoted CEO KE as saying in his written confirmation to the Managing Director PPIB Shah Jahan Mirza.
Considering the present scenario, KE has expressed its strong interest in the direct purchase of power from LEPCL’s 1X660MW coal power project.
“KE remains fully committed to explore every available option to meet its power requirements in addition to supply from National Grid and therefore, Power Division should consider KE’s proposal,” CEO KE Moonis Alvi said in his letter to MD PPIB.
Copyright Business Recorder, 2023