Islamabad June 06 2021: Special Assistant to Prime Minister on Power and Petroleum said that foreseeing ample capacity government has decided to retire older plants based on Residual Furnace Oil (RFO). This will help to save PKR200 in capacity payments.\
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Government will buy private Independent Power Producers on Net Present Value basis which comes out to be half of the price that government has to pay during the remaining tenor of their Power Purchase Agreement. Giving an example of Hub Power, he said that we have paid them capacity payments of PKR17 billion during the period from July 2020 to March 2021. However, during the same period it has generated only 1 percent electricity of its available capacity. This is because of the nature of the contract signed with them which is on “Take or Pay Basis”.
“What is important to realize is that we can’t roll back the “committed” power projects of 23,000 MW due to come online in the next 10 yrs. These will be in addition to existing (derated) capacity of about 32,000 MW. Our plan is to retire 7,000 MW of older and inefficient capacity also, half of which are belong to government sector.”
Tabish Gohar – Special Assistant to Prime Minister on Power and Petroleum
Other IPPs that are established on 1994 policy and runs on RFO includes Lalpir Power, Pakgen Power, Kohinoor Energy and Saba Power. During the month of April RFO contributed a mere 1.5 percent in country’s electricity generation mix. One unit of electricity on RFO cost consumers PKR12.0 per unit when compared with PKR9.9 per unit on RLNG and Rs8.0 per unit on coal, as per data published by National Electric Power Regulatory Authority.
Recently, the government has paid PKR89.5 billion to 20 Independent Power Producers as an agreement that would help to lower end consumer cost by PKR800 billion during the period of next 30 years.
