ISLAMABAD: K-Electric (KE) has submitted a three-tier Indicative Generation Plan (IGP) to the federal government, in the hope of facilitation from Islamabad for the smooth execution of the entire process.
KE Chief Executive Officer Syed Moonis Abdullah Alvi has shared outlines of IGP with the federal government and all relevant entities of Power Division including Private Power and Infrastructure Board (PPIB).
On September 03, 2023, KE submitted its IGP in response to letter of Power Finance (Power Division) of August 30, 2023, whereby KE was directed to provide its plans for generation enhancement along with associated details.
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Under the subject IGP, KE outlined its strategy with the foremost plan being to target those existing assets that can be made productive, with minimal incremental investments; thus, benefiting the entire country by reduction in existing burden of spare capacity and ensure better utilisation.
In this regard KE has categorised its IGP into a priority list, a secondary list, and other (contingency) list.
As part of its priority list of projects, KE has been steadily making progress on various fronts. The proceedings of the Technical Committee (TC) for the development of Jamshoro Coal Power Project, which was formed by Power Division through its notification of November 3, 2022, have been progressing. Several meetings have been held by the TC since its inception.
KE has furnished detailed assessment reports along with the business case report for conversion to the TC which was submitted on August 31, 2023.
Pursuant to submission of the IGP, in line with the decisions carried out during the meeting held on September 11, 2023 it was decided that a comparative analysis between the GENCO Holding Company Limited’s (GHCL) proposal for delaying the conversion of unit-01 to 100% local coal, and KE’s proposition of its earlier conversion should be carried out.
KE presented its analysis to the forum in the meeting of KE’s IGP held on September 14, 2023, where the results of the analysis confirmed that the economic benefit reaped due to earlier conversion outweighs the same due to delayed conversion.
Central Power Purchasing Agency- Guaranteed (CPPA-G) was also requested to appraise the workings of KE. In this regard after several deliberations CPPA-G also concurred with KE’s proposal that the earlier conversion of Unit-01 has a positive outcome and will be more beneficial for the economy.
It was also directed that KE and the Private Power Infrastructure Board (PPIB) that have held elaborate discussions with DG Law PPIB to deliberate upon adopting the most efficient legal route for its development and the following structures were found viable:
In parallel to KE’s facilitation of the Unit-1 conversion: Development Mode to be IPP to carve out Unit-2 into an SPV which will enter into a Shared Services Agreement (SSA) for use of common facilities with GENCO (owned by JPCL) but in this matter the challenges are: (i) for 100% KE equity, privatisation may still be required;(ii) single O&M contractor will be needed with joint responsibilities of both the units; and (iii) residual risk of non performance under SSA.
According to KE, both Units are to be carved out into an SPV and bidding process is conducted for Unit -2, where the concession agreement would include the ownership of Unit -1, as well.
CEO KE further stated KE would continue to work with PPIB and other forums, to further fine tune the most viable structure that could result in the optimal and least time-consuming route to materialise the transaction of Unit -2.
Commenting on the matter of Siddiqsons Energy Limited (SEL), KE said that it is in close liaison with PPIB for the workings being undertaken by the Special Technical Committee (STC) constituted by PPIB’s Board for finalising the way forward.
The STC has directed the CPPA to carry out a cost benefit analysis in order to evaluate the impact of the addition of SEL in KE’s network. Accordingly, KE was also requested to provide the required data for the analysis, which also involved several discussions with CPPA’s team to align the workings.
In light of the minutes of the meeting conducted by the STC on September 28, 2023, CPPA-G is required to share the outcome of its analysis within a week’s time. Moreover, NTDC is to also provide its views and detailed analysis for evacuation.
As an alternative, KE is in discussions with, and in the process of formally engaging PPIB to finalise the modalities for the issuance of Request for Proposal (RFP), for the development of a 330-MW mine-mouth project at Thar.
With reference to the option of conversion of two units of existing furnace oil based HUBCO’s Hub Plant to 100% local coal, KE and HUBCO’s senior leadership are engaged in the initial discussions.
Further, KE is also working with the project sponsors of Port Qasim Electric Power Company Limited (PQEPCL) for power procurement and its conversion to 100% local coal and has also executed a Memorandum of Understanding (MoU) with Oracle Power, which is part of KE’s secondary list.
In addition to the base load options under its IGP, KE is also active in its quest for long-term sustainable solutions for providing low-cost power to the residents of Karachi. KE is working with several stakeholders on a multi-pronged strategy for the development of Renewable Energy (RE) and hydel projects.
For the development of RE projects having combined capacity of more than 600-MW, RFP documents are currently under the approval with National Electric Power Regulatory Authority (Nepra). For hydel, the STC formulated by PPIB’s board on 82.25-MW Turtonas -Uzghor Hydro Power Project has achieved significant progress for the changes in power off-taker from CPPA to KE.
“We are also working with Pakhtunkhwa Energy Development Organisation (PED0) of Khyber Pakhtunkhwa for the power off-take of projects in KP; the draft MoU agreed amongst KE and PEDO has been sent to the Energy & Power Department of KP for concurrence,” Moonis Alvi said adding that KE’s engagement with AJK Power Development Organization (AJKPDO) has also progressed, with the MoU draft awaiting the approval from AJK Prime Minster and is expected to be executed soon.
