ISLAMABAD - The National Electric Power Regulatory Authority (NEPRA) has noted that Discos have failed to show any improvement in reducing Transmission and Distribution losses as their overall losses have been recorded as 17.95percent for 2016-17.

On the recovery Nepra said that apart from Hesco, Pesco and Iesco which improved upon their recovery position, none of the other Discos was able to improve its position over the previous year, said the State of the Industry Report 2017, released by Nepra here.

The report said that Lesco managed to stay at the same level of good  recovery  ratio in the FY 2016-17, whereas Fesco, Mepco and Gepco could not match their performance of the last year as their recovery dropped by approximately 3percent during the FY 2016-17.  Qesco’s recovery position deteriorated drastically during the FY 2016-17 as only 43.55percent of the amount billed was recovered.

Regarding the T&D losses, the Authority noted that as a whole, DISCOs did not show any improvement in transmission and distribution losses, as their overall losses have been recorded as 17.95percent for both the years.

The losses in Hesco increased by 4.29 percent in the FY 2016-17 over those of the FY 2015-16. Sepco also showed slight increase in its losses.

Losses of Mepco also increased by 0.46percent; however it is a matter of concern that one of better Discos i.e. Fesco could not reduce or even maintain its losses at the FY 2015-16 level of 10.24percent, as its losses in the FY 2016-17 increased to 10.57percent.

It is also noted that the Discos have obvious, lack of managerial capacity and skills, mindset to not go for such projects which may bring improvements in this area; for instance increasing metering at all levels to trace flow of electricity top-down, automatic metering and centralised monitoring.

Long standing efforts for passing on the actual losses without any apparent desire to lower losses, have in fact encouraged Discos to conceal their inefficiencies under this head.

Discos seem contended with their performance levels, and that approach at this cross-road where the Federal Government has inducted a large generation capacity to the system may drag the whole sector down if immediate steps to correct this position are not taken.

Nepra has termed the performance of all the government owned Gencos including Genco-I. II, III and IV unsatisfactory.

It is noted that during the FY 2016-17 about Rs. 39 billion has been paid to Gencos on account of capacity payments, while around Rs. 156 billion were charged on account of energy payments. Nepra urged the Ministry of Energy to phase out these facilities in view of their inefficient and uneconomic role. Due to their high operating costs, some of these plants may be totally closed down even if their capacity costs are continued to be paid, to minimize economic loss to the sector.

Regarding the hydropower the report said that the installed capacity of Wapda hydropower remained at 6,902 MW in the years 2015, 2016 and 2017; however, the 31,091 GWh generated in the FY 2016-17, shows a decrease of 2,342 GWh from the last year.

Regarding the monitoring of different hydropower projects was carried out in the year 2017 to check their performance according to the terms and conditions set in Licence, PPA, Tariff Determination and other relevant rules and regulations.

Nepra has noted the unsatisfactory performance of Malakand-III (81 MW), Jinnah (96 MW) and Khan Khwar (72 MW) Hydropower Plants.

Regarding the NTDC transmission system Nepra said that as of 30th June 2017 that out of 33 transformers at 500/220 kV level, 13 transformers (39percent) are loaded above 80percent of their rated capacity. Similarly, out of 143 (one hundred forty three) 220/132 kV transformers, 79 transformers are overloaded, representing around 55percent overloading in the system.

Regarding outages on NTDC Transmission Lines (500 kV and 220 kV), the report said that the number of planned and unplanned outages in the FY 2016-17 have increased as compared to the FY 2015-16 at 500 kV and 220 kV levels.

As for duration of outages the total duration of planned outages increased in the FY 2016-17 as compared to the FY 2015-16, for both 500 kV and 220 kV levels. For unplanned or forced outages, the total duration reduced in the FY 2016-17 compared to the FY 2015-16:

Regarding loading position of power transformers of Discoss system, the report said that on an overall country basis overloading on power transformers has slightly reduced in the FY 2016- 17 from that of the FY 2015-16 but it is still very high, as 36.82percent of the total power transformers in the DISCOs are overloaded, pointing to potential problems.

On the country-wise overloading on 11 kV feeders of Discos the report said that it has slightly increased, as 29.00 percent of the total feeders are loaded above 80 percent compared to 28.14percent last year.

On the overloading of distribution transformers the Nepra report said that in case of Lesco at 30.13 percent is the highest among Discos, followed by Pesco and Sepco. Lesco has the worst record of overloading of distribution transformers. Similarly FESCO has very serious issues to tackle with the overloading of its power transformers.

Regarding K-Electric the report said that by March 2018, KEL had installed capacity of 2,261 MW through its own power plants whereas IPPs and 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. Inability of KEL to effectively increase its generation capacity has made it dependent on external power sources, including the import from NTDC system.

During the FY 2016-17 also, in addition to purchasing power from IPPs, KEL imported around 650 MW of power from NTDC on regular basis.

The energy generated during the FY 2016-17 through KEL own power plants is noted as 10,147 GWh which shows a decrease of 176 GWh as compared to the previous year figure i.e. 10,323 GWh; a decrease of 1.7percent. During the year KEL continued to underutilize its own generation power plants and it was also noted to ignore merit order operation of its power plants.

On the recovery position of KEL, Nepra said it is also not satisfactory as its recovery position has worsened than the last year. It is noted that the domestic consumers have a 51percent share in total energy billed by KEL however; it could recover only 70percent of the amount corresponding to that energy. Unless KEL takes effective measures in this category, it would be quite difficult to improve the overall financial health of the company.

On the power generation in the country, Nepra said that sufficient generation capacity has already been added in the system resulting in considerable improvement in load-shedding position all over the country.

Evacuation of power from these facilities has put extra burden on transmission and distribution sectors. Infrastructure deficit and absence of performance improvement in these sectors may hamper the economic benefits foreseen due to huge investment in the generation facilities.

Installed power generation capacity of Pakistan as of 30th June, 2017 stands at 28,399 MW of which 26,186 MW is connected with NTDC system whereas 2,213 MW is connected with K-Electric Limited (KEL) system. Since 2013 till date, more than 7,000 MW has been added to the generation facilities connected to NTDC system.

Although it is planned that by 2024-25 the installed capacity will touch 62000 MW, but the Authority noted that the final installed capacity of more than 62,000 MW may not be achieved as some of the power projects including hydro-based projects indicated to be inducted from 2022 to 2025 require extensive technical and financial prerequisites to complete.

Regarding K Electric the report said that till 2020, KEL can barely meet the expected demand at peak times and outage of a power plant or even, outage of a single unit of around 200 MW may result in overall breakdown of the system. Even the surplus expected in 2021 would not be enough to operate KEL system with technically prudent margins:

Regarding use of different fuel in power generation the report said that in the FY 2016-17 about 9,000 MW is based on Gas/RLNG, which increases to 12,626 MW by the FY 2020-21, however no further addition is foreseen till the FY 2024-25.

Share of oil based generation capacity declines from 25.91percent in the FY 2016-17 to 10.91percent in the FY 2024-25. Share of coal-based generation increases from 3.09percent in the FY 2016- 17 to 19.56percent in the FY 2024-25 mainly on Thar Coal based projects.

Hydro-based generation capacity also increases from about 7,000 MW in the FY 2016-17 to 20,676 MW in the FY 2024-25 representing a share of more than 33percent in the overall installed generation capacity.

Regarding future energy pattern, based on future projections, it is expected that the energy from Furnace Oil and High Speed Diesel based power plants will reduce from around 32,000 GWh in the FY 2016-17 representing about 31percent of the energy generation in NTDC system, to around 17,000 GWh in the FY 2017-18 (14percent of the total) to a negligible level in the coming years. Indigenous gas and LNG based energy is expected to account for around 40percent of total energy generated in the FY 2019-20 compared to 29percent in the FY 2016-17.

The report proposed that although LNG is a cleaner fuel, the Federal Government may look into replacing it by construction of large and small hydropower projects through public-private partnership.

A preliminary working shows that any slippage of 1 Rupee against US dollar would add, roughly Rs4 billion annually, to the imported fuel bill for the planned generation facilities in near future.