N.A. ZUBERI MANAGING DIRECTOR PRIVATE POWER & INFRASTRUCTURE BOARD October 22, 2011 “CONVERSION OF...
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Transcript of N.A. ZUBERI MANAGING DIRECTOR PRIVATE POWER & INFRASTRUCTURE BOARD October 22, 2011 “CONVERSION OF...
N.A. ZUBERIN.A. ZUBERI
MANAGING DIRECTORMANAGING DIRECTOR
PRIVATE POWER & INFRASTRUCTURE BOARDPRIVATE POWER & INFRASTRUCTURE BOARD
October 22, 2011October 22, 2011
““CONVERSION OF EXISTING CONVERSION OF EXISTING THERMAL POWER PLANTS THERMAL POWER PLANTS
TO COAL”TO COAL”
INTERNATIONAL COAL CONFERENCEINTERNATIONAL COAL CONFERENCE
C O N T E N T S
Overview of Pakistan Power Sector
Power Plants for Coal Conversion
Issues on Conversion of Power Plants to Coal
Implementation Mechanism for Converting Plants to Coal
Key Features of Mechanism for Converting GENCOs/IPPs to Coal
Conclusion
MW %
Public Sector
WAPDA/SHYDO/
NA/AJK 11,603 52
PAEC 462 2
Sub-Total 12,065 54
Private Sector
IPPs 8,508 38
KESC 1,756 8
Sub-Total 10,264 46
G. Total 22,329 100
Public SectorThermal
4,900 MW
Nuclear462 MW
Public Sector Hydel
6,703 MW
IPPs10,039 MW
PAKISTAN POWER SECTOR
TOTAL INSTALLED CAPACITY
STEAM TURBINE POWER PLANTS
GAS TURBINE POWER PLANTS
COMBINED CYCLE POWER PLANTS
RECIPROCATION ENGINES
POWER GENERATIOINPOWER GENERATIOIN TECHNOLOGIESTECHNOLOGIES
MARDANWARSAK
BANNU
DAUDKHEL
BURHANNEW RAWAT
I.S.P.R
MANGLA
TARBELA
GAKHAR
SAHOWALAK.S.KAKU
RAVI
JAPANKELN.ABAD
SABA
YOUSAF WALA
VEHARI
KAPCO
ROUSCH
UCH
AES
N.G.P.SM.GARH
GUDDU
LIBERTY
DADU
HALARD
LAKHRA
JAMSHORO
KOTRI
HUBCO
KDA-33(KESC)
500 kV Grid Station
220 kV Grid Station
500/220 kV Grid Station
Hydel Power Station
Thermal Power Station
IPPs at 220, 500 kV
IPPs at 132 kV
500 kV T/LINE
220 kV T/LINE
(240)
(3408)
(1000)
(107)
(120)
(195)
(1350)
(310)
CHEP(184)
(355)
(1348)HCPC(126)
(548)
(1655)
(212)
(150)
(850)
(174)(1200)
GAZI BAROTHA
(1450)
CHASNUPPGATTI
BUND RD:
M.GARHGUDDU
JAMSHORO
PAKISTAN POWER SECTOR – TRANSMISSION SYSTEM
G.AHMAD
PAKISTAN POWER SECTOR PAKISTAN POWER SECTOR FUEL MIX (2009-10)FUEL MIX (2009-10)
60% power generation based on gas & furnace oil
Gas becoming scarce
Exorbitant cost of imported oil/HSD
Double-edged sword of gas depletion and higher oil prices
resulted in huge circular debt running in billions
The panacea lies in converting thermal power plants to cheaper
fuels such as coal
EXISTING POWER SECTOR SITUATION EXISTING POWER SECTOR SITUATION
For conventional steam turbine thermal units, the possible option
is to convert them to coal
The benefit of converting the furnace oil plants would be through
savings on fuel cost component
Expedite import of gas or use alternative fuels available such as
LNG for gas turbine or reciprocating engine
POSSIBLE SOLUTIONS TO IMPROVE POSSIBLE SOLUTIONS TO IMPROVE PAKISTAN SECTORPAKISTAN SECTOR
CANDIDATE PLANTS FOR COAL CANDIDATE PLANTS FOR COAL CONVERSIONCONVERSION
Capacity (MW)
Installed Derated
JAMSHORO 850 675
Guddu unit 3,4* 640 580
M.Garh 1370 1130
SPS faisalabad 1,2* 132 100
NGPS Multan Unit 1,2,3 195 120
Sub Total GENCOs 3187 2605
HUBCO Unit 1,2,3,4 1292 1200
AES Lalpir 362 348
AES Pakgen 362 348
SABA Power 134 126
Sub-Total IPPs 2150 2022
Total 5337 4627
Involvement of new Capital Costs
Outage time to dismantle old boilers and
assemble/commission new ones
Additional auxiliary consumption thereby reducing the net
generation capacity
Higher O&M costs
Limitation of space for coal storage & ash handling
Probable reduction of efficiency
Availability of coal, and
Environment degradation
ISSUES ON CONVERSION OF STEAM ISSUES ON CONVERSION OF STEAM POWER PLANTS TO COALPOWER PLANTS TO COAL
Conversion of GENCOs plants to cheaper fuels is
visualized through induction of private sector
contractor(s) in Public Sector Power Stations (concept
approved)
IPPs’ conversion is visualized through devising a
Policy Regime (in process of approval)
IMPLEMENTATION MECHANISM FOR IMPLEMENTATION MECHANISM FOR CONVERSION TO CHEAPER FUELSCONVERSION TO CHEAPER FUELS
CONVERSION OF GENCOs TO CHEAPER FUEL THROUGH CONVERSION OF GENCOs TO CHEAPER FUEL THROUGH
INDUCTION OF PRIVATE SECTOR GENERATIONINDUCTION OF PRIVATE SECTOR GENERATION
KEY FEATURESKEY FEATURES
Induction of O&M Contractor for 10 years through open bidding
No retrenchment of existing staff;
No capital expenditure and no payment of mobilization advance by
GENCOs / Government of Pakistan (GOP)
No upward revision of tariff due to induction of O&M Contractor;
Evaluation & Selection of O&M Contractor through a criteria based on
benefit sharing, percentage of which to be determined through bidding
process;
CONVERSION OF IPPS ON CHEAPER FUELSCONVERSION OF IPPS ON CHEAPER FUELS SALIENT FEATURESSALIENT FEATURES
IPPs to carry out due diligence/feasibility study individually for cheaper
alternative fuels as per their technologies.
IPPs be given one year (or less if their conversion plan require less time)
for conversion during which they will be provided half of their Escalable
tariff component (which covers their returns etc) and full Non-Escalable
tariff component (which covers their debt servicing).
Any saving that would be achieved due to switching of fuels be shared
equally amongst the IPPs and the power purchaser.
CONCLUSION
Conversion of existing thermal power plants to
coal will develop the market for new coal mines –
hence eliminate the MARKET RISK especially for
development of Thar Coal
THANKSTHANKS
US$ Billion
Costs 1st year Benefits 1st Year Net Benefits
GENCOs 1.180 3.599 2.419
IPPs 0.805 2.519 1.714
Total 1.985 6.118 4.133
PROBABLE BENEFITS FROM CONVERSION OF PROBABLE BENEFITS FROM CONVERSION OF SUITABLE CANDIDATE PROJECTS TO COALSUITABLE CANDIDATE PROJECTS TO COAL
BACKUP SLIDESBACKUP SLIDES
CONVERSION ON CHEAPER FUELSCONVERSION ON CHEAPER FUELSSALIENT FEATURESSALIENT FEATURES
Power Purchaser be allowed to legalize the arrangement and any
extensions in the Term of Power Purchase Agreements with IPPs pursuant
to 1994 Policy through Side Agreements without requiring any approval
from any government agency / regulator. For IPPs pursuant to 2002 Policy
necessary permission of regular shall be needed.
Power Purchaser to have right to negotiate and schedule outage timings
and number of units at a time for conversion, as well as fix priority of IPPs
if more than one IPP approach to it for conversion, and the feasibility study
favours one over the other.
Customs duty at the rate of 5% on the import of equipment, machinery and
spares for carrying out Balancing, Modernization and Replacement (BMR).
PRE-DEVELOPMENT OF COAL MARKET – A BASIC INGREDIENT FOR DEVELOPMENT OF SINDH COAL
Conversion of existing thermal power plants will pre-develop the
market for new coal mines – hence eliminating the MARKET RISK
especially for development of Thar Coal. As such we expect fullest
support of GOS in our venture.
COST – BENEFIT ANALYSIS (GENCOS)COST – BENEFIT ANALYSIS (GENCOS)
Costs
Capital Cost US$ 1.15 billion
Increase in O& M expenses US$ 0.032 billion
Environmental mitigation cost (10% of total O&M) US$ 0.001 billion
Total Costs US$ 1.180 billion
Benefits
Fuel Cost Saving using imported coal US$ 3.599 billion
Net BenefitsNet Benefits US$ 2.419 billionUS$ 2.419 billion
COST – BENEFIT ANALYSIS (IPPS)COST – BENEFIT ANALYSIS (IPPS)
Costs
Capital Cost US$ 0.774 billion
Increase in O& M expenses US$ 0.030 billion
Environmental mitigation cost (10% of total O&M) US$ 0.001 billion
Total Costs US$ 0.805 billion
Benefits
Fuel Cost Saving using imported coal US$ 2.519 billion
Net BenefitsNet Benefits US$ 1.714 billionUS$ 1.714 billion