ISLAMABAD: Expressing dissatisfaction over the electricity generation planning and its fuel mix, the Cabinet Committee on Energy (CCoE) on Wednesday ordered immediate lifting of furnace oil from refineries and a 6-month plan envisaging all fuel requirements within a fortnight.

The maiden meeting of the reconstituted CCoE was presided over by its chairman, Minister for Petroleum and Minerals Ghulam Sarwar Khan.

Informed sources told Dawn that the Power Division made a presentation on overall power generation capacity, its dependence on various fuels including furnace oil, liquefied natural gas (LNG), domestic gas, hydropower coal and renewable sources etc and capacity utilisation in different seasons and surplus capacity availability.

These sources said that Minister for Finance Asad Umar was the first to express concern over poor planning in the power sector and fuel utilisation and observed it had adverse impact not only on the viability of the power sector but also on the budget and overall economy. Other participants also agreed to the observations.

The Power Division was therefore ordered to come up with further explanations on fuel supplies with clear targets as to how much generation was desired from each fuel over the next six months which should be a rolling process. The committee wanted the first half-yearly generation plan within 15 days to start with.

It was also reported that local refineries were on the verge of closure because their storages were full to 85-90 per cent capacity in the absence of furnace oil lifting by the power sector while advance estimates were not being provided for s imports and supplies.

Informed sources said the power sector entities were directed to start immediate uplifting of furnace oil from refineries for winter months when hydropower generation would be unavailable for canal maintenance starting last week of December and until end of January.

“We are starting transferring furnace oil from storages of refineries to those of the power plants, beginning with Kot Addu Thermal Power Plant (Kapco) within hours,” an official said.

It was also explained that Port Qasim Coal Power Plant would also be going on annual maintenance in a few days that would necessitate maximum utilisation of Hubco plant which was purely a furnace oil-based plant but remained mostly out of the merit order at present.

At the same time, the Petroleum Division was also advised to gear up refineries for upgradation or furnace oil exports in due course since refining model of none existing refineries was viable due to uneconomic power generation costs compared to the LNG. The meeting was informed that furnace oil consumption may be required in the peak power demand season between June-August next year, otherwise there was no future furnace oil requirements.

During the course of discussion on an overview of power plants on the merit order, it was explained that three RLNG-based plants of about 3,650MW in Punjab (Bhikki, Balloki and Haveli Bahadur Shah) were of ‘must run nature’ and were quite economical and stood at 30-33rd position on the merit order based on fuel cost soon after the domestic gas based plants that mostly captured first 30 positions.

The meeting decided that must run plants should be treated as normal on the merit order and petroleum and power divisions should jointly plan import and consumption of re-gasified liquefied natural gas (RLNG) so that its import could be arranged in a timely manner.

Published in Dawn, November 29th, 2018