Nuclear option should be considered to beat high fuel cost and ensuring sustainable economic growth
Interview: Frank Scherschmidt, CEO Karachi Electric Supply Corporation (KESC)
AMANULLAH BASHAR, Senior Correspondent
Feb 26 - Mar 04, 2007
The on-going power crisis in Pakistan in the backdrop of costly fuel should be sorted out in three phases - enhancing power generation through conventional gas-fired system on short-term basis; switching to alternate resources like coal-fired system on medium-term; and finally laying focus on nuclear power generation on long-term basis.
CEO Karachi Electric Supply Corporation (KESC) Frank Scherschmidt accompanied by Principal Information Officer Syed Sultan Hasan made these recommendations in an exclusive interview with Pakistan & Gulf Economist (PAGE).
At present over 500 nuclear power stations are in operation around the world while on an average 5 new units are coming up per year. In fact, the developing economies like Pakistan can beat the high cost of conventional power generation by switching over to nuclear power. It is not only cost effective as compared to conventional system but environment-friendly as well, for it does not pollute the environment by emitting carbon or other toxic gases. Though the cost of such projects is much higher as compared to the conventional ones, yet it offsets the project cost by producing cheaper electricity to the level of Re 1 per unit as compared to Rs4 in the conventional system. However, to address the issue on immediate basis we have no option but to look for conventional units while switching to nuclear power can be considered on long-term basis.
Actually, the focus of discussion with the KESC chief was to update our readers with the efforts being made by the new management for improving the power supply to this mega city, especially in view of the ensuing summer which has always been a painful experience for the people of Karachi due to frequent power breakdowns and fluctuations coupled with scheduled or unscheduled load-shedding.
Looking confident over what the KESC has done so far for improving the utility's network, Frank said in a firm tone that the new management has assumed the responsibility with a passion to ensure uninterrupted power supply and rising to the expectations of the people of Karachi.
In this respect, he said the new management has injected Rs15 billion so far besides financial assistance from the government for bringing improvement in power generation as well as the distribution system, "which was found in a highly dilapidated condition when we took the charge". The breakdowns, shut-downs, fluctuations, etc. were the logical consequences of the heavy overloaded distribution network all over the city.
In order to address the perennial issue of over-loading, the KESC task force is working day and night to offset the pressure by installing a chain of new Pole Mounted Transformers (PMTs) around the city. So far, the KESC engineers have installed around 1000 PMTs and this system improvement would continue till the time we achieved the desired level of load system. As a result of these efforts and enhanced power generation capacity, people would be feeling a sense of relief in the coming summer as compared to the situation of the previous year. "We are on it and will get it done in the days to come. We have come to stay here with an aim to make KESC a world class utility," Frank observed.
Demonstrating a computer-aided monitor which mirrors the entire network of grid status of the city, Frank said with the application of information technology devised by Oracle, we are now in a position to check the entire system at a glance which helps indicate the working of 56 grid stations in the system. The problem areas like Liaquatabad, North Karachi, Malir, etc. would be the major beneficiaries of the computer-aided system, particularly in attending and removing the complaints more efficiently.
Syed Sultan Hasan, while explaining the steps taken for improving power generation, said that currently KESC was in the process of setting up new units of 200mw capacity each and another of 500mw in two phases. The first unit of 200mw capacity being set up in Korangi would come into operation by mid 2007 while the second one of 500mw is scheduled to come on line by 2008. Besides invigorating the power generation from our own resources, we are also negotiating with the government and the private sector for bulk power generating units.
Though Frank declined to identify the party intending to set up the coal-based unit, he indicated that negotiations were underway for setting up a coal based power-generating unit of 1000mw with a private sector party. This unit would probably be set up in the close vicinity of Thar coalfield. Apart from this bigger unit, we are about to get power supply from two additional sources, of which one is wind power 50mw unit in lower Sindh and another of 80mw being set up in Defence Housing Authority. These two units are expected to start power generation by June this year.
"With the renovation of Bin Qasim Units, the generation capacity from our own resources has improved to 1500mw, however, we are still facing a shortfall of 1000mw. The deficit is being overcome by importing 600mw from WAPDA and two small IPPs i.e. Gul Ahmed and Tapal Energy, each supplying 125mw. Other source of supplies is Pakistan Steel (50 mw) and KANUPP (80mw)."
Replying to a question, Frank said KESC has no objection on the arrival of new IPPs in his franchise area, "yet we would not welcome the small ones because they are not only expensive but also unsustainable source of power supply". Hence the focus is on bulk power generating units.
Syed Sultan Hasan observed that efforts are being made in all directions for bringing improvement in the system. Besides the technical side, we are also in the process of forming a consumer council, which would be represented by all the stakeholders, especially the corporate, industrial, commercial and representatives of the people. As a responsible corporate entity, we are in touch with the representatives of the city government who are also reciprocating our gesture of goodwill in a positive manner.
Frank said that the new management is also taking care of its workforce as a responsible corporate entity and its HR policy is to do away with the existing two cultures in the organization. Currently, about 50 percent of the total staff was on contract while the remaining 50 percent were regular employees. We are moving towards the goal of doing away with this disparity among the staff by giving them equal status in their workplace from where they earn their bread and butter. This would hopefully inculcate a new spirit and sense of association in the people associated with the KESC, he observed.
It may be recalled that the Karachi Electric Supply Company Limited was incorporated on 13th September 1913 under the Indian Companies Act, 1882 as amended to date vide the Companies Ordinance 1984. The company is listed on Karachi, Lahore and Islamabad stock exchanges. The Government of Pakistan took control of the company by acquiring majority shares in 1952. The Ministry of Water and Power looks after the affairs of the company at federal level.
The company is principally engaged in generation, transmission and distribution of electric energy to industrial, commercial, agricultural and residential consumers under the Electricity Act-1910 as amended to date & NEPRA Act-1997, to its licensed areas. The licensed area of KESC is spread over entire Karachi and its suburbs up to Dhabeji and Gharo in Sindh and over Hub, Uthal, Vindhar and Bela in Balochistan, The total area covered is around 6,000 square kilometers.
POWER GENERATION PLAN
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NOTE: KANNUP to be retired in 2019
SOURCES: Planning Commission of Pakistan