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Electricity Power transmission updates

Investing in grid transmission

BR

In the power sector, investment in transmission system is as important as the investment in the generation capacity. In the past, it has been observed that the focus had remained heavily on the generation side while investment in transmission was put on the back burner, which ensured that the country fails to benefit from enhancement of generation.

That is why NEPRA does an annual performance evaluation report of NTDC and KE, and it is important to highlight the findings and recommendation of the regulator. Before delving into NEPRA’s findings, it is worth mentioning that a few days back the foundation stone for 765KV grid has been set up in Mansehra which is expected to be completed in 3 years. This will ensure delivery of 2160 MW from Dasu hydropower project to the national grid.

Such investments in timely fashion are necessary to ensure efficient use of electricity and allowing plants to operate on economic merit order. Otherwise, the least expensive plants which do not have full access to transmission network are prevented from operating while the country ends up relying on expensive plants which are connected to the grid.

These are real challenges, and the country has been facing them for several years. Especially since the addition of new power plants over the past few years. NEPRA Performance Evaluation Report for NTDC and KE contains some insights on these challenges.

NTDC network has improved either through investment or system optimization to reduce the energy not served (ENS) which is the wastage of electricity on its network. This showed a 93 percent decline in one year – from 130.2 million units to 9.4 million units. As a result, financial bleeding has reduced from Rs 888 million from one year to Rs 90 million to next. Investment over the past five years amounts to just Rs3.8 billion.

There are technical constraints which have been identified by NEPRA where congestions were identified in Gatti, New Multan, PeeranGhaib, and Lahore-Sheikhupura. The financial impact of plant operations in violation of EMO due to transmission constraints was calculated at Rs3.7 billion.Hence, there is a dire need for continued investment.

KE also broke ground on the first 500 kV grid station at KKI to cement its connection with the national grid. Although the frequency of interruptions at lower voltages has increased, the overall performance shows significant stability which is also indicative of progress. NEPRA has recommended the replacement of equipment which has served its useful life especially at the 500 kV Jamshoro grid. This will require investment, a plan for which is also pending regulator’s approval.

The plan costs Rs484 billion which includes the addition of new grids, expanding the network, and maintaining service levels against international benchmarks.Sustaining or improving service levels requires commensurate financial investment. KE is anticipating 30 percent growth in its customer base. If the same benchmark is applied at the national level, it takes total customers from around 33 million to 43 million. And this is just the number of connections. Consumption in unit terms may also increase manifolds.

The country is bringing in various types of generation capacity projects, but transmission and distribution is the ultimate battleground which needs immediate attention as they are responsible for channeling the electricity from source to sink.Timely and adequate investment is also going to benefit the national exchequer in the long-run.

Cheaper power plants may be able to get their electricity to customer doorsteps because of available bandwidth in network. Currently, absence of dedicated transmission line for Shanghai Electric Company Limited leads to load curtailment of Engro Power Thar Limited, and Thar Energy Limited. These are based on domestically mined coal. We should not repeat such mistakes and synchronize transmission and generation investment.

 
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