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Express Tribune
10-07-2025
- Business
- Express Tribune
Engro Powergen seeks early gas supply from Badar field
Listen to article Engro Powergen Qadirpur Limited (EPQL) has urged the federal government to expedite the long-pending approval of a supplemental agreement that will allow it to utilise low BTU gas from the Badar-1 field. In a letter sent to Power Division Secretary Dr Muhammad Fakhre Alam Irfan, EPQL Chief Executive Officer Adeel Qamar highlighted that despite completing all technical and procedural formalities, including infrastructure readiness and regulatory approvals, the supplemental agreement remains pending, which was submitted to the Central Power Purchasing Agency-Guarantee (CPPA-G) in August 2024. EPQL, which operates a 225-megawatt power plant primarily on permeate gas from the Qadirpur gas field, entered into an agreement with Petroleum Exploration Limited (PEL) on August 5, 2024 for the supply of 8-13 million cubic feet per day (mmcfd) of low BTU gas from Badar-1. It came after the National Electric Power Regulatory Authority (Nepra) formally approved the use of Badar-1 gas through a determination issued on February 20, 2024. However, the EPQL's proposal to amend its power purchase agreement (PPA) with CPPA-G to incorporate the use of this indigenous gas has yet to be approved. The company has cautioned that continuous delay not only undermines the use of cheaper domestic energy resources but also forces reliance on expensive imported fuels amid peak summer demand. In the letter, the company noted that if approval had been granted by October 2024, EPQL could have generated an additional 122 million units of electricity using the low BTU gas, resulting in estimated savings of Rs787 million for power consumers and $9 million in foreign exchange. 'Infrastructure is ready and we can begin immediate offtake. Moreover, the transaction is based on a take-and-pay model, meaning gas will only be utilised when it is competitive under the economic dispatch merit order,' the CEO said in the letter. Since commencing operations in March 2010, EPQL has contributed approximately 18.9 billion units of electricity to the national grid, saving the country an estimated Rs89 billion and $1.6 billion in foreign exchange by using indigenous permeate gas. The company emphasised that this track record of cost-effective generation underlines the urgent need to begin Badar-1 gas supply. While acknowledging past cooperation from government entities, EPQL expressed dismay over the current lack of progress and called on the Power Division to facilitate early approval of the supplemental agreement. Given the summer energy crisis, the company said that the delay was becoming increasingly costly and counterproductive to the national energy security goals.
Express Tribune
26-02-2025
- Business
- Express Tribune
Govt halts capacity payments to 22 IPPs, saving Rs1.5 trillion
Capacity payments go to the power plants which remain idle and do not produce any electricity but consumers are compelled to pay due to the agreements signed by different governments. PHOTO: FILE Listen to article The National Assembly's Standing Committee on Power was informed that the government has ceased capacity payments to 22 Independent Power Producers (IPPs), resulting in an overall saving of Rs1.5 trillion and expected to provide relief to consumers by reducing electricity costs by Rs4 to Rs5 per unit. The meeting was attended by Power Secretary Dr Muhammad Fakhre Alam Irfan, who briefed the committee on the cessation of capacity payments to 14 oil-based and 8 bagasse-based IPPs. The secretary also mentioned that efforts are underway to terminate payments to additional IPPs. The discontinuation of these payments is projected to lead to substantial savings, with consumers set to benefit from lower electricity rates, he said. Mustafa Kamal also raised concerns over some IPPs claiming that their agreements were terminated under duress. The power secretary responded by saying that several IPPs had violated the terms of their contracts, and these violations were pointed out by the government teams. The IPPs were given the option to either comply or face a financial audit by NEPRA (National Electric Power Regulatory Authority). He further stated that two IPPs refused to cooperate, prompting NEPRA to initiate audits, with advertisements for the audits now published for the non-compliant IPPs. The meeting also discussed an issue concerning the additional 7.8 million units being burdened on LESCO (Lahore Electric Supply Company) consumers. The committee decided to form a sub-committee to investigate the matter further. Committee member Rana Mohammad Hayat expressed concerns over rising bills and increasing WAPDA (Water and Power Development Authority) expenditures over the past three to four years. He questioned the government's response to the growing financial burden on the public and called for clarification on when relief will be provided to consumers. He also raised the issue of local coal's cost-effectiveness in electricity generation, asking for transparency regarding the potential savings. In response, power division officials revealed that the cost of generating electricity using local coal would be Rs4 per unit, compared to Rs16 per unit when using imported coal. Electricity produced from furnace oil costs between Rs30 to Rs32 per unit. Kamal further questioned the long-term strategy, asking about plans for the future if coal-based plants face operational issues, particularly when hydel and thermal plants are phased out in favor of coal. The power secretary reassured the committee that coal plants can be installed within a short time frame. Furthermore, the power division is conducting modern forecasting for the next 10 years, anticipating that many of the furnace oil-based power plants will be decommissioned within the next three years.
