Rpp Rental Power Plants
Rental plants are simple cycle plants and consume marginally more fuel than combined cycle power plants which are normally set up as Pips. Despite the fact that rental contacts are between 3-5 years and not 20 years (as with Pips), rental tariffs are low. When lower tariffs to rental plants are taken into account and a further allowance made for higher fuel costs, the difference is almost equal or marginally higher in case of rental plants. Therefore, it is entirely incorrect to suggest that rental power costs are substantially higher than those of Pips.
Other advantages of rental power Rental sponsors have taken a Jump of faith and are investing hundreds of millions of dollars in fast-track development of these rental plants. Sponsors and lenders are uncomfortable that they are being subjected to misplaced, ill-informed media trial sponsored by bad interests who do not want to see power shortages removed on priority and are vocal in their criticism of individuals and companies setting up rental plants, which have been awarded transparently.
Government of Pakistan has no liability to pay for setting up of rental plants, rental plants are paid for electricity delivered to the grid 60 days in arrears, Government of Pakistan takes no responsibility for payment of loans taken by rental sponsors, and rental plants are successfully set up in 6-8 months whereas Pips take 3-4 years. If anyone has better solutions to resolve the power crisis on an urgent basis, they should come forward with concrete proposals for public and private consideration.
CONS Impact on fuel demand The rental power plants would increase the Pakistani power sectors furnace oil needs by 29 percent, driving up its import bill and adding to pressure on the rupee and currency reserves. Pakistan requires 35,000 tons a day to feed its thermal power plants and the installation of the Reps will increase demand to 45,000 tons, officials say. The country imports about 80 percent of its oil. It spent $9. 5 billion on the import of 10. 6 million tons of petroleum products and 7. 8 million tons of crude oil in the 2008/09 Lully-June) financial year.
Impact on net exports Since we import most of our oil needs, and after the implementation of Reps, our demand for oil will increase, this means we will have to import more oil into our country. On a larger scale this act will put a very negative impact on our net exports as more imports will result in greater import-export deficit. Thus, more discomposes More fuel consumption Analysts say that RSI. 80 million a month for generating 51 MM is spent for the Turkish ship producing nuclear power in the port of Karachi.
That’s mainly because of the later findings that rental power is eating up more fuel than expected, even more than the Independent power producers. This is a bad sign for future rental power projects. Impact on gross domestic product Senior economists, portrayed in May this year, a highly depressing picture of the decline in the productivity of Pakistanis industrial sector caused mainly by power loading’s, asserting that overall loss of industrial production had been as high as RSI 210 billion during 2008 and that accounted for about 2 per cent of the country’s Gross Domestic Product (GAP).
Other disadvantages Many opponents say the mostly second-hand equipment will be less efficient and that the tariff will rise. They argue that the government would be better off spending money on upgrading and using idle existing capacity. Some opponents also say the option is being supported by corrupt politicians hoping for kickbacks. WHO SAID WHAT ABOUT MY PAPER? The Rental Power Plants would significantly enhance the cost of production which will cake survival of the industry more difficult and create more problems for the fragile economy.
Business community said the Government should fully protect the national interests before going for the Reps, as the price of electricity produced by them would reportedly go further up by 31-45 percent. Said Mongol, President Islamabad Chamber of Commerce and Industry while chairing a meeting here, said, There is no enough gas available in the country to meet the Reps needs. While no arrangements has been made for transporting of the alternative fuel or furnace oil to the Reps, which could plunge this whole project into ruble and waste precious resources, he added.
Economists of eminence like Shad Caved Burk (who later wrote articles in newspapers), Sartor Aziza, DRP Kamala Hussein, Aisha Shahs Pasha, DRP Perez Has and Shad Kara were of a unanimous view, at a seminar that a good wheat crop prevented some damage in the agricultural sector, otherwise the loss to the national economy could have risen as high as RSI 400 billion as rice, sugarcane and cotton production fell although varying in the degree of yield. The textile sector suffered the major damage losing RSI 25 billion that adversely affected Pakistanis exports that clines too value of $1 billion.
This scenario had an overall adverse impact on the balance of trade, which was badly disturbed in view of imports that mounted beyond precedent, weakening the overall performance of the national economy. After reading all these pros and cons, I have come up to a conclusion that the situation emerging envisions that the people cannot wait for multi-purpose dams for irrigation water and power generation because such projects usually take eight to 10 years to complete. Similarly, coal and furnace oil-fired independent power plants unsure two to three years before they are able to produce electricity.
Seen in the background of a colossal industrial and agricultural loss, particularly during the year 2008, the only solution we have right now is to “quick fix” the gap between demand and supply of electricity and that is by Rental power plants. Even though it might be expensive but I don’t see any other way to fulfill rising demand needs. Although the government should work with full priority to build Pips after filling the gap. And keeping in mind that the demand will keep on exceeding in the coming years.
