Imperatives of Energy Loss Reduction

By Aurangzeb Soharwardi (published on 7 december 2009 in money plus magazine The Nation)

World is laying a lot of emphasis on over all Energy Loss Reduction to make energy sector more viable and compatible. Two of the most significant aspects of Energy Loss Reduction are : Technical upgradation of the gas and electricity infrastructure- Controlling energy theft & waste. Pakistan is exploring means to meet energy requirements as the country is said to be facing energy deficit of 45 percent against national requirements by 2015 and demand and supply gap would further widen to 65 percent. Pakistan’s per capita energy consumption is the lowest of the six most populous countries on earth (China, India, the U.S., Indonesia, Brazil, and Pakistan). U.S. per capita usage is highest, with 56.6 BOE per year, followed by China’s 9.4 BOE. But Pakistan is racing to catch up, and its energy consumption growth rate is second only to China’s. Between 2000 and 2006 its total energy consumption grew at an average yearly rate of 5.5 percent (China’s was 9.8 percent). Pakistan has 25.1 tcf of proven gas reserves, and currently produces around 0.8 tcf of natural gas per year. Natural gas producers include Pakistani state-owned companies Pakistan Petroleum Ltd. (PPL) and Oil and Gas Development Corporation (OGDC), as well as BP, ENI, OMV, and BHP. Currently ,the largest productive fields are Sui, by far the largest at 650 mm cfpd, Adhi and Kandkhot (120 mm cfpd), Mari, and Kandanwari. Pakistan’s demand for natural gas is expected to rise substantially in the next few years, with an increase of roughly 50 %, according to Pakistan’s oil and gas ministry. Pakistan also plans to make gas the “fuel of choice” for future electric power generation projects. This will necessitate a sharp rise in production of natural gas, and also has generated interest in Pakistan in pipelines to facilitate imports from neighbouring countries. power sector consumes 33.5 per cent of the total natural gas consumed in Pakistan, Industry consumes 23.8 per cent, domestic consumers 18.10 per cent, Fertilizer 15.60 per cent CNG 5.40 per cent and commercial outlets 2.7 per cent. Much of Pakistan’s increased natural gas demand will be satisfied by increased domestic production. The country is said to be facing shortage of gas by 2011 and the imported gas would be stored in the underground storages as reserved stocks. In Pakistan, the energy requirements are increasing after the use of gas in auto sector due to which the demand has hiked by 40 percent in the country. Despite importing 2.2 billion cubic feet gas from Iran, Pakistan would import 3.2 billion cubic feet gas from Turkemanistan and it will be shared by India and Pakistan. Gas is being supplied by SSGPL & SNGPL companies in Pakistan. The major issue confronted by the ENERGY sector is the theft and wastage of gas and electricity. The gas companies make a lot of efforts to prevent gas theft in domestic ,commercial and industrial sectors, However the success rate is not very satisfying. FIA has recently detected a massive gas theft scam involving CNG stations and industrial units, causing an annual loss of over Rs 11 billion to the national exchequer. This was done by fixing a remote controlled electronic device in meters for reversing and stopping them. The FIA has forwarded the criminal findings to the Ministry of Petroleum and Natural resources, which in turn is reported to have constituted a committee headed by Director (Technical) for further investigation of the matter. The FIA and the committee has given suggestion to the government to take action against the criminals under 409 PPC, which relates to tampering. According to the FIA investigation, 70 percent of Rs 11.1 billion loss was being caused by CNG stations, 20 percent by industrial units while commercial and domestic consumers caused 5 percent loss to the national exchequer. To control gas theft, Sui Northern Gas pipeline (SNGPL) has imported latest electronic meters from America for the prevention of gas theft here on Thursday. According to details, after the installation of these gas meters incidents of gas pilferage would be decreased up to 95%. In the first phase commercial meters would be replaced with these electronic meters. With these latest electronic meters any officer will be able to check the meter readings from his mobile while these meters can also monitor from newly established Monitoring cell in the head office. Same way, Pakistan is losing billions of rupees annually on account of electricity theft and system losses in the power sector. If managed properly, very one percent of system-wide loss reduction represents $97 million in savings to Pakistani consumers and additional power for economic development. Electric power distribution companies in Pakistan lose almost a third of the electricity they purchase, and some companies lose 50 percent or more. The current circular debt of billions of rupees, which could not so far be repaid to power producers and has been hindering power generation, is also partly attributable to lower receipts of power distribution companies. PEPCO ,which has the responsibility to provide electricity to over 18 million consumers has formulated a strategy for energy loss reduction encompassing two main components: consistent System amelioration focusing on technical advancement and equipment efficiency along with controlling energy theft & waste. The US has pledged to support Pakistan for reducing its energy losses. It will pick up the 4 loss making companies which will be revamped and consistently monitored. Right now the distribution losses have jumped up to 28 percent on average, but some of the loss-making distribution companies are showing their losses in the range of 40 of 60 percent. If the system losses get controlled then the power sector will definitely get a boost in the form of system compatibility and energy efficiency . PEPCO’s energy loss reduction plan would save 300 MW electricity through system reinforcement.. .IESCO , negotiated the loan of US$ 58.496 million with World Bank for the financing of 2nd year of 6th STG program and energy losses reduction program. Recently, significant investment amounting to Rs. 4.13 billion was made in secondary transmissions and grids (STG) project and distribution of power and energy loss reduction program for the up gradation of the system. The Government of Pakistan intends to apply for a loan in the amount of approximately US$387 million from the International Bank for Reconstruction & Development (IBRD) towards the cost of the Proposed Electricity Distribution & Transmission Improvement Project, encompassing, Specialized studies, such as: Power Market Survey; Distribution System Planning; Financial Projections and Investment Planning; Materials Requirements Planning; Cost-of-Service Study; and Environmental and Social Analysis. For IESCO and MEPCO, the proposed Project scope includes investment programs in the 132-kV and 66-kV Sub-Transmission Grid (STG), and Energy Loss Reduction (ELR) in the 11-kV and 0.4-kV networks. LESCO’s component of the proposed Project includes similar scope of the STG investments only. HESCO’s component will also include STG and ELR investments, but with greater emphasis on loss reduction measures. Generally, the STG investments include installation of new, and augmentation, conversion, and rehabilitation of the existing grid stations, construction of some new transmission lines, and conversion of transmission to higher voltage. The ELR investments include rehabilitation of the distribution network, earthing of distribution transformers, installation of sectionalizers, replacement of defective meters, installation of capacitors etc. NTDC Component of the Project includes construction of a new 220-kV substation at Kassowal, with associated 220-kV and 132-kV lines (construction of the 132-kV lines from the Kassowal substation will be the responsibility of MEPCO, at whose service territory the substation is located. The other major component of losses reduction is Electricity theft being a chronic problem in which many domestic, commercial and industrial consumers are said to be involved. Electricity theft reduces revenue of power distribution companies, as about 80 billion annual loss and they are perpetually faced with financial difficulties and cannot bring about improvement in their power distribution system, by initiating new projects.. Electricity theft also leads to waste of precious national resource. By effectively checking power theft and minimizing transmission losses the load shedding could also be considerably reduced. Electricity theft can be in the form of fraud (meter tampering), stealing (illegal connections), billing irregularities, and unpaid bills. In a recent research world wide, Estimates of the extent of electricity theft in a sample of 102 countries are undertaken. The evidence shows that theft is increasing in most regions of the world. The financial impacts of theft results in reduced income from the sale of electricity and the necessity to charge more to consumers. Electricity theft can be reduced by applying technical solutions such as tamper-proof meters, managerial methods such as inspection and monitoring, and in some cases restructuring power systems ownership and regulation. PEPCO recovers outstanding bills and gets electricity thieves arrested by the police as its campaign against theft of electricity. PEPCO has declared 2009-2010 as year of theft prevention, and has taken concrete steps against electricity theft.. Special task force has been constituted to safe guard the national resource of electricity from theft. The managing director of (Pepco) has directed chief executive officers (CEOs) of power distribution companies (DISCOS) to eliminate power theft by taking stringent and pragmatic measures. PEPCO has detected 23,000 theft cases in last two months and the culprits were handed over to police, after registering the cases against them. Up till now about 3.5 billion rupees have been recovered from power thieves A media campaign has also been launched by PEPCO to persuade general public to report electricity theft to PEPCO offices on fax NO 042-9202637 with a toll free number 0800-84338 and E – Mail Distribution companies have recovered large sums in outstanding amounts and arrested several hundred people for electricity theft. Following the orders, LESCO teams raided and found electricity thefts being conducted on 17 agricultural tube wells in Muridke. During raids in Hujra Shah Muqeem, 90 people were arrested for electricity theft from main transmission lines. The officials also arrested several steel industries’ owners through the remote metering system and detected outstanding bills worth Rs 30 million. The Multan Electric Power Company (MEPCO) has unearthed 52,026 cases of electricity theft and recovered outstanding bills worth Rs 42.9 million. A special MEPCO team checked 13,003 commercial, industrial and tube well connections, detected 1,278 cases of theft and recovered Rs 4.6 million. The Peshawar Electric Supply Company (PESCO) lodged 12,663 complaints against defaulters and recovered Rs 224.87 million. Monitoring teams of the Hyderabad Electric Supply Company (HESCO) confiscated six stolen transformers, 10 water pump motors, 250 metres of electric wire and five electricity poles during raids in Hyderabad.. Besides these measures, A power company in Pakistan has obtained a decree – or fatwa – from 12 senior Islamic scholars, declaring the theft of electricity a sin.. People have to realize that stealing electricity is as illegal and immoral as any other form of theft. The 12 scholars said that, according to Islamic Sharia law, unpermitted use of any commodity, and gaining benefit from it, was “sin, theft and usurpation”. Legal action against the thieves is fair, and allowed under the teachings of Islam. Much of Pakistan is suffering power problems, caused by increases in demand and the theft from the electricity grid.. PEPCO has also introduced moder n metering and billing system to control electricity theft, monitoring consumption patterns and to ensure accurate billings. Lesco had already started online digital reading system, which would help consumers to see and check meter reading on internet. Digital meters had been installed in Shadbagh division and further linked with Lesco HQ at Lahore. Lesco has also introduced seven new Laboratories titled “E PRAM System” to stop over billing and electricity theft. With a comprehensive plan, effectual strategies and pragmatism, the Energy Loss Reduction is being pursued as a long term and consistent policy. This will not only improve the technical performance of energy sector but also will strengthen the sector financially to reduce its debts.

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