Tag Archives: power

Queenslanders face ‘huge’ power price hikes

Updated February 22, 2013 21:08:50

The Queensland Government says the latest electricity price rise is unacceptably high.

The average household power bill will rise by 21.4 per cent from July, or an extra $253 per year, with other household tariffs also going up by between 15 and 19 per cent.

Today’s announcement by the Queensland Competition Authority is only a draft, with a final decision due at the end of May.

The State Government froze the standard tariff for 12 months, but the competition regulator says higher network costs now have to be passed on

Treasurer Tim Nicholls says the Government is now looking at the draft ruling.

“What we’ve seen today in the draft determination by the Queensland Competition Authority is an unacceptably large price rise for electricity prices here in Queensland,” he said.

“This Government is determined to make sure that Queensland families are not kicked in the guts by this huge price rise.”

Treasurer Tim Nicholls blames an over-investment in infrastructure and “excessively generous” solar rebate and green energy schemes for the price rise.

He says he cannot do anything about it now, but can for the future.

The plan may include asking generators and distributors to absorb some of the increase.

“It’s particularly down to the Federal Government in relation to allowing their regulator to allow over investment in the network and not questioning the claims,” he said.

“Now we’ve started as a State Government questioning those claims and that’s why we’ve been able to remove from the Forward Estimates about $2 billion of costs from our companies – that will help in the future.”

Mr Nicholls says electricity network costs, which are regulated nationally, will account for about half of the price rise in Queensland.

He says spiralling network costs have not been brought under control.

“Network costs, which are regulated by the Australian Energy Regulator, will be about 50 per cent of the increase,” he said.

“This really just goes to show I think the failures over the last couple of years of the regulator to stop the gold-plating of networks and price-gouging of consumers.”

The Opposition’s Curtis Pitt says the LNP gave people “false hope” that they could bring electricity price rises under control.

“What we’ve seen today is another broken promise by the LNP,” he said.

“People have put their faith in them to address the cost of living. They said they were going to be able to handle these matters and quite simply they’ve made a promise they could never deliver on.”

Linda Parmenter from the Queensland Council of Social Service says low income earners will be hit hard.

“There’ll be more people who don’t pay their bills and end up being disconnected,” she said.

Topics: public-sector, electricity-energy-and-utilities, regulation, brisbane-4000, bundaberg-4670, cairns-4870, gladstone-4680, longreach-4730, mackay-4740, maroochydore-4558, mount-isa-4825, rockhampton-4700, southport-4215, toowoomba-4350, townsville-4810

First posted February 22, 2013 09:05:33

Coal-generated power here to stay: study

Posted February 19, 2013 10:16:33

Coal will be a significant part of Australia’s power generation mix for at least another 20 years, according to a new study.

University of Queensland researchers say coal-generated power could be halved without compromising the country’s power supply, but they argue it will take decades of “orderly transition” to completely move to clean energy production.

“It’s not possible to make a transition where the lights don’t go out without easing coal down fairly gradually,” UQ Professor of Economics and study co-author John Foster said.

“At the moment, over 80 per cent of our power is generated from coal [and] in the context of our report, Australia is what we call a non-resilient economy in terms of its power – it’s very heavily dependent on one source.”

Mr Foster added that if Australia is to meet its 2050 emissions targets, the time for action is now.

“When you look into the engineering and all the details, you realise what a long time it takes to make these transitions – 20, 30, 40 years is the kind of time scale that you’re talking about,” he said.

“To get 80 per cent [clean energy] by 2050, we’d have to be starting right now with a fairly dramatically important shift.

“If it was nuclear, we’d have to start right now, you’d have to put more into carbon storage.

“So most of our scenarios, we just wouldn’t get to 80 per cent by 2050.”

While the Australian Conservation Foundation (ACF) agrees that Australia’s use of renewable energy will have to ramp up considerably to remain on target, it believes that the production of adequate levels of renewable energy can be achieved within 20 years.

“In the last year alone, solar power has dropped in price by 45 per cent and 75 per cent in the last three years,” ACF climate change program manager Tony Mohr said.

“And that’s led Bloomberg New Energy Finance to conclude that wind power and solar power are both cheaper than new coal fired power plants in Australia right now.

“So I’d say that really, we’re seeing a much faster shift towards renewable energy than we would have thought of even just a couple of years ago.

“In South Australia right now, in September last year, there was a couple of days there where wind power was contributing 55 per cent of South Australia’s total energy supply and in Spain they’ve had records set of about 60 per cent.

“Now that’s what we can do today, so it’s realistic I think to expect we’ll be able to do much better in 20 years’ time.”

Topics: environmental-impact, environmental-policy, electricity-energy-and-utilities, wind-energy, australia

Backlog of timber power poles needing replacement

An audit has found there is a large backlog of condemned wooden power poles needing urgent replacement across Western Australia.

The Economic Regulation Authority has released its 2012 review of Western Power’s asset management system.

It found Western Power has improved its systems since 2011 but was concerned at the large backlog of potentially unsafe wooden poles which had not been replaced on time.

It also found Western Power had increased the time it allows itself to replace poles without documenting any reasons for the decision or carrying out a risk assessment.

However, Western Power CEO Paul Italiano says the utility has improved its management of wooden pole assets and has greatly increased the number of wooden poles it treats.

“In May we made a commitment to Parliament that we would replace or reinforce 39,000 distribution wood poles in 2011/12,” he said.

“We exceeded that target by 1,150 poles.

“In addition we committed to replace or reinforce 61,500 poles in 2012/13 and we are on track to achieve this target.

“We have been working closely with our safety regulator, EnergySafety, to improve the way we assess wood pole risks and we are currently in the process of changing the methodology for prioritising wood poles for treatment.”

The ERA will now require Western Power to give monthly reports on the backlog.

Topics: electricity-energy-and-utilities, perth-6000, wa

9pc drop in emissions from power generators

There has been a 9 per cent drop in emissions from electricity generators during the first six months of carbon pricing, a Senate committee has been told.

Last July the Federal Government introduced a carbon price of $23 per tonne for businesses that are big polluters.

Jenny Wilkinson from the Department of Climate Change and Renewable Energy says that since then, there has been a reduction in demand for energy.

She says the early results are due to several factors.

“Increased uptake of renewables on account of the Renewable Energy Target, changes in manufacturing; there’s a range of different things which are contributing to this,” she said.

“The latest data from the Australian Energy Market operator suggests that emissions from electricity generation have fallen by about 8.6 per cent in the first six months of the year.”

The cost businesses now have to pay are set to increase between now and 2015 when there will be a shift towards a trading scheme that will allow the market to set the charges.

Topics: government-and-politics, tax, emissions-trading, environmental-management, australia

Super Bowl power outage explained

 A New Orleans power firm says the Super Bowl blackout was caused by a faulty device designed to prevent failure of the cables leading to the Superdome.

Entergy New Orleans say the device, called a relay, had been installed between the company’s incoming power line and the lines into the stadium.

The power failure shut down the lights in half of the stadium for 34 minutes on Sunday, halting play.

Entergy said the relay functioned fine during earlier events.

Officials said the device has been removed and replacement equipment would be installed.

Bank of Italy head calls for power to remove executives

Bank-of-Italy-007qBERGAMO: Bank of Italy Governor Vincenzo Visco called on Saturday for more powers for regulators to step in at troubled banks but defended his institution’s oversight of Monte dei Paschi di Siena and said the bank was not at risk of failing.

Responding to criticism about banking oversight in the case of the Tuscan lender, Visco repeated that central bank supervisors had acted appropriately but asked for more powers to remove bank executives in exceptional cases.

“The supervisor should have the power to intervene when based on solid evidence it believes it is necessary to oppose the appointment of (banks’) executives or to remove them” Visco, who also sits on the European Central Bank governing council, said in a speech to a finance conference.

Copyright Reuters, 2013

Power price deregulation comes into effect

The South Australian Council of Social Service (SACOSS) has cautiously welcomed further deregulation of the electricity market that has come into effect today.

The state’s energy watchdog, the Essential Services Commission (ESCOSA), no longer has the power to control the standing contract price for electricity and gas.

In December, the Government announced it would allow default retailer AGL and Origin Energy to set prices, in return for AGL dropping legal action against the commission.

The State Government said the move would prompt fresh competition and lower prices, benefiting 130,000 AGL customers.

Greg Ogle from SACOSS says if prices do not drop, the Government should hand price regulation back to the commission.

“We’re keen for the Government to continue to monitor prices because if the price reductions aren’t delivered we’d like to see the Government step in again and re-regulate the market,” he said.

“There’s no doubt that energy prices are hurting a lot of people in South Australia, a lot of low-income households, and the deregulation and greater competition might deliver some lower prices but that’s not the end of the story.

Mr Ogle says the deregulation needs to be coupled with more support for those who are doing it tough.

“We know energy prices are a great driver of poverty so we’re pleased with anything that will lower energy prices,” he said.

“But we want to make sure that those price reductions are delivered across the board, not just to customers on standing contracts.”

Energy Minister Tom Koutsantonis says the Government will intervene if power companies take unfair advantage.

“We do have the ability to re-regulate if we think that energy companies are beginning to price gouge,” he said.

“ESCOSA will maintain the role of an observer keeping a close watch on what the base price should be.

“If we think energy companies are profiteering to a point where they’re ripping people off, we’ll step back into the market.”

Mr Koutsantonis says AGL will now be forced to compete to retain its customers.

“This deregulation means that their customers are up for grabs, which means that every other energy retailer’s trying to get as many AGL customers to switch,” he said.

“That’s why you’ve been seeing full-page ads by AGL in the paper offering people to sign contracts offering up to a 9.1 per cent discount. A lot of their competitors are offering more.”

Topics: electricity-energy-and-utilities, consumer-protection, states-and-territories, sa, adelaide-5000

First posted February 01, 2013 09:53:49

Power and Water puts infrastructure before debt

Updated January 02, 2013 14:31:57

The Power and Water Corporation says tariff increases will be used to fund building and maintaining infrastructure, not rein in debt.

The Northern Territory Government has increased power prices by 30 per cent and water costs by 40 per cent in a bid to make the corporation more financially sustainable.

Those increases started to apply from January 1.

Power and Water managing director Bertram Birk says it will take time to improve the corporation’s finances.

“We had a major asset failure in Casuarina a few years ago,” he said.

“We embarked on a massive expenditure program to replace those old assets, and install a lot of new equipment.

“We’ve still got a couple of years of that work to go, and the tariff increases are necessary to fund that equipment and infrastructure upgrade.”

Mr Birk says most people will see a transition to increased power prices when they next receive their bills.

“Most people will receive an account every three months, so if there’s two months of the account on the old tariff and one month on the new tariff, that’s just a bit of math applied to the bill,” he said.

Topics: government-and-politics, budget, electricity-energy-and-utilities, darwin-0800, nt

First posted January 02, 2013 14:25:17

Power problem stops trains running

Updated December 31, 2012 19:11:55

Transperth says a fault on the Mandurah rail line is not expected to be fixed until later this evening.

Services have been disrupted since early this afternoon because of a technical problem with an overhead power line near the Murdoch Station.

The cause of the problem is not yet known.

Trains have been cancelled between the Esplanade and Rockingham stations, and replacement bus services are operating.

No other lines are affected.

A Transperth spokesman says normal services are expected to be restored 9:00pm (AWST) and will run into the early hours of the morning as part of the New Years Eve timetable.

Topics: rail-transport, perth-6000

First posted December 31, 2012 19:10:10

Costello report tipped to recommend selling power assets

The Electrical Trades Union (ETU) says it is convinced the State Government will sell Queensland electricity assets.

The Australian Financial Review newspaper says the sale of electricity generation and transmission assets is expected to be a key recommendation of the Costello Commission of Audit report.

The government has pledged not to sell assets without a mandate from the people.

Peter Simpson from the ETU says he has heard the government has already made up its mind.

“I’ve had leaks, believe it or not,” Mr Simpson said.

“Clive Palmer’s not the only one that gets phone calls from LNP backbenchers – I do as well.

“They’ve been telling us for sometime that especially in the generation sector that they’ve been manipulating the market to set this up for sale, making it more attractive so that buyers will want to buy it.”

Treasurer Tim Nicholls says the government is yet to receive the final report, which is due next month.

He says no one would be surprised if it recommends better use of state assets, but the government would take that to an election.

“We would seek to take that to the people and say this is the reason for it, and do you support it or don’t you support it,” Mr Nicholls said.

“That’s very much the commitment that this government has made – no sales without a mandate from the people.”

Topics: electricity-energy-and-utilities, privatisation-and-deregulation, public-sector, government-and-politics, qld

More power price rises flagged in Rio gas play

An independent industry analyst says Northern Territorians may face more power cost hikes if gas is diverted to the Rio Tinto alumina refinery on the Gove peninsula.

The Territory and Federal governments are in negotiations with the mining giant about supplying gas and building a pipeline to the refinery.

Rio Tinto wants the Federal Government to underwrite the cost of a $900 million gas pipeline to Nhulunbuy, more than 990 kilometres east of Darwin.

The company wants the Territory Government help arrange a supply of gas from the Blacktip gas field in the Bonaparte Basin of the Timor Sea, about 110 kilometres from the northern Australian coast.

The Blacktip field is wholly owned and operated by the Italian company ENI, which has a 25-year contract to supply the Territory’s Power and Water Corporation.

Power and Water provides power generation, transmission, and electricity retail services throughout the Territory.

The cost of electricity to domestic consumers has already risen by 30 per cent from the start of the year.

Rio Tinto has warned the Gove refinery, operated by its subsidiary Pacific Aluminium, may have to close if a cheaper energy supply can’t be secured.

The refinery now generates its power using diesel fuel.

Gas industry analyst Peter Strachan says a new deal to supply gas to Gove could see power costs rise again.

“I think it is inevitable they will go up,” he said.

“The costs of developing these fields have probably tripled over the last ten years, and getting $4 a gigajoule gas is a thing of the past.”

But Mr Strachan says while the deal may be bad news for consumers, it could prove a boon for gas suppliers.

“It means you’ve got a growing market,” he said.

“You’ve got a very rapidly expanding situation in the Northern Territory, all … wanting gas for industry and for power production.

“When the two meet, the prices will rise to attract more gas into that market.”

Territory Chief Minister Terry Mills, however, says he is determined to prevent power prices from increasing further as a consequence of securing a gas supply for Gove.

He says says the interests of Territory families are his priority in the discussions.

“Make no mistake about that, that is central in my thinking,” he said.

“We cannot disadvantage the Northern Territory in these negotiations.

“I don’t want any result to occur that increases the cost of electricity for Territorians.

“I am there to protect the interests of Territorians.”

Mr Mills has already said he feels he is being held to ransom in the talks with Rio Tinto, because the town of Nhulunbuy is almost totally dependent on the operations of the refinery.

Topics: government-and-politics, mining-industry, oil-and-gas, darwin-0800, nhulunbuy-0880

First posted January 17, 2013 12:56:23

Farmers flex flour power to break bread record

Updated January 11, 2013 18:25:24

A world record has apparently been broken in central western New South Wales, where a group of farmers converted wheat into bread in under 17 minutes.

Hundreds watched on as the world record was broken in a paddock in Parkes.

The group of farmers harvested the wheat, turned it into flour, made dough and then cooked a baker’s dozen – all in just 16 minutes and 30 seconds.

The previous world record, set by a group in the United Kingdom, was 18 minutes and 11 seconds.

The group beat the record during a trial run but improved on their time in the official attempt.

Organiser Neil Unger says he cannot believe they did it.

“It’s a huge relief,” he said.

“Last night we didn’t think we had a hope in hell.

“We were here till nearly, I’d say what nine, 10 o’clock, went home in disgust and said, ‘you know something is going to have to change’.

“This morning, I just can’t believe how much quicker everything went.”

Nationals Leader Warren Truss, who acted as an adjudicator, says it is an example of the strength of Australian farmers.

“It was easy, they smashed the record,” he said.

“They were way ahead of what anyone else in the world has been able to do, and what’s more, I think they’ve got it within their capabilities to break it again next year.

“It’s certainly an example of wonderful productivity in the farm.”

The result has to be verified before it is officially accepted by the Guinness Book of Records.

Topics: wheat, food-and-beverage, human-interest, parkes-2870

First posted January 11, 2013 07:36:05

Could your household rubbish power your home?

Updated December 21, 2012 20:33:25

What if instead of putting your rubbish out on the kerb it could instead be used to power your home?

That’s what one company is hoping to achieve within the next five years.

And if they’re successful Western Australia will be home to the nation’s first ‘waste-to-energy’ plant with plans to develop a site in Kwinana.

“What goes out in the little green bins will go to the plant,” says Phoenix Energy managing director Peter Dyson.

“Each time you put your own garbage bin out what you’re putting out goes to landfill [and that equates to] 15 per cent of your own electricity needs and that’s renewable.”

Mr Dyson says once the plant is operational it will be able to collect around 300,000 tonnes of rubbish from a similar number of homes each year.

“Any waste that comes into the plant… zero waste goes out of the plant,” he said.

“There is nothing that goes to landfill at all.”

But Piers Verstegen from the Conservation Council is yet to be convinced.

He wants to see more evidence to support the move.

“It is premature to even consider waste-to-energy facilities in WA when there are so many opportunities to capture much higher value through conventional recycling,” Mr Verstegen.

There are around 900 plants across the world that convert rubbish to energy, but so far none have been built in Australia.

Among those, 300 of them are in Japan and 180 in France.

“They are all over Japan, in fact there are 20 of them in Tokyo itself.”

That’s local MP Phil Edman who went on a fact finding mission to Japan with the Premier Colin Barnett in March last year.

Mr Edman says the project will go a long way to meeting the State Government’s policy of ‘no landfills’ by 2020.

“It has been cheaper to put it into land and now that is obviously changing which is a wise move in relation to the environment,” he said.

“So apart from making energy for some 100,000 homes, there are no dangerous substances going back into the ground.”

He also believes that households will be better off in the hip pocket.

“The gate fee is around $205 a tonne to the rate player but this plant the cost will be around $110.”

The Kwinana plant is expected to be operational by 2016 and comes with a $350 million price tag.

But Piers Verstegen disputes some of the environmental benefits and says more information needs to be released.

“Recycling materials such as plastic, metals and glass captures much greater value by allowing these materials to be used again and again, unlike waste-to-energy which destroys the valuable materials in waste,” he said.

Developers say the plant will create enough energy for 100,000 households and will be built under the toughest and most strict environmental conditions.

“I think Western Australia moves faster than the other states,” says Peter Dyson.

“In WA there is a much stronger attitude of let’s find out what we need to do and let’s get on it.

“It meets all the targets and it will be designed to meet the strictest emissions profile.”

Phil Edman says that in Japan the plants are built next to residential areas and schools.

“There were no odours or emissions coming out of it,” he said.

“The dioxin levels are so low coming out of it that if you were to [compare] it to an exhaust pipe, there were more dioxins coming out of an exhaust pipe delivering to the plant than actually what is coming out of the stack,” he says.

But Piers Verstegen remains sceptical.

“There are also serious concerns about pollution from incineration of mixed waste, particularly in and around metropolitan areas,” he said.

Mr Dyson hopes there will be more plants given the green light in Western Australia and then other states and territories will follow.

He believes the construction will create around 800 jobs and when it is complete around 60 people will be required to staff the plant.

He says Australia could sustain about 20 waste-to-energy plants with its size and population.

“We are not playing with research and development; this is tried and proven stuff,” says Mr Dyson.

“It is going to happen.”

Topics: environmentally-sustainable-business, environmental-policy, environmental-impact, energy, kwinana-town-centre-6167

First posted December 21, 2012 20:25:19

Govt unplugs Power and Water to keep costs down

Updated January 10, 2013 14:13:12

A Queensland electricity company has again beaten the Northern Territory Government-owned Power and Water Corporation in a major tender to supply power to a government building.

The latest Northern Territory Government gazette shows Brisbane firm Q-Energy has been awarded a $795,000 contract to supply power to the Chan Building in Darwin for three years.

The building is owned by the Territory Government.

A spokeswoman for the Chief Minister says it was a commercially awarded contract that has gone through the proper tender process.

Last year, Q-Energy beat Power and Water in a $2.3 million bid to supply electricity to Parliament House.

The Government recently announced Power and Water was increasing its electricity prices by 30 per cent because of its large debts.

Topics: government-and-politics, electricity-energy-and-utilities, darwin-0800, qld

First posted January 10, 2013 14:01:32

Taqa acquires stake in Himachal Sorang power for undisclosed sum

Abu Dhabi: National Energy Company (Taqa) said yesterday it has acquired an interest in Himachal Sorang Power Limited (HSPL), the developer of a 100 megawatt (MW) hydroelectric plant in the northern Indian state of Himachal Pradesh.

“We currently have a minority stake in the company. Price details cannot be divulged at this stage because of confidentiality reasons,” a spokesperson for Taqa told Gulf News by telephone. He added: “We will acquire about 49 per cent of the company, soon and thereafter, will take our holding in the company to up to 100 per cent with our joint venture partner.” Construction of the Sorang hydroelectric project is 90 per cent complete and the plant is expected to begin operations in 2013, Taqa said in a statement. The acquisition was made in a joint venture with Jyoti Structures Ltd (JSL), an Indian power infrastructure company, which signed a Memorandum of Understanding with Taqa in July 2011 to explore investment opportunities in the sector.

Taqa already operates a 250 MW lignite power station in the Neyveli region of southern India. Commenting on the deal, Carl Sheldon, Taqa’s chief executive officer said: “This investment will both complement our existing power generation business in India and support Taqa’s nascent renewable energy stream. It also reflects our confidence in the Indian market.”

Article continues below

Taqa and JSL have initially bought a minority stake in HSPL, which is a consortium comprising NCC Infrastructure Holdings Ltd and IL&FS Energy Development Company Ltd. “Subject to the satisfaction of certain conditions precedent and compliance with applicable regulatory requirements, Taqa and JSL will progressively acquire 100 per cent of the share capital of HSPL and jointly operate the plant. Taqa will hold a majority stake in the joint venture,” the Abu Dhabi-based company added.

Major power outage hits far north Queensland community

Ergon Energy says it is not sure how long it will take to repair a major fault at a sub-station in Cooktown that left thousands of people without power at the weekend.

It happened on Saturday night with residents in the Indigenous community of Hope Vale still without electricity today.

Telephone service to Hope Vale has also been cut by the power outage.

A temporary supply was restored to Cooktown residents yesterday when 40 Ergon staff from Mareeba, Cairns and Townsville went to the area with 12 generators.

The Member for Cook David Kempton says he will meet with Ergon Energy staff during a visit to Hope Vale with the Premier Campbell Newman tomorrow.

“Had there been rain associated with this all these back-up units wouldn’t have got past Rifle Creek and McLeod Creek and couldn’t have got into Cooktown,” Mr Kempton said.

“I think it’s a timely reminder that we need to review the entire situation in remote areas, especially cross communications between the various agencies.”

Residents across the region could lose power again today.

The Cook Shire Mayor, Peter Scott says Ergon will be trying a series of options to repair the fault.

“One is a diversion of the live-line feed from Black Mountain sub-station,” Councillor Scott said.

“The second is a direct connection to the main voltage line of a unit called Pegasus, which is a great big generator that can feed straight in.

“The third is that they’re working at the Cooktown sub-station itself.”

Councillor Scott has praised Ergon crews for their quick response.

“Most of our businesses and a lot of the people particularly the rural residents up here have got their standby generators and their cyclone kits all organised so it’s not like people were totally unprepared for the emergency,” he said.

“But even so it wasn’t very comfortable for a lot of people for quite some time.”

Topics: electricity-energy-and-utilities, community-and-society, local-government, cooktown-4895, hope-vale-4871

First posted January 14, 2013 10:14:38

Plan to lower power prices with new plant

nergy company Northern Power says its plan to provide power to electricity retailers in the Northern Territory will lead to lower energy costs.

Northern Power wants to build a new power plant near Palmerston, to generate about one fifth of the electricity that the Power and Water Corporation puts into the Darwin and Katherine network.

The company’s Matthew Rennie says if approved by the Territory Government, construction will start in September and be operational by mid 2015.

He says it will create a competitive power market in the Territory.

“All companies in the world operate in competitive markets, even the biggest customers in the world benefit from competition,” Mr Rennie said.

“It keeps them on their toes, makes sure they don’t lose that customer focus.

“We see obviously a good future for Power and Water.

“We look forward to being in the market and working with them as just another player.”

Topics: electricity-energy-and-utilities, darwin-0800

COAG signs on to PM’s power price plan

Updated December 07, 2012 19:52:31

Federal and state leaders have agreed on a plan aimed at curbing power price rises, which Prime Minister Julia Gillard says will save households about $250 a year once it is fully implemented.

The agreement, reached during today’s Council of Australian Governments (COAG) meeting, does not involve the mandatory rollout of so-called smart meters.

But Ms Gillard says all states have agreed to work on options for more flexible pricing.

“We will be working with consumers to give them more options and choices about how they consumer their power,” she told reporters in Canberra.

“We will be introducing rewards into the system so that big users, big businesses can moderate power loads that they put on the system during peak times.

“We will be addressing the gold-plating of the system and overinvestment in the poles and wires.”

As part of efforts aimed at reducing the “perverse incentive” to overinvest in transmission lines, the Commonwealth has committed an extra $23 million to boost the resources of the Australian Energy Regulator (AER).

But some state leaders have already criticised the plan, with Victorian Premier Ted Baillieu expressing disappointment the changes to the AER do not go further.

“The Commonwealth declined to commit to an independent Australian Energy Regulator which means Victorians and Australians face the prospect of sub-optimal regulatory decisions,” he said.

“This will increase pressure on energy prices for Victorian families and businesses.”

West Australian Premier Colin Barnett is not convinced the plan will deliver the promised savings.

“Well there is agreement to reform it (the energy market),” he told ABC News 24.

“Whether that will provide price relief, I doubt. Maybe it will mean price increases in the future won’t be as great.”

Ms Gillard says the $250 savings estimate is based on a report by the Productivity Commission, although she concedes today’s agreement differs from that document.

The Commission’s estimate was based on a scenario where households would be required to have a smart meter.

As expected, the COAG meeting also finalised agreements for National Disability Insurance Scheme (NDIS) launch sites.

Five states have agreed to host the sites – New South Wales, Victoria, South Australia, Tasmania and the ACT – which are due to begin mid-next year.

Yesterday, Ms Gillard announced an agreement with the NSW Government for the full rollout of the scheme from 2018, saying it would act as the benchmark for other states.

Asked when Victoria might sign up to the full rollout, Mr Baillieu said: “We’ll continue to work with the Commonwealth and other jurisdictions on a sustainable outcome for the long term.”

Queensland Premier Campbell Newman said he believed it would be at least two more years before his state could afford to pay its share of the NDIS. 

The leaders also discussed the terms of reference for the royal commission into child sexual abuse, with the Commonwealth agreeing to pay the total cost of the inquiry.

Ms Gillard says even though the commission will be established under federal law, the states have agreed to formally cooperate with the investigation.

“There is a predisposition by first ministers here to issues Letter Patent,” Ms Gillard said.

“What that means is that the powers of the Federal Government can be bolstered by the powers of state governments.

“So that would give the royal commission that the Federal Government is creating the maximum legal power and backdrop to get about its work.”

All leaders reiterated their support for changing the rules for royal succession to remove discrimination on the basis of gender or religion, but there has not been uniform agreement on how to do it.

Queensland is holding out on handing over its powers to the Commonwealth to make the change, believing there is another way of achieving the goal.

“Our view is that we will pass legislation in accordance with our position as a separate, sovereign state,” Mr Newman said.

“We’re a federation of states – we’re going to do it the right way, the proper way.”

At that point, the Prime Minister responded to Mr Newman’s comments, saying the Federal Government had received clear legal advice on the issue.

“There is one crown in Australia… and that the way in which we should deal with this, the most legally effective way to deal with it, is that states would pass legislation referring to the Commonwealth the ability to make these changes to succession,” she said.

“For that to be a legally effective process, all states have to do it. If one state doesn’t do it, then it doesn’t work.”

The Federal Government’s proposed overhaul of school funding was also discussed, but the leaders deferred detailed discussions on the matter until next year.

Under the plan recommended by the Gonski report, each school would be given a base level of funding per student, with extra loadings to compensate for disadvantage.

It is fanciful to expect that this reform will be agreed in April 2013 if the Commonwealth continues to refuse to discuss the proposed funding.

Victorian Premier Ted Baillieu

Mr Baillieu said he was disappointed there had not been any “meaningful” discussion about the plan at today’s gathering.

“It is fanciful to expect that this reform will be agreed in April 2013 if the Commonwealth continues to refuse to discuss the proposed funding,” he said in a statement.

Ms Gillard has previously said she wanted to reach a final agreement with the states by the first COAG meeting next year.

Topics: federal—state-issues, federal-government, government-and-politics, electricity-energy-and-utilities, australia, wa, nsw, tas, qld, act, sa, vic

First posted December 07, 2012 16:51:10

Could a troublesome weed power Cuba?

8 December 2012 Last updated at 00:03 GMT By Sarah Rainsford BBC News, Ciro Redondo, Cuba Havana Energy Chief Executive Andrew Macdonald shows Sarah Rainsford around the sugar mill and plantation

Drive anywhere in the Cuban countryside and you will spot the marabu lining the road: a dense, woody weed that grows as tall as trees and has invaded vast swathes of agricultural land.

The land-grab began in the 1990s when Cuba was in economic crisis following the collapse of its great benefactor, the Soviet Union. The mighty sugar industry slumped too, and cane fields were overrun by marabu.

But to one British firm, the aggressive weed is less a problem than a valuable resource.

Havana Energy has just signed a $50m (£31m) investment deal to build a renewable-energy power plant in central Cuba, supplying one of the country’s biggest sugar mills as well as the national grid.

During the harvest it will be fuelled by sugar-cane residue, known as bagasse. The rest of the year it will be fed with marabu.

“Marabu has a very high calorific level and low moisture, so as biomass it’s very attractive,” explains the firm’s CEO, Andrew Macdonald.

Benefits for all Havana Energy Chief Executive Andrew Macdonald shows Sarah Rainsford around the sugar mill and plantation

Harvesting marabu will also address a pressing issue on the island.

“Seventy per cent of the food Cubans consume is imported, which is a national tragedy with their climate and soil,” says technical director Keith Dawson.

“Every Cuban hates marabu so we’re doing a service: not just removing it but also returning the land to farming.”

The deal is a joint-venture with Cuba’s state sugar monopoly and is part of a move by the Communist government to diversify its energy supply away from dependence on subsidised, imported oil from its socialist ally, Venezuela.

“Cuba relies on diesel-powered power stations, which are even less green than coal, very expensive and give-off horrible emissions,” Mr Macdonald explains, saying his firm’s green energy will also be cheaper.

Now the papers have finally been signed, the British team face their first major test.

Early next year they will import a combination of forestry and construction equipment that they hope can harvest the marabu economically. No-one has managed that yet.

“You can’t underestimate marabu. We’ve brought foresters to look at it and they’ve been confused, and agricultural kit is not strong enough,” says agricultural adviser Julian Bell.

‘Terrible state’

Havana Energy CEO Andrew McDonald with marabu The aggressive marabu plant has a dense structure and hard thorns, says Andrew McDonald

The plant’s woody roots vary in size and are as dense as teak with fierce thorns.

“Usually you just wouldn’t bother. But I don’t know anywhere else with 1.5 million hectares covered in such a good energy source,” he says.

There is another incentive. Research at Strathclyde University has revealed that marabu produces high-grade activated carbon for use in filters – like in Cuban rum production.

Potentially, the carbon could also be used in new-generation fast-charging batteries.

So Havana Energy will bring a reactor to the Ciro Redondo mill next year to trial carbon manufacturing.

In the small town that grew up around the sugar mill, there is a good deal of expectation about the investment. The joint venture should create around 60 new jobs and includes funds to upgrade the dilapidated mill itself, now a century old.

Only one of its three crushing machines are operational, it still has Soviet-era signs and ageing east German equipment, and large sections of the roof are missing.

“It’s in a terrible state,” says retired sugar-worker Oberto Vazquez as he passes on his bicycle. “When it rains, it rains more inside than out.”

So for Cuba this venture is not only about sourcing alternative energy.

The government is in the midst of a drive to boost sugar production, cashing in on higher global prices and increased demand from countries like China. It has reopened almost a dozen old mills, targeting 20% production growth per year.

Tackling weeds

It has allowed foreign funds into the sector for the first time since the 1959 revolution. As well as the British venture, a Brazilian firm has been contracted to manage another large mill in a nearby province.

The mill at Ciro Redondo The sugar mill at Ciro Redondo has seen better days, with only one of its three crushing machines still operational

“The main [British] investment is to build the power plant, but we have negotiated access to credit to improve the cane fields and the sugar mill itself,” says Rafael Rivacoba, director of international relations at Azcuba, Cuba’s sugar firm.

“I think that’s positive.”

He describes further foreign investment in the sector as a possibility, but is cautious. The deal with Havana Energy took three years to negotiate.

“We’re thinking about other things,” he says, admitting that international sugar brokers are knocking at his door. “But nothing’s been decided.”

On the ground in Ciro Redondo though, funding from anywhere is welcome.

The mill can only afford to irrigate 12% of its crops today; average yields in the cane fields are under half the international norm.

“We have the will and the knowledge,” says manager Victor Dieguez. “But we need investment.”

That is now on its way and if this pilot project succeeds, the British team has an option to build four more power plants at other sugar mills.

First though, it has to tackle the marabu: to prove that it does have the solution, to turn a weed into a valuable asset.

Gas power plants given go-ahead

5 December 2012 Last updated at 15:56 GMT Gas-fired Power Plant Gönyü The government wants gas to remain a full part of the UK’s power strategy past 2030 Chancellor George Osborne has approved the building of over 30 new gas-fired power stations to replace the UK’s ageing coal, nuclear and gas stations.

The new capacity could produce up to 26 gigawatts (GW) of electricity by 2030, a net increase of 5GW.

The plans will dismay environmentalists who want more emphasis placed on lower-carbon, renewable energy sources.

Mr Osborne also announced a consultation on potential tax incentives for shale gas exploration.


In a statement announcing the government’s new gas generation strategy, Energy Minister Ed Davey said: “Gas will provide a cleaner source of energy than coal, and will ensure we can keep the lights on as increasing amounts of wind and nuclear come online through the 2020s.”

Mr Davey said the policy was “consistent with significantly reducing emissions from the power sector in order to meet Carbon Budgets”.

Gas accounted for about 40% of UK electricity production in 2011; the new capacity could see that figure rise to 50%.

Welcoming the announcement, Angela Knight, chief executive of lobby group EnergyUK, said: “Government has now made it clear that it sees gas as having an important role today and in the future.

“This greater certainty on energy policy should also be a real confidence booster for establishing supply chains for all types of electricity generation.”

But some experts believe a new “dash for gas” is misguided.

Continue reading the main story image of Roger Harrabin Roger Harrabin Environment analyst

The gas strategy was imposed on the energy department (DECC) by the chancellor because he thinks gas will be cheap and he doesn’t like the UK’s unilateral targets on cutting CO2 emissions.

That’s why the strategy contains two scenarios: one for approximately 20 gas-fired power stations and the other for nearly double that.

The lesser option would more or less keep the UK on target for meeting its laws on cutting carbon emissions. The bigger option involves tearing up the targets when they are reviewed at the Conservatives’ insistence in 2014.

There’s tension within the coalition on this – not just because of its impact on UK emissions, but because the energy department is not convinced that gas will be cheap.

The chancellor is betting that the UK will produce plentiful shale gas. But the CBI and the International Energy Agency and others warn that fracking won’t produce the hoped-for bonanza.

Indeed some analysts warn that increasing reliance on gas will put prices up.

Follow Roger on Twitter @rogerharrabin

For example, recent research from think tank Cambridge Economics argued that the UK economy would be £20bn a year better off by 2030 if investment were directed towards large-scale offshore wind projects rather than new gas power stations.

And David Kennedy, chief executive of the Committee on Climate Change, said: “Early decarbonisation of the power sector should be plan A – and the dash for gas Plan Z.”

He argues for “investment in a portfolio of low-carbon technologies, rather than a dash for gas which would raise long term costs and risks.”

The government says it hopes to attract investment in new gas infrastructure by:

introducing a Capacity Market, allowing for capacity auctions from 2014 to ensure energy supply at times of peak demand simplifying the planning regimestepping in if necessary to improve liquidity and market competition encouraging new gas storage capacity establishing an Office for Unconventional Gas and Oil potentially introducing new tax incentives for shale gas exploration supporting the development and commercialisation of carbon capture and storage technologyShale decision due

But there was still no announcement on whether drilling for shale gas would be allowed to continue, despite the announcements on potential tax incentives for the fledgling industry.

Shale gas is controversial because the extraction process – known as ‘fracking’ – involves pumping high-pressure water and chemically-treated sand into the shale rock, which can lead to polluted water supplies and earth tremors.

Test drilling by US firm Cuadrilla near Blackpool was stopped after two minor tremors. Mr Davey said a decision would be made “shortly”.

In the US, shale gas discoveries have brought the country close to energy independence, but the side effects have caused complaints from affected locals.

However, the industry has said this is more to do with bad practice rather than the principle of fracking itself.

AGL launches legal fight on power prices

Updated December 05, 2012 14:16:53

Energy company AGL is challenging a proposed cut to electricity prices in South Australia.

In a statement, AGL said it had launched legal proceedings in the Supreme Court.

The state’s energy regulator, the Essential Services Commission, is planning a reduction of 8.1 per cent in electricity prices for consumers with standing, rather than market, contracts.

That is expected to save residential customers an average of $160 annually, but most South Australians are on market contracts, which are not price-regulated.

AGL said the Commission had wrongly exercised its power to review prices citing “special circumstances”.

The Commission was set to make a final determination before Christmas, but CEO Paul Kerin said the legal action could delay that.

“AGL has a legal right to ask for a judicial review of our special circumstances decision. Ideally we would hope it would be before Christmas, but it is possible it would extend beyond that,” he said.

Acting Energy Minister John Rau said the SA Government would watch the legal developments closely.

“They’re entitled to go to court just like anyone else is,” he said.

“If what they’re trying to do is clip the wings of the regulator I’d have to have a very serious look at it.”

SA Premier Jay Weatherill said the Essential Services Commission was right to test AGL’s standard contract price.

“Energy retailers are free to pursue their legal rights and that’s what AGL has done in this situation but we want energy retailers to do the right thing by consumers. We want a strong regulator that holds their feet to the fire in relation to energy prices, that’s what the regulator has sought to do,” he said.

The executive director of welfare organisation, the South Australian Council of Social Service, Ross Womersley, said the decisions of regulators across Australia often faced challenges from power providers.

“They continue to win, now some of that is because they have a vast body of resources at their disposal, both technical and legal, and they will use those to protect their interests, which of course is making the maximum profit they possibly can for their shareholders,” he said.

Topics: electricity-energy-and-utilities, industry, business-economics-and-finance, law-crime-and-justice, sa, adelaide-5000, australia

First posted December 05, 2012 08:20:55

Private schools to get power and water subsidies

Posted December 04, 2012 17:11:41

The Northern Territory Government says it will provide the same assistance to all schools to help meet the cost of rising utilities prices.

Last week, it announced it would cover half of the power and water tariff increases for government schools only.

Now, Treasurer Robyn Lambley says independent schools will also receive assistance in the form of a grant that is based on the average “per student” cost of the increases.

“It wasn’t about excluding the non-government schools,” she said.

“It was really just following suit from what the previous government did several years before.

“We’ve listened to the people and we’ve come back, and decided we do have the money to subsidise non-government schools as well as government schools.”

Topics: government-and-politics, schools, electricity-energy-and-utilities, nt

Federal-state relations threaten power price action

Updated December 04, 2012 14:34:49

The head of COAG’s Reform Council says energy market reforms are at risk of being undermined by a growing level of suspicion between the Commonwealth and the states.

Prime Minister Julia Gillard is ramping up pressure on state premiers ahead of their meeting on Friday, urging them to agree to a range of changes aimed at bringing down power prices.

But state and territory leaders are calling for more details before signing up to any new arrangements at this week’s Council of Australian Governments (COAG) meeting.

We asked our readers if they thought an agreement would be reached. Read their comments.

COAG Reform Council chairman Paul McClintock says there has been a disappointing level of commitment to energy market reforms, which he believes is linked to broader problems facing the future of federation.

“It’ll be interesting to look at how the energy issue is faced this coming week,” he said.

“I think [it will] depend a lot upon whether there is trust between the various members of COAG to actually say ‘this is something we can do together’, or people are going to play politics with this and consequently ‘I’m just not prepared to expose myself and commit myself to the uncertainties of a cooperative approach’.”

The Commonwealth wants to put an end to the “perverse incentive” to overinvest in poles and wires, and give consumers more access to information about their electricity usage through the installation of so-called smart meters.

In 2007, federal and state leaders endorsed the national rollout of smart meters after initial trials were carried out.

However, according to the latest COAG Reform Council report released today, key milestones for the installation of smart meters have not been met.

“The agreement to roll out smart meters was always subject to agreed cost-benefit analysis, and that remains the case,” Mr McClintock said.

“Personally, I felt that the case for smart meters could have been made out better than it has been.

“Smart meters have not been effectively sold as a way of actually reducing energy consumption.

“Some of the restrictions that were put around smart meters, which restricted the individual’s ability to actually know what was going on and adjust their behaviour, meant that the program has never been seen in the community’s mind as strongly linked to energy saving.”

There has been a long period where there has been a growing level of suspicion between the governments as to whether there is a real commitment to working together.

The latest report card from the COAG Reform Council marks the end of Mr McClintock’s six-year tenure as chairman.

He has used the occasion to deliver a strong warning about the future of Commonwealth-state relations, arguing the way COAG operates needs to be reinvigorated or its reform agenda will fail.

“There has been a long period where there has been a growing level of suspicion between the governments as to whether there is a real commitment to working together,” Mr McClintock said.

“We are at a bit of a crossroads. Australians are losing faith – quickly, actually – in the ability of governments to work together.

“Really, we should stand back and say, this isn’t good enough, and this is a major issue for our nation as a whole.

“This is not a debate about cooperative versus competitive federalism… it’s really about effective federalism.”

Mr McClintock says there is a growing number of issues where there is an overlap in responsibilities between the Commonwealth and the states, and this has led to a greater level of competition between the two levels of government.

Topics: federal—state-issues, government-and-politics, federal-government, states-and-territories, electricity-energy-and-utilities, australia

First posted December 04, 2012 06:36:58

States want more details on power price plan

Updated December 03, 2012 14:35:09

State and territory leaders are calling for more details before signing up to the Federal Government’s plan to cut electricity bills.

Prime Minister Julia Gillard says her reform package will save consumers $250 per year on their power bills.

She is hoping to reach an agreement on the plan at a COAG meeting of state and territory leaders on Friday.

Ms Gillard wants to give more funding to the national energy regulator, and set up new consumer groups to keep power prices down.

Victorian Energy Minister Michael O’Brien says some of the proposals look worthwhile, but the industry watchdog needs more power.

“The Australian Energy Regulator is in a constant battle for resources, both financial and personnel,” he said.

New South Wales Minister Katrina Hodkinson says the states are already looking at ways of pushing power prices down.

“I think the best things they could do is abolish the green schemes and abolish the carbon tax,” she said.

Ms Gillard is pushing for the roll out of smart meters, but Queensland Energy Minister Mark McArdle is making no commitments.

“I call upon the Prime Minister to release all costings in relation to her claim as to how these prices are going to be driven down and more importantly, when prices will fall,” he said.

We asked our readers if they thought the energy regulator should be given more power to influence power prices. Read what they had to say.

The Federal Coalition dismissed yesterday’s announcement as a stunt, but says the energy sector does need to be deregulated.

John Pierce, the chairman of the Australian Energy Market Commission, wants to see the states and Commonwealth agree to changes to the way electricity is priced to allow consumers to get a better deal.

“This Friday’s meeting is an opportunity to make some substantial reforms and an opportunity that only comes around almost once a decade,” he said.

“Really [it's] about putting the consumers in a position so that they can be better informed about what sort of options are available to them and what sort of decisions they can make in their position, so that in a way that’s easy for them to make decisions about how to use electricity.”

The Prime Minister also has the backing of a prominent think-tank, the Grattan Institute, which has released a report on how to reduce energy prices.

The institute’s energy program director, Tony Wood, says the regulator needs to be better equipped to determine the profits of energy network monopolies.

“The regulator does need to be given more direct power and more incentive to tighten up the way in which these businesses have been allowed to charge prices to customers which have probably moved too far in favour of the investor and too far away from the interest of customers,” he said.

Mr Wood’s report shows fixing the regulatory system could save $2.2 billion a year, which would save the average household about $100.

He praises the Australian Energy Market Commission’s recent move to give the regulator more power, but says more must be done.

“The governments together – and this has to be done by both the federal and the state government – they need to hold the regulator accountable for delivering a much better result in the interests, and the long-term interests, of consumers,” he said.

The chief executive of the Energy Networks Association, Malcolm Roberts, agrees power bills have risen steeply, but says the increases are justified.

“We look at the different factors that have been pushing up network costs, that’s the higher cost of capital thanks to global financial crisis, the need to replace ageing assets, particularly in New South Wales and Queensland, so we’re going through a bit of an investment peak,” he said.

“There’s the continuing need to build extra capacity to meet peak demand. It’s too simplistic to suggest that high network costs reflect just some argument about regulatory failure.”

Topics: electricity-energy-and-utilities, industry, business-economics-and-finance, federal—state-issues, federal-government, states-and-territories, government-and-politics, australia, nsw, vic

First posted December 03, 2012 06:30:28

Federal Government announces power price plan

Updated December 02, 2012 14:34:17

Prime Minister Julia Gillard has announced a plan she says will reduce household power price increases from 2014.

The announcement is aimed at pressuring states and territories to take action on power price rises.

Ms Gillard says her plan will stop the so-called “gold plating” of electricity networks, allow for a stronger industry regulator and the creation of two new consumer bodies.

“I want to fight for a better deal for Australian families on power prices,” she said.

Ms Gillard says consumers would save up to $250 per year on their power bills under the plan.

“At the moment there are some real problems with the way our electricity pricing works,” she said.

“Overinvestment in the poles and wires – that costs families a lot.

“I want to make sure we’re making a difference for families.

“We have been working hard through energy ministers on the plan. Now is the time to get it done.”

The plan would introduce cost reflective pricing, meaning electricity will be cheaper at non-peak times.

Opposition Environment spokesman Greg Hunt says the plan will penalise households using power in the early evening.

“I think we have to be very cautious about driving up power prices for families,” he said.

“If the Prime Minister’s solution is ‘we’ll give you a carbon tax to increase your power prices and then we’ll increase power prices at dinner time’, then I think we ought to know that today.”

The plan will be put to the state and territory leaders at the Council of Australian Governments (COAG) meeting in Canberra on Friday.

Queensland Energy Minister Mark McArdle says he is yet to see any details from the Federal Government.

“We haven’t even seen the plan, we’ve seen no details whatsoever,” he said.

“We have not got data and documentation from the Prime Minister, we have got skeletal ideas and concepts.

“I want to have her release all data, all documents, and all costings to indicate how it’s going to happen. The devil is in the detail in this matter.”

Topics: electricity-energy-and-utilities, federal—state-issues, federal-government, australia

First posted December 02, 2012 13:11:57

Premier backs power price plan

Updated December 03, 2012 10:25:58

The Tasmanian Premier says the state’s publicly-run electricity network has protected consumers from the price hikes seen interstate.

The Prime Minister wants to set up two new consumer bodies and cut power bills by reducing over-investment in electricity networks.

Julia Gillard says the changes would also allow for a stronger industry regulator.

The Tasmanian Premier says the federal plans will have less of an effect in Tasmania than interstate.

Lara Giddings says price hikes in Tasmania has been modest because the state-run power network is better managed than private networks elsewhere.

She says public ownership has prevented the so-called “gold-plating” of power networks

“This year and next year we’re expecting a price increase in electricity of no more than inflation,” she said.

“Now that’s extraordinary when you consider other states in this year have had to face price increases of 15, 20 per cent.

“Here in Tasmania our government-owned businesses have been very responsible in the investment in the infrastructure we need to insure that we don’t have blackouts or brownouts around the state.

“So at a national level, we absolutely support what the Prime Minister is doing.”

Topics: electricity-energy-and-utilities, hydro-energy

First posted December 03, 2012 09:03:19

Tipped price rises may sandbag PM’s power play

Updated December 03, 2012 20:53:24

It seems Julia Gillard’s plans to save consumers $250 a year on power bills may already have been sandbagged in New South Wales.

There are more price rises in the offing for many consumers in the state which Federal Labor has identified as crucial to its hopes for re-election next year.

One of NSW’s biggest electricity suppliers, Energy Australia, has outlined plans to put prices up by 10.5 per cent over the next three years.

At the weekend, Ms Gillard announced a reform package in which she wants to give more funding to the national energy regulator and set up new consumer groups to keep power prices down.

The Commonwealth wants to put an end to the “perverse incentive” to overinvest in poles and wires, and give consumers more access to information about their electricity usage through the installation of so-called smart meters.

Ms Gillard is hoping to reach an agreement on the plan at a Council of Australian Governments (COAG) meeting of state and territory leaders on Friday.

But state and territory leaders are calling for more details before signing up.

In NSW, the chairman of the state’s Independent Pricing and Regulatory Tribunal (IPART), Peter Boxall, says competition is the best guarantee of lowest possible prices for electricity.

“In our view, effective competition, where retailers strive to offer customers products and services they value, is the best way to ensure that prices are driven towards the efficient cost of supply,” he said.

“However, we expect that the main driver of recent electricity price increases – rising network costs – will ameliorate over the next three years.”

Despite that perspective, the retailers’ outlook is for higher prices across New South Wales.

Energy Australia, which supplies electricity and gas to 1.1 million businesses, is proposing to raise prices by up to 4.5 per cent from next July.

It also predicts a further rise of 3 per cent from 2014, and another 3 per cent the year after that.

Origin Energy, which covers western Sydney, the Illawarra, as well as regional and rural NSW, is also predicting price rises.

“We expect that a reasonable regulated electricity price path across the regulatory period would see price increases above CPI, but nowhere near replicating the recent year-on-year double digit price increases,” said spokesman Frank Calabria.

Business and industry are looking for substance rather than stunts and politicking come Friday.

Innes Willox, from the Australian Industry Group (AIG), says he hoped there can be real outcomes determined in the national interest.

“There are a series of measures that are being put forward that are really important for industry,” he said.

“You’ve got a proposal that would provide incentives to users, including industry, to voluntarily cut their electricity usage during the peak times, times of peak demand and that would be most welcome, because that would drive down costs.

“Our electricity system broadly is focused around those five or six days a year that are either really hot or quite cold where peak demand goes through the roof.

“If we can do important things, sensible things, to reduce demand during those periods of high stress on the network, that should reduce costs for all.

“If we can provide incentives for business to do that, business would be very quick to take that up I’m sure.

“And we’ve got other systems around a more formal role for energy users, including businesses in decision-making processes around electricity network investment.

“That’s really positive because it will get industry involved in the decision-making process.”

Topics: electricity-energy-and-utilities, industry, business-economics-and-finance, consumer-protection, federal-government, federal—state-issues, australia, nsw

First posted December 03, 2012 20:07:40

Qatar aims increase solar power

Doha: Qatar aims to raise the share of solar power in electricity generation to 16 per cent by 2018, an official said on Saturday in a rare example of an Opec nation embracing renewable energy.

Qatar, the world’s top exporter of liquefied natural gas, has the world’s highest per capita greenhouse gas emissions. Like other Opec nations, it has been wary of a global shift to renewable energy, fearing it will hit demand for oil and gas.

“We are working on a project to develop 1,800 megawatts of solar power,” said Fahad Bin Mohammad Al Attiya, chairman of the organisers of talks in Doha from November 26-December 7 among almost 200 nations on slowing global warming.

“That will be 16 per cent of our total electrical output,” he told Reuters, adding the project was due to be operating by 2018. He said the tiny Gulf state now has negligible use of solar power despite strong sunshine year-round.

Article continues below

“It makes sense for us,” he said of the plan for more renewables that will partly aid desalination of sea water. “We will also have a feed-in tariff system so that people can put solar systems on their roof and contribute to the grid.

“All these measures have been applied now because solar prices are becoming reasonable and competitive. With the amount of solar hours we have it is economically feasible,” he said.

Qatar has so far disappointed environmentalists by failing to set clear targets for reducing its greenhouse gas emissions at the UN talks. It has argued that its liquefied natural gas exports help other nations turn from more polluting coal.

The government said in a report to the United Nations last year: “Qatar is pursuing voluntarily a national initiative to reduce greenhouse gas emissions as long as they are in line with sustainable development.”

“To Qatar, climate change represents a double jeopardy,” it said. On the one hand, global warming threatened its fragile desert ecosystems. On the other, effective action to solve the problem would undermine demand for fossil fuels.

Push for gas-fired power stations

Roger Harrabin Environment analyst Gas-fired Power Plant Gönyü The government wants gas to remain a full part of the UK’s power strategy past 2030 The government is to unveil its contentious gas strategy this week.

Chancellor George Osborne has ruled that gas should continue to play a role in day-to-day electricity generation beyond 2030.

He has over-ruled official climate change advisers who want gas to be used almost exclusively to back up nuclear and renewables by then.

Also in the next two weeks, DECC will rule on whether controversial drilling for shale gas will go ahead in the UK.

Environmentalists say shale gas could become a bruising political battleground.

The process involves extracting gas from rocks using small explosions and then pumping in water and chemicals.

Shale gas has bought the USA cheap energy but it has also caused polluted water supplies in places and caused earth tremors. Problems have been blamed by the industry on bad practice rather than bad principles.

Test drilling in the UK near Blackpool was stopped after two minor tremors, and Energy Secretary Ed Davey has been examining what safeguards are needed if it is to play a part in the UK.

Central role

The timing of the two announcements has been determined by politics. The energy department DECC originally planned to fold the issue of gas into its over-arching Energy Bill published last week.

DECC planned to follow advice from the official advisory Climate Change Committee to strictly limit the role of gas for electricity.

But the chancellor has demanded that gas should have its own separate strategy to ensure that it plays a central role.

The strategy will officially be published by DECC but a senior DECC source told me: “This is the chancellor’s personal obsession. We have just let him get on with it. We don’t really object.”

Mr Osborne has talked of wanting the UK to become a gas “hub”, bringing gas into Europe.

The strategy will lay plans to guarantee security of supply of gas into the UK. The chancellor believes gas will probably be relatively cheap in future and does not want to burden the UK economy with high energy prices.

Fracking plans

Although gas is cheap and plentiful in the USA, opinions vary as to whether it will be affordable or expensive on the global market.

So, as North Sea gas dwindles, there is great pressure on the UK to produce its own supplies from shale gas, which increases the significance of Mr Davey’s shale gas announcement.

DECC was embarrassed at the weekend by a Freedom of Information request from Greenpeace showing research for the government suggesting that 64% of England’s rocks might hold hold gas for fracking, the process by which trapped gas is extracted from rocks.

DECC said it was “ridiculous” to suggest that two thirds of England would be fracked, adding that the British Geological Survey was still investigating how much shale gas might realistically be exploited.

But with constituents of some rural areas complaining that they do not like wind farms, the prospect of gas drilling in nearby fields may prove equally politically sensitive.

Greenpeace claim that the chancellor has been over-influenced on the issue by his father-in-law Lord Howell, who was a government energy minister before climate change was a concern.

In a sting operation Greenpeace secretly filmed Lord Howell warning that the UK was dependent on gas from Qatar so that, “if jihadis took over Qatar we would be up shit creek.”

Follow Roger on Twitter @rogerharrabin

No power cost subsidies for private schools

Posted November 28, 2012 15:43:09

The Northern Territory Government says private schools will not be subsidised to cope with the significant increases in power and water charges.

Treasurer Robyn Lambley has told parliament that subsidies to government schools will cut their power tariff increases from 30 per cent to 15 per cent.

Mrs Lambley says five million dollars a year has been allocated to ease the burden on public schools.

“We will not be subsidising non-government schools for these tariff increases,” she said.

“They are privately operated and run, and like any private business, these tariff increases will have to be absorbed into the business plans.”

Topics: government-and-politics, electricity-energy-and-utilities, schools, darwin-0800, nt

Sparks keep flying over big power cost hikes

Updated November 27, 2012 21:12:34

Northern Territory Treasurer Robyn Lambley has used a Moody’s credit rating assessment to attack the former Labor government over the financial sustainability of the Power and Water Corporation.

The Government says it has no choice but to put up power charges by 30 per cent and water by 40 per cent, because the utilities provider is struggling financially.

Ms Lambley has told parliament that Moody’s reported in January that the corporation would continue to put a strain on the budget and the Territory’s debt position if something wasn’t done.

“Those projections ominously forecast that the debt burden would be pushed to 113 per cent of government revenues by 2014-2015,” she said.

Opposition Leader Delia Lawrie has defended her role as the former treasurer, telling parliament that Moody’s rated the Territory economy as double-A plus, with a stable outlook.

Former chief minister Shane Stone says Ms Lawrie is trying to distract Territorians from the financial position of PowerWater.

Ms Lawrie says the Government is raising power prices to prepare the utility to be sold to Queensland company Energex, which is chaired by Mr Stone.

Mr Stone says the claim is absurd and Ms Lawrie knows power prices need to rise because she allowed the corporation to incur a huge debt.

“She was the treasurer, she was in charge, she had responsibility for the finances of the Territory,” he said.

“She has left behind an appalling mess, like no other treasurer in the history of the Territory.”

Meanwhile, Environment Centre director Stuart Blanch says the power price hikes are only a short-term solution.

He says the increases will help pay for historic under-charging, but won’t address the system’s maintenance costs, which will continue to rise.

Mr Blanch says the Government needs to address long-term electricity costs by encouraging the take-up of solar power.

“What we don’t yet have is a model from the government that changes from a largely centralised, fossil-fuel-powered electricty distribution system to a more decentralised renewable power regeneration and distribution system,” he said.

“We should look at what other countries and states are doing, and take a leaf from their books.”

Topics: government-and-politics, electricity-energy-and-utilities, nt, darwin-0800

First posted November 27, 2012 16:27:52

Power blackout hits parts of Alice Springs

Posted November 26, 2012 17:13:01

The Power and Water Corporation says most of Alice Springs is without power this afternoon.

A spokeswoman says homes and businesses in Araluen, Gillen, Larapinta and Braitling are the most affected.

At this stage Power and Water crews have not found the problem and cannot say when the power will be restored.

Topics: electricity-energy-and-utilities, alice-springs-0870

Winter blackout: Govt proposes 350MW power cut for Karachi

NTDC cannot legall­y cut power perman­ently under the power purcha­se agreem­ent: KESC.  According to the power ministry, 350MW from KESC’s transmission lines will be diverted to the national grid and will be distributed equitably across Pakistan. PHOTO: FILE


The government has mapped out a plan to cut power to the Karachi Electric Supply Company (KESC) for three months beginning December, which means that Karachi is going to face eight-hour power outages daily during the winter season. The move is also being seen as an election strategy to calm the provinces that were turning against Sindh.

Under the power load management plan, 350 megawatts (MW) of power supplied to KESC by the National Transmission and Dispatch Company (NTDC) will be suspended for winter to offset the impact of a decline in hydropower generation.

Sources told The Express Tribune that the plan was formed following directions of President Asif Ali Zardari who said that power supply to the KESC should be cut to calm the provinces, particularly Punjab which is more critical of 650MW supplied by NTDC to Karachi under a legal agreement.

On the contrary, the plan also hopes to achieve easing of the energy crisis in the coming months due to closure of canals from December 20 to January 31, by implementing an equal load-shedding plan across the country. Hydropower generation is expected to decline to 1,500MW from 6,500MW.

Government sees power outages as the biggest hurdle to success in the next elections, sources say.

The power sector has been given top priority in the revised gas allocation policy, according to which gas has been diverted from industrial units to power plants to maximise power generation. It is expected that more gas will be provided to the power sector to enhance generation and to acquire this extra gas, supply will also be suspended to the industrial sector for three months.

Sources said that power suspension may be continued till March, 2013 and the government had succeeded in getting an approval from the Council of Common Interests (CCI) to move ahead with the plan.

“It is not legally permissible for the NTDC to cut power permanently following the power purchase agreement, valid till 2015, signed with KESC. The move could result in a legal battle,” KESC said.

Karachi’s power supplier has been asked to boost capacity by operating inefficient power plants to bridge the gap after the suspensions takes place.

The meeting

In a meeting on Wednesday with the power ministry, National Electric Power Regulatory Authority said that only those idle power plants with better efficiency rate should be operated to boost power generation. However, sources said that Minister of Water and Power Chaudhry Ahmed Mukhtar said that the CCI had made its decision; therefore it will be implemented at any cost.

Other members included chief secretary of Sindh, managing director of KESC, Nepra and representatives of finance and petroleum representatives.

Managing director of the KESC accused Sui Southern Gas Company (SSGC) – Karachi’s gas supplier – for not providing sufficient gas to operate the power plants. However, official of the petroleum ministry said that KESC should sign a Gas Supply Agreement (GSA) to get uninterrupted supply.

The meeting decided to set up a committee under secretary water and power to work out modalities for utilisation of idle capacity generation of KESC. The committee will submit recommendations within four weeks.

Mukhtar, in his opening remarks, said that the best possible way will be found to implement CCI’s decision. He said that 350MW will be added to the national grid and will be distributed equitably. He expressed that energy crisis will be controlled soon as number of measures were being taken to reduce power outages.

Power cost hikes flagged to cause more pain

Updated November 21, 2012 21:53:34

Territorians are bracing for a raft of price rises following savage increases in the cost of utilities.

The costs of rents, food, local government rates and even beer are expected to increase following the Northern Territory Government announcement that power prices will jump by 30 per cent, water 40 per cent and sewerage 25 per cent from January 1.

Darwin City Council quickly responded by saying council rates will go up to absorb the cost of power price rises.

The council says the price hikes will blow its current budget by more than $800,000 next year and by more than $1.6 million the following year.

Lord Mayor Katrina Fong Lim says rates are likely to go up by 3 per cent.

“It is very tough,” she said.

“This is an increase that will affect everyone, not just ratepayers, and it will have a flow-on effect across the city.”

The increase will come on top of a 4.5 per cent DCC rate increase announced in September.

Palmerston City Council is looking at increasing its rates by almost 6 per cent because of additional power and water charges.

Chief executive Ricki Bruhn says increased utility charges and a new charge for streetlight repairs will increase council costs by $785,000.

He says this represents the equivalent of a 5.9 per cent rates hike.

The chief executive of the Alice Springs Town Council says it is inevitable rates will go up because of the utilities price hikes.

Rex Mooney says the council will have to review its budget to see what the impact of the cost increases will be.

He says planned major works may have to be reviewed.

Opposition Leader Delia Lawrie says the cost rises will “cripple” some Territorians.

She says the cost of living in general will jump.

The NT Chamber of Commerce says businesses are disappointed by yesterday’s announcement.

Chamber president Julie Ross says Territory businesses are already doing it tough because of reduced government spending.

She says the price hikes may force some businesses to shut their doors.

“It is a vicious cycle,” she said.

“Not only will businesses have to increase their costs to cover the increase in utilities, there’s also going to be pressure on them to give their employees something to cover their cost of their domestic living,” she said.

The Alice Springs Chamber of Commerce says businesses in the town will be forced to pass on the increased costs to consumers.

A Top End pub owner has warned the price of beer and meals will rise to cover the price hikes.

Winnellie hotel owner Brian Peckover says it’s a huge increase.

“It is going to mean more expensive drinks,” he said.

“Everything they consume in the hotel will have to be put up.”

The Salvation Army’s Peter Wood says he expects there will be more demand for his organisation’s services as families struggle to absorb the price rises.

“It is just going to be an extra burden for Territorians,” he said.

The NT Council of Social Service says more families will need welfare help.

Spokesman Jonathan Pilbrow says some families may be forced to move out of the Territory.

“It is going to be tricky to find up to another $1,000 dollars or more per year for some of these low income households,” he said.

Treasurer Robyn Lambley says the Government has no plans for selling the Power and Water Corporation but it is an option.

She says no-one would want to buy PWC with its current debt, but it remains the only Australian utilities provider of its kind that is not privatised.

“Realistically, it is always on the table,” she said.

“But in terms of this Government, 13 weeks into its first term and faced with the challenges we face, we will not be considering selling the Power and Water Corporation for a long long time.”

A sustainable energy organisation expects interest in alternative energy solutions to increase as Territory residents come to terms with the price rises.

Cool Mob manager Robyn Knox, says people should look at the changes as an opportunity to change their habits.

“This is a chance for people to review what they’re doing and make the most of this, and not just to see this as a very negative thing, but see this as a way of changing your patterns,” she said.

Power and water price hikes take growing toll

Posted November 22, 2012 16:43:47

A Northern Territory aged care services provider says it will have to fund raise to make ends meet once the price of utilities increases.

Frontier Services says its budget is already stretched and it will be hit hard by the increase in power prices of 30 per cent and water of 40 per cent.

Regional manager Sharon Davis says the impact of the hikes will be huge.

“A quarter of a million dollars is our estimate,” she said.

“We will have to raise funds because our budget is set, our income is set, by the Federal Government.

“There is no way we can add an extra dollar here or extra dollar there to the residents’ fees, they’re all prescribed fees.”

Ms Davis also says the increases will put extra strain on recruitment and on current employees.

“I was almost in tears yesterday considering that impact,” she said.

“We struggle now to recruit.

“Darwin is an expensive place to live.

“Even in places like Katherine and Alice Springs, the costs are high, the housing is more expensive than interstate.

“So, it means somebody on $20 dollars an hour, they’re gone.”

Meanwhile, a Top End child care centre says it will have to raise its daily rate by about $10 next year because of the utilities price hikes.

Louise de Bomford is from a child care centre in Darwin and says there will be a significant flow-on effect to families.

“We are increasing from the first of January to another $5 per day, per child,” she said.

“We will be looking at possibly another $5 a day per child increase in the first quarter of next year.”

She says some families will feel the pinch.

Topics: government-and-politics, aged-care, child-care, electricity-energy-and-utilities, nt, darwin-0800, katherine-0850, alice-springs-0870

High power costs hampering SME growth

LAHORE: With the increase in cost of power generation, small and medium enterprises find it difficult to operate, while the large scale manufacturers rely on cheaper alternate energy sources, said sources here on Tuesday.

Small scale manufacturers lament that it is difficult for them to operate efficiently due to the energy crisis as power generation cost increases as one shifts from gas to furnace oil to diesel.

Mansoor Abbas, a small scale tractor part manufacturer, said that the power supplied by Pakistan Electric Power Company costs industries Rs11 per unit, while the power generated by industries having gas run generators costs Rs6.5 per unit and the fuel cost of furnace oil run generators produces electricity at Rs18 per unit. “Diesel run generators produce electricity at Rs27 to Rs32 per unit depending on the generator’s size,” he added.

“Small-sized industries are subjected to longer hours of power outages and can afford diesel generators only,” he said. “It is not feasible to produce products from power generated through diesel.”

Diesel costs five times more than electricity generated through gas run generating sets, he added. “High production costs have forced small industries to drastically reduce their production capacity,” he stated.

Another small producer of plastic parts, Abdul Haleem, said that power and gas are the main cost components in the production of plastic products even when normal state supplies are available. He added that it is impossible for a small plastic machine factory to shift to any other fuel except gas or state supplied power.

“A decade back, we were expanding when power supplies were normal,” he observed, adding that the small scale plastic manufacturers are closing down their businesses. “We provided employment to over 100,000 workers, which has been reduced by 50 percent,” he regretted.

Chairman All Pakistan Textile Mills Association Ahsan Bashir said that things are not as rosy for large scale manufacturers as perceived by some quarters. “It is not feasible even for the textile industry to generate power from furnace oil and diesel, which is why 25 percent of the country’s spinning capacity has been closed,” he added. “Gas is denied to the textile sector for over 180 days a year, while power shutdowns of four to eight hours daily are a routine now.”

According to Bashir, only spinning mills having close to 100,000 spindles with other composite units are flourishing. “There are a few mills having such high capacities,” he said. “Even these industries cannot operate comfortably on diesel or furnace oil generated power.” They have gone for alternate power generation where the fuel used is biomass, agricultural waste or municipal waste, he added. “They can afford huge investment in this regard,” he said, adding that their large size and diversity of products enables them to use alternate energy sources. “Other spinners are trying to establish composite units, which would require an investment of Rs5 billion,” he said. “The markup cost even today is high priced and is about three percent higher than the regional average.”

President Lahore Chamber of Commerce and Industry Farooq Iftikhar said that the cement industry has shifted to either coal (imported), which costs Rs8 per unit of electricity or to biomass and municipal waste. These huge plants, he added, are surviving comfortably and keeping their cost of production manageable.

Helping out: USAID upgrades power ministry’s IT infrastructure

“The IT upgrad­e equipm­ent will help improv­e the flow of work and proces­s cases effici­ently,” says Moore.  “The IT upgrade equipment will help improve the flow of work and process cases efficiently,” says Moore. PHOTO: FILE


“The United States Agency for International Development (USAID) is helping the Ministry of Water and Power improve its IT infrastructure in order to efficiently manage operations and decrease losses,” USAID Energy Adviser Timothy Moore said on Tuesday at an inauguration ceremony for the launch of an IT upgradation project for the Ministry of Water and Power.

“The IT upgrade equipment will help improve the flow of work, process cases efficiently and boost the speed of interaction with subsidiary organizations,” he said. “Staying organised and keeping proper records is an essential part of any successful industry,” he added. USAID has installed 45 computers and three servers in the Ministry of Water and Power to improve its performance. The IT infrastructure investment is a part of a wider US energy assistance programme.

Published in The Express Tribune, November 21st, 2012.

View the original article here

Power cost shocker as utility prices soar

Updated November 20, 2012 17:14:02

The Northern Territory Government has announced utility cost increases that will push up bills for the average family by more than $2,000 a year.

From January 1, power bills will rise by 30 per cent, water by 40 per cent, and sewerage by 25 per cent.

Pensioners and some seniors will pay half of those increases.

The Power and Water Corporation says the moves will increase revenue by $163 million a year.

The corporation has a debt of $1.9 billion.

This is about 40 per cent of the Territory Government’s total debt.

Chief Minister Terry Mills had flagged the “substantial” price rises in a taxpayer-funded advertising campaign earlier this month.

The announcement of the actual rises was made this afternoon.

Mr Mills says the cost rises are needed to reduce the Territory’s financial risk.

He says the previous Labor government put off raising prices to a more sustainable level and would have been forced to make the same decision if it had won the election.

“If we were continue along with the ill-disciplined, self-indulgent view of the former government … that would further jeopardise the financial future of the Northern Territory,” he said.

Water and sewerage rates had already risen by 60 per cent since 2009, and electricity costs by more than 20 per cent.

Topics: electricity-energy-and-utilities, government-and-politics, nt, darwin-0800, alice-springs-0870

First posted November 20, 2012 14:30:26

Power sector sustains hit of Rs400 billion in four years

ISLAMABAD: The power sector has sustained a hit of Rs400 billion which is not being refunded by the FBR for the last four years, as the revenue collecting authority collects 16 percent GST on the electricity billed amount knowing that the recovery of billed amount from the electricity consumers hovers in the range of 84 to 87 percent annually, a senior official at the Ministry of Water and Power said.

The power distribution companies pay approximately Rs120 billion as 16 percent GST to FBR on its average total annual electricity billing of approximately Rs750 billion. However, the FBR refunded Rs20 billion of Rs120 billion every year for the last four years, holding back Rs400 billion on one pretext or the other. The FBR functionaries say that power distribution companies did not pay the GST on subsidies and losses which is why they were justified to hold back the amount collected in the head of GST.

Distribution companies also pay 16 percent GST on the excessive billing which sometimes gets settled at reduced volume of billing. However, the collected GST on excessive billing is not paid back. Now the Ministry of Water and Power has moved the summary to the ECC that is to meet here today with Finance Minister Dr Hafeez A Sheikh in the chair, seeking permission for distribution companies to pay the 16 percent GST on the collected amount on electricity billing. Under the existing practice, the FBR is charging 16 percent GST on the total billed amount, not on the recovered amount of electricity bills.

Four years back, distribution companies were used to paying GST on recovered amounts of electricity bills but top mandarins started charging GST on the total billed amount to show its performance in terms of collecting the revenue.

Both the FBR and the Ministry of Water and Power were in litigation of Rs64 billion which the FBR owes to distribution companies in the head of GST, said the official.

The ECC is also going to take up the summary seeking the restoration of the subsidy on the agriculture tube wells in Balochistan. The Finance division is the mover of the summary and Ministry of Water and Power did not oppose it.

Officials said that the ECC was not the proper forum to take up this subject after the 18th amendment. However, the Punjab government has opposed the move of the centre to restore the subsidy without taking it into confidence. In the case of Balochistan, the provincial government’s share in subsidy stands at 60 percent whereas the centre’s share is 40 percent. In other federating units, provincial governments pick up the whole subsidy. The subsidy to agriculture tube wells was earlier suspended a year back. In Balochistan, the central government will extend Rs14 to 15 billion subsidies to tube wells if it is restored.

In Punjab, the Central Power Purchase Agency (CPPA) provides electricity to tube wells at subsidised rates and the Punjab government is supposed to pick the subsidy of 25 percent as in the past. However, the Punjab government seems annoyed over the summary that the Finance Division is going to place today in the ECC meeting.

View the original article here

Solar power is now cheaper than diesel generators

Fallin­g costs are likely to make photov­oltaic cells a viable source of altern­ative electr­icity produc­tion in Pakist­an.  Falling costs are likely to make photovoltaic cells a viable source of alternative electricity production in Pakistan. DESIGN: TARIQ GILANI


It was once thought to be one of the most expensive forms of electricity, but prices of photovoltaic cells have dropped so dramatically over the past two years that solar electricity is now cheaper than diesel-fired generator electricity and may soon compete even with the heavily subsidised cost of grid electricity in Pakistan.

In many parts of Pakistan, even off-grid solar power systems can produce electricity at approximately Rs14.40 per kilowatt-hour, or about $0.15 per kWh, according to Shaaf Mehboob, vice president of the Renewable and Alternative Energy Association of Pakistan (REAP), an industry group.

By contrast, grid electricity for most upper-middle class consumers in Pakistan currently costs in the range of Rs11 to Rs13 per kWh and diesel-fired generators can cost as much as Rs32 per kWh. While gas-fired generators can still produce cheaper electricity – owing to the highly subsidised domestic consumer gas prices in Pakistan – the natural gas shortage in the country has made the solution unviable.

That dramatic fall in the price of a unit of electricity is largely due to the sharp decline in the prices of photovoltaic cells, or solar panels. “The cost of importing one watt [of photovoltaic power generation capacity] is now just $1, compared to $2 just over a year ago, and down from $4 in 2008. That decline is quite noteworthy,” said Mehboob.

He said this on the sidelines of the inaugural session of a five-day training programme on photovoltaic systems organised with the help of Alternative Energy Development Board (AEDB) and a German technical training firm, GIZ.

“The results of this reducing cost is now being seen in the market as more and more people are opting for solar panels especially in big cities of Pakistan,” said Mehboob. “It is all about economic viability. Today, solar energy is much cheaper than it was ever before hence people are opting for it.”

Solar panels are now increasingly being recognised by many individual and even some industrial users in Pakistan as a cost-effective alternative to diesel generators and more reliable than gas-fired generators. Yet despite the economic logic, the rate of uptake appears to be low. REAP officials say that Pakistan imported just 15 megawatts of solar power production capacity in the first ten months of 2012.

The solar-power industry in Pakistan, however, is excited about its growth prospects. REAP started in 2010 and has already grown to over 270 member companies nationwide. Many importers have found particularly strong demand in parts of the country with unreliable grid electricity, such as the northern parts of Khyber-Pakhtunkhwa. Some companies, even large ones like Yunus Textile Mills, are considering installing solar panels as an alternative source of electricity to their back-up generators.

The sharp decline in photovoltaic cell prices is due to the dual effect of rising production in China and slowing demand in Europe, the main market for solar energy.

The irony of sun-starved Europe beating sunshine abundant Pakistan in solar energy adoption was emphasised by the German engineers who were present at the workshop. “The average solar radiation in Pakistan is significantly higher than Germany where solar panels do not produce energy in months like December and January when sunlight is usually low,” Raphael Lechner, one of the German trainers, told The Express Tribune. “Pakistan has a long way to go in the alternative energy sector, even when compared to its regional peers.”

Part of the reason for the lower uptake is the extraordinarily high subsidies on electricity given by the government to all consumers, regardless of ability to pay. In fiscal 2012, the government spent Rs500 billion subsidising electricity, more than half of the total budget deficit for the year. That subsidy artificially lowers the price of grid electricity in Pakistan to below average production costs, which renders otherwise workable alternatives like solar energy unviable.

Yet the solar energy industry is still optimistic, given the financially unsustainable nature of the government’s subsidy policy, which causes grid electricity to be highly unreliable in many parts of the country. In most of Punjab, summer power outages can last as long as 20 hours a day, a situation that is likely to fuel the demand for more reliable, even if slightly more expensive, solar electricity.

Published in The Express Tribune, November 20th, 2012.

PSRMA calls for early restoration of power, gas to steel mills

LAHORE: Mian Murad Ashraf, vice chairman of Pakistan Steel Re-Rolling Mills Association (PSRMA), called for immediate restoration of electricity and gas supplies to steel mills, according to a statement.

“The suspension of gas and electricity supply to the industry has deprived workers of their jobs, besides causing huge financial losses to millers and the government as well” he said. ”The abrupt suspension in electricity supply has shocked the steel millers as they have already been without gas.” They have failed to understand the logic behind such decisions, he added.

“Most of the days the gas supply remains suspended and once it is restored, its low pressure does not permit the mills to start production,” he said.“The government should implement an innovative methodology to overcome the low pressure phenomenon.”

According to Ashraf, despite the closure of the industry due to electricity outages, it has managed to retain its workforce. “How will the industrialists continue to pay their workers when the industries remain closed?” he asked. He questioned the government as to why industries are being targeted when trade and industry is the backbone of the economy.

Ashraf urged the government to fulfill its promise regarding equitable electricity supply to all parts of the country as discrimination particularly in view of the industry in Lahore causes damage beyond repair to the steel industry.

“At a time when furnace and re-rolling mills have laid off workers and are operating with skeleton staff due to non-supply of gas, the sudden suspension of electricity has sent a shockwave to workers and owners,” he claimed. “It would have been wiser on the part of the government if it had devised a foolproof strategy to stop power and gas pilferages, which is one of the major causes of shortages,” he concluded.

View the original article here

Desert solar power plan in doubt

 Desertec had ambitious plans to deliver electricity from renewable sources to Europe via undersea cables An ambitious plan to provide 15% of Europe’s power needs from solar plants in North Africa has run into trouble.

The Desertec initiative hoped to deliver electricity from a network of renewable energy sources to Europe via cables under the sea.

But in recent weeks, two big industrial backers have pulled out.

Continue reading the main story
I think it is struggling to find a reason to continue – it is clear it’s lost its original purpose, it is looking for a new direction”

End Quote Prof Peter Droege Eurosolar And the Spanish government has baulked at signing an agreement to build solar power plants in Morocco.

Desertec was set up in 2009 with a projected budget of 400bn euros to tap the enormous potential of solar and other renewables in North Africa.

The hope was that by 2050, around 125 gigawatts of electric power could be generated. This would meet all the local needs and also allow huge amounts of power to be exported to Europe via high-voltage direct current cables under the Mediterranean sea.

Continue reading the main story  Every hour the Sun bathes the Earth with enough energy to satisfy global energy needs for a year Solar energy currently accounts for about 0.1% of the global energy demand Solar energy is the primary source of power for today’s Nasa missions

Source: National Geographic/Nasa

But three years later, the project has little to show for its efforts. Two large industrial partners, Siemens and Bosch, have decided they will no longer be part of the initiative.

According to Dr Daniel Ayuk Mbi Egbe, a professor at the University of Linz in Austria and an expert on African solar resources, this is not good news.

“Siemens and Bosch are very big companies,” he told BBC News, “if they don’t want to support this initiative it is going to be difficult for Desertec.”

It seems some governments share this reluctance to go forward.

One of the first concrete steps that Desertec announced was a plan to build three solar power plants in Morocco. A declaration of intent was due to be signed recently by a group of countries including Spain and Italy. But the Spanish government demurred, citing difficulties in finding the subsidies the project would need.

Hans-Josef Fell is a Green party MP in the German parliament who has sponsored renewable energy legislation. He’s sometimes referred to as the father of the feed-in tariff that has helped wind and solar power succeed in Germany. He thinks the Desertec initiative is too reliant on public subsidies.

“The governments get cold feet for one reason, Desertec needs too much support in tax money – all the public budgets are over borrowed – and tax money is not easily available,” Mr Fell said.

A solar power plant in Morocco uses mirrors to concentrate rays from the sun

Desertec says that these are small problems and will not detract from the overall success of the project. Spokesman Klaus Schmidtke told BBC News the initiative is in good shape.

In reference to the problems with Spain he said: “We are talking about a declaration of intent between some government so the Desertec initiative is not involved in these negotiations – these are done by the governments. There is no reason for us to fear any problems.”

But others are not so sure. Prof Peter Droege is the head of Eurosolar, the European association for renewable energy.

“I think it is struggling to find a reason to continue – It is clear it’s lost its original purpose, it is looking for a new direction,” he commented.

“One of the main attractions of renewable is to become energy independent,” he said.

“If you have tied yourself to another external source you have to pay for, you are missing the entire point of the renewable energy transition we are in.”

Concentrating solar power technology has been proven in many parts of the world including at this plant in California

There have been worries that the unstable political situation in North Africa is also causing concerns for investors and for governments. But according to Daniel Ayuk Mbi Egbe, the problem is more fundamental.

“The fathers of Desertec say their aim was to exploit North African energy for the European market,” he says, “but what about Africa itself?”

He added: “When you go to many African countries there are constant electricity cuts – if you want to help then you need to think not just about exporting to Europe but about supplying Africa as well.”

One positive element for the project is that there have been suggestions that China might be willing to invest so that it can get access to technology. It is interested in learning how to use high-voltage direct current cables such as those proposed for bringing power across the Mediterranean.

Green MP Hans-Josef Fell says they could be just what Desertec needs.

“China’s money could help, China wants the know how. Yes perhaps China could save the project, they are very potent,” he told BBC News.

Price hikes flagged in Power and Water shocker

Posted October 30, 2012 18:09:22

Electricity price rises have been flagged amid concerns that the Power and Water Corporation is in dire financial straits.

Treasurer Robyn Lambley has told the Northern Territory parliament that she sought, and received, the resignation of corporation board chair Judith King.

Ms Lambley said Power and Water Corporation could not survive without ongoing government support.

“A private company would have been moved into administration in such circumstances,” she said.

She said she had received correspondence showing the board’s chair was aware of the organisation’s situation a year ago.

“Consequently, on Monday, I asked for the resignation of the chair of the Power and Water Corporation board,” she said.

Ms King’s resignation was tendered today.

The Treasurer indicated Territorians could face higher tariffs to make Power and Water commercially viable.

Opposition Leader Delia Lawrie is claiming power, water and sewerage prices could increase by up to 50 cent.

The Treasurer today told Parliament that the Power and Water Corporation is not trading at a sustainable level.

“Look it’s a guessing game at this stage in terms of the CLP plans,” she said.

“We know they are talking about commercial sustainability.

“If you go to the Reeves Report, commercial sustainability would see about a 50 per cent increase across your power, water and sewerage bills.”

Topics: electricity-energy-and-utilities, parliament, political-parties, darwin-0800, nt

Hoteliers given power to show sex workers the door

Posted November 02, 2012 20:18:24

Civil libertarians have slammed changes to laws in Queensland which would allow hotel and motel owners to deny accommodation to sex industry workers.

The amendments to the state’s Anti-Discrimination Act mean hoteliers can now refuse a room to a sex worker or evict them if they think they are operating a business on the property.

The Queensland Government says the move protects the rights of business owners, but civil libertarians say it is a dangerous step backwards.

Earlier this year a fly-in, fly-out sex worker took the owner of a central Queensland motel to court.

The Drovers Rest Motel had banned her from the premises when they discovered she was bringing clients back to her room.

She appealed the decision and won on the grounds the motel owners had breached the state’s Anti-Discrimination Act.

However, Attorney-General Jarrod Bleijie says the Queensland Government has now amended that law.

“I just think Government have to act when we see business people being attacked and having to compensate people because they’re trying to run their business,” he said.

“And they have the right to run their business how they want to run their business and if that means kicking out sex workers that are operating in these particular motels, because they don’t want that type of business in their motel, then I think that should be their right to do so.”

Mr Bleijie says it is already illegal to run a business in a motel or hotel room under Queensland’s Liquor Act and the anti-discrimination laws have made it difficult to enforce.

“This is where we have the discrepancy,” he said.

“The Liquor Act says one thing and the Anti-Discrimination Act says another.

“So what we’re actually doing is changing the Anti-Discrimination Act so it falls in line with the Liquor Act, because the owner of the motel or operator of the motel has an obligation under that Liquor Act to make sure that business is not being conducted in a motel room or conducted on the side of a motel.”

However, Terry O’Gorman from the Queensland Council of Civil Liberties says the changes to the act were rushed through with little public consultation.

“Under this Government that’s got a huge majority, no upper house to keep them under control, we’re seeing a reversion to the Bjelke-Petersen years of bring forward legislation, don’t consult with anyone except your favourites,” he said.

“That has the effect that the legislation is extreme and often when legislation is the product of non-consultation, it turns out to have significant unintended consequences.”

Mr O’Gorman says he is worried changes to the law will remove safeguards against broader discrimination.

“The whole history of why anti-discrimination legislation has been brought in around the country, but particularly in Queensland, is because you had, particularly in country areas in the past, in the ’70s and the ’80s, hotel and motel owners refusing accommodation particularly to Aboriginal people because they thought they lowered the tone of the place,” he said.

“That’s why you had anti-discrimination legislation brought in.”

Prostitution is legal in Queensland if sex workers are in a licensed brothel or working privately.

But Mr O’Gorman says moves to ban sex workers from hotels and motels could risk their health and safety.

Mr Bleijie argues if prostitutes are worried about where they can work, they should change their profession.

“Well, it’s not an industry I would like to see thriving, of course,” he said.

“I think it devalues people by participating in this industry.

“If a sex worker has particular concerns about where they’re going or where they want to work, then I would encourage them not to do it. I’d encourage them to get out of the industry.”

The amendments to Queensland’s Anti-Discrimination Act are likely to be passed in State Parliament later this month.

Topics: prostitution, hospitality, mining-industry, discrimination, moranbah-4744

Griffin Coal power plants sold to Japanese

Updated November 06, 2012 21:47:21

After more than 18 months of negotiations, the administrator of the collapsed miner Griffin Coal has exchanged contracts for the sale of two power plants in the South West.

In April last year, administrators from KordaMentha announced two Japanese energy corporations would buy the power plants in Collie.

Administrator Scott Kershaw says the original sale price of $1.2 billion has been secured.

He says he hopes to settle the sale within the next month.

“A good deal for the creditors of the Griffin Coal company,” he said.

“It’s a good deal for the financiers of the project and it’s a good deal for WA in my mind because it takes away the uncertainty that has existed around the ownership of the Bluewaters power station.”

Mr Kershaw says the sale will ensure future energy supplies keep up with demand in the region.

“They are meaningful contributors, material contributors to the state’s electricity supply, there is the potential for further generators to be built, approval has already been granted for Bluewaters Three,” he said.

Topics: coal, collie-6225, perth-6000

First posted November 06, 2012 20:14:16

$63m contract awarded for Mount Isa power station

Posted November 14, 2012 09:39:29

Another gas-fired power station is to be built in north-west Queensland, with hundreds of jobs expected to be created.

APA Group and AGL Energy have announced a $63 million contract for the construction of the Leichhardt power station, south of Mount Isa.

It will provide up to 60 megawatts of back-up generation capacity for the Diamantina power station.

That facility is currently under construction at Mica Creek and will provide power for Xstrata and Ergon Energy from 2014.

Spokesman Stephen Ohl says both facilities are a massive investment and show confidence in the region.

He says some of the contractors working on the facility will be local, as well as some coming in from other areas.

“The total investment is over $600 million,” he said.

“During the construction, we expect the workforce to peak at something around 300 people.”

He says a gas-fired, combined cycle power station is extremely efficient.

“A lot more greenhouse friendly than coal-fired power on the east coast being transported by cables into the region and even more efficient than the existing gas-fired power station in Mount Isa,” he said.

“There is always the prospect of additional users as mining develops in the region.”

Mr Ohl says Leighton Contractors has been awarded the contract for the Leichhardt facility.

“The customers are Xstrata and Ergon Energy. Ergon Energy obviously supplies all the electricity to the local community in the region,” he said.

“We are in the process of obtaining approvals for the Leichhardt power station.

“We expect to have those approvals by the end of this year and construction is due to start early to mid-2013.”

Topics: company-news, regional-development, electricity-energy-and-utilities, regional, community-development, mount-isa-4825

Higher power bills flagged in energy white paper

Updated November 08, 2012 16:32:31

Consumers who use lots of power at peak times could soon be forced to pay more for electricity, as part of the Federal Government’s plan to cut energy consumption and create a fairer billing system.

Energy Minister Martin Ferguson say there is no quick fix to counter the energy price rises of recent years, but he is challenging the states to introduce reforms which might ease some of the pain.

Today he releases the Government’s long-awaited energy white paper which calls for an overhaul of electricity pricing and for innovations to allow customers to better manage their energy use.

“Pricing structures are resulting in inefficient peak demand,” Mr Ferguson will say in a speech to be delivered later today.

“This means that additional capacity is required to be built that might only be used for one per cent of the year.”

He says demand-based pricing and smart meters will help overcome that problem, and allow consumers to monitor their energy use more closely.

Mr Ferguson concedes that many of the ideas included in the white paper will need the cooperation of the states, and he is urging them to take a bipartisan approach to the issue.

“This will require making some hard decisions and sometimes overcoming populism for what is in the long-term interests of consumers,” Mr Ferguson will say.

The policy paper paves the way for tough negotiations between the Commonwealth and the states – the first is set for next month’s Council of Australian Governments (COAG) meeting.

Mr Ferguson will unveil the white paper in Victoria – a state he says is a model for energy sector reform.

His Opposition counterpart Ian Macfarlane has welcomed the move.

“Victoria now boasts the lowest transmission charges in Australia because there is a privatisation of the network,” he said.

“So we need to encourage the states but you won’t get the states to do what needs to be done by politicising the issue as Julia Gillard has done or by waving a big stick at them.”

To coincide with the release of the Government’s energy white paper, we asked readers if they thought the electricity pricing system need to be overhauled. Here’s what they had to say.

But any change will require political courage and Queensland is going to need some convincing.

The State Government is adamant its electricity assets would not be sold without a mandate from the electorate.

Queensland’s Energy Minister Mark McArdle is sticking by the state’s policy of ensuring far-flung electricity consumers do not pay more than those closer to Brisbane.

“We are quite happy to work in conjunction with the Federal Government to try and resolve the issues but it must be a true partnership,” he said.

“One of the issues that we are facing in this state is the very high cost of green schemes that are passed through to the consumers.

“Privatisation is simply not an issue on our agenda, we don’t believe it is the way to go and we are yet to be convinced of an argument that has been properly mounted to show us that privatisation is the way to go.”

The white paper will say that electricity pricing needs to be overhauled to stop inefficient investment in infrastructure which is only used during rare peak demand times.

Smart meters, which are being rolled out in Victoria, may be part of that overhaul.

Energy Networks Association chief executive Malcolm Brown says the technology allows customers to monitor prices so they can adjust their electricity use accordingly.

“If customers were aware of the full cost of using that power at that time, they would probably use less energy at that time,” he said.

The white paper envisages gas-fired electricity generation as a growing part of the energy mix but gas prices are expected to increase as exports rise and producers are worried that big industrial users will pressure the Government to keep prices down.

The Energy Minister says the gas market should not be interfered with – a sentiment the Australian Petroleum Production and Exploration Association (APPEA) chief executive David Byers welcomes.

“We shouldn’t be interfering with those basic issues of supply and demand,” Mr Byers said.

“That is the way in which we create effective and efficient marketplaces in commodities such as iron ore and coal and wheat and really gas is no different in that respect.”

Topics: electricity-energy-and-utilities, federal-government, federal—state-issues, australia

First posted November 08, 2012 08:03:40

Senators offer bright ideas to cut power bills

Updated November 01, 2012 16:51:34

A government-backed Senate committee has put forward a raft of ideas to help cut household power bills, including giving consumers the ability to switch off in times of peak demand.

The report found the bulk of price rises over recent years have been caused by significant investments in the distribution network, with a smaller contribution being made by the carbon tax.

One of its key recommendations is for the introduction of cost-reflective pricing in conjunction with the rollout of smart meters, which would give households the ability to cut electricity supply when spot prices reach a certain level.

Committee chairman and Labor senator Matt Thistlethwaite said the change would mean that only those people using electricity at peak demand would have to pay.

“Effectively, low-income households without air conditioners are subsidising the cost of high-income households running air conditioners during peak times,” Senator Thistlethwaite said.

“This is unfair.”

Under the proposal, which is based on an idea put forward by the Australian Energy Market Commission, large energy consumers would be required to move to the cost-reflective pricing system.

However, it recommends that smaller consumers have the choice to either opt-in to the scheme or remain on a flat network tariff.

Last month, the Productivity Commission released its own report that suggested a move to demand-based pricing could slash household power bills by up to $250 a year.

Both the commission’s report and the Senate inquiry have largely backed the Prime Minister’s claim that power price spikes have been caused by electricity companies “gold-plating” their transmission networks.

The Senate committee has recommended significant changes be made to the formula used to approve network upgrades to remove the “perverse” incentive to over-invest.

“These recommendations are a win for consumers, and the states must adopt these reforms when they are presented to COAG (Council of Australian Governments) later this year,” Senator Thistlethwaite said.

Greens leader Christine Milne says the ball is now in the Government’s court to get the states on side.

“The last thing we want is those state governments – which actually make substantial amounts of money out of running the electricity system – we don’t want them to be able to keep on doing that at the expense of people,” Senator Milne told reporters in Canberra.

“The challenge is going to be, does the Prime Minister and her Energy Minister Martin Ferguson, do they have the courage to take this on with the states?”

But the Coalition has accused Labor and the Greens of doing everything they can to push up the cost of electricity through the introduction of the carbon tax.

Liberal senator Mathias Cormann says blaming state governments for power prices rises is a “cynical distraction”. 

“The whole point of Labor’s carbon tax was to push up the cost of electricity and consequently reduce demand,” he said.

Some of the committee’s recommendations were revealed by the Sydney Morning Herald newspaper yesterday, in what the inquiry’s chairman described as an “unauthorised” leak.

Senator Thistlethwaite has written to committee members, as well as Energy Minister Martin Ferguson and Climate Change Minister Greg Combet, to ask if they could explain the disclosure.

The committee has decided to ask for a Privileges Committee investigation into the matter.

Topics: electricity-energy-and-utilities, federal-government, federal-parliament, australia

First posted November 01, 2012 16:12:17

Govts inappropriate policies result in gas, power crises: Jang Forum

KARACHI: Speakers at the Jang Forum have unanimously attributed inappropriate policies of the present and past governments as the prime reason behind the gas and energy shortages in the country.

Haroon Rashid, vice president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said that the industry, which is the main employment generator, is the worst hit by gas shortage, particularly the fertiliser industry.

He categorically said that transport must be the least priority for gas allocation, as they have alternative fuels available.

Rashid said that the regulators have been pursuing corrupt practices, resulting in mushroom growth of compressed natural gas (CNG) filling stations and now there is no gas for them.

Zahid Hussain, former managing director of Oil and Gas Development Company Limited (OGDCL), said that the cumulative unaccounted for gas (UFG) of Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) accounted for 20 percent as against the international standard of four percent.

“The UFG is out of control and always increasing. If it is contained to eight percent of both networks, the requirement of the CNG sector could be met easily,” he said.

Hussain said that the CNG sector has invested a huge amount of money and they should not be targeted, adding that the government should look for alternative gas supply resources, including imports.

Samir Gulzar, chairman of All Pakistan CNG Association (APCNGA) Sindh, said that it is no more feasible for them to carry on their business after the decision of the Supreme Court reducing CNG prices by Rs30 per kilogram.

He said that in addition to the announced gas outages, the gas utility did not provide enough pressure due to which the processing time of their compressors has increased and they are unable to serve more vehicles.

Gulzar said that they have suggested the authorities and the regulator to process the “flare gas”, ie, high sulfur and moist gas and provide it to the CNG sector. He said that 75mmcfd of flare gas is being burnt every day.

They have also suggested to process and transport in containers gas from dormant wells but their suggestions were rejected, he said.

Gulzar was highly critical of Karachi Electric Supply Company (KESC), which, according to him, is killing gas in its inefficient plants.

Haji Mohammad Tawab of Transport Ittehad said that they are left with no other option but to close their business.

APTMA threatens to stage protest against power, gas outages

LAHORE: All Pakistan Textile Mills Association (APTMA) and the Lahore Chamber of Commerce and Industry (LCCI) have strongly protested suspension of electricity in Punjab with the APTMA threatens to take workers to streets if power situation is not restored within a week, according to a statement on Saturday.

Addressing a press conference after an emergent general body meeting of APTMA, Shahzad Ali Khan, chairman of APTMA Punjab Chapter, said that he was shocked by the abrupt and threatening power shut down by the Lahore Electric Supply Company on Friday that continued today, as well.

The Lahore region was already facing gas suspension for three days and the power cut brought the entire industrial sector to a halt.

“We tolerated six hours power outages in Punjab since May because there is genuine power shortage as against the supply of 15,000MW the demand was over 17,000MW,” he said, adding that with dependable power production capacity of 14,000MW, Pakistan Electric Power Company (PEPCO) is producing only 11,000MW.

“This is not tolerable,” he said, and threatened to take extreme measures if power supply is not restored within a week.

Khan said till now the industry has retained the workforce, despite closures due to electricity outages. “We are not in a position to continue paying our workers, while our industries remain closed,” he said, and warned that it would be nightmare for the federal government if 1.5 million workers agitated on the streets.

“The situation would be worse than what the government is facing in Karachi,” he said, adding that the textile workers in the age group of 18-25 years and drawing Rs9,000 per month would go out of control if they are deprived of even this meager income. The APTMA central chairman wondered as to why the Punjab industries are being targeted.

Gohar Ejaz, group leader of APTMA, said that the power crisis is due to the incompetence of the ministry of water and power. “There is gas shortage, as well in Punjab but Sui Northern Gas Pipelines Limited (SNGPL) has taken the industry into confidence and provided gas in the best possible way, keeping the interests of all consumers in mind,” he added.

Farooq Iftikhar, president of the LCCI, feared a surge in unemployment graph and crime rate in case of complete closure of steel mills that employ millions of workers.

The business community is foreseeing some betterment in the electricity supply after the assurance of the secretary water and power during her visit to Lahore a few days back but unfortunately the electricity situation has further aggravated. No schedule of restoration of power has been spelled out by Lesco, he said.

Iftikhar said that at a time when furnaces and re-rolling mills have already laid off workers and are operating with the skeleton staff because of non-supply of gas, the sudden suspension of electricity has sent a wave of shock to the workers and owners alike.

“How would the government be able to control crimes when a large number of people would be without jobs due to thoughtless decisions,” he wondered.

He said that it would have been wiser on the part of the government, if it had devised some foolproof strategy to stop power and gas pilferages that is one of the major causes of the shortage of these utilities.

Mills warns of big rise in power and water costs

Updated November 07, 2012 14:08:37

Chief Minister Terry Mills is standing by his prediction of substantial power and water price hikes for the Northern Territory.

He says the Government plans to increase tariffs to deal with Power and Water Corporation’s debts and bring utility costs in line with the national average.

But Mr Mills says existing power and water subsidies will remain.

“Quite honestly, I can tell Territorians there will be an increase,” he told ABC radio’s Julia Christensen.

“It will be substantial but we can’t say for certain what that amount is.

“Our primary objective is to get this business on to a sound footing.”

He says funds earned from the price hike will also be used to fund network and generation upgrades.

“We have got to have a well-run, effective service, right here and now,” he said.

“We have to get it on to an efficient footing so at least it operates properly.

“That can’t be achieved unless there is an increase in tariffs.”

Meanwhile, Darwin Lord Mayor Katrina Fong Lim says the city council may have to re-evaluate its planned rate rises because it did not take into account significant increases in its power and water bills.

Topics: government-and-politics, electricity-energy-and-utilities, local-government, darwin-0800, nt

First posted November 07, 2012 11:54:40

Business lobby group supports power deregulation

Posted November 09, 2012 09:55:57

WA’s Chamber of Commerce and Industry has backed a Commonwealth push to deregulate the State’s retail energy sector.

A white paper recently released by the Federal Government calls for measures to boost competition and reduce regulation in a bid to ease rising energy prices.

The Chamber’s Tim Bray welcomes the suggestions including one to install smart meters in homes.

He says it is also time the State Government stopped setting the price of electricity.

“We think that the move to pricing being set by an independent regulator is a great step on that pathway that can ultimately move us to a place where the market is able to determine the most efficient cost for consumers,” he said.

He says small changes can be made now, to make things easier ahead of full deregulation.

“If you always say it’s for another day then that day never comes,” he said.

“So the priority has got to be about that long term goal of making sure the market is reformed in a way that allows the most efficient cost to be provided to both business and consumers across the whole.”

The Chamber is part of a Federal Government round-table focusing on reforms to the energy market.

However, the WA Energy Minister Peter Collier says the state’s market faces a different set of challenges to the rest of the country and it is not ready for deregulation.

“We’ve had massive issues with the separation of Western Power into the four entities, we’ve still got a long way to go before we get to a situation where we’re paying for our electricity,” he said.

“We’re pretty much a niche market, we’re not part of the national electricity market and we never will be.

“We’ve got plenty of regulation here in Western Australia, we’ll always work with the Federal Government, but at this stage, certainly in terms of retail deregulation, we’re still a long way off.”

Topics: electricity-energy-and-utilities, perth-6000

Power giant SSE’s profits up 38%

  SSE chairman Lord Smith of Kelvin said that higher profits meant more jobs and tax revenues SSE, one of the UK’s biggest energy suppliers, has seen half-year profits surge by 38.3%.

The company made £397.5m in the six months to the end of September, compared with £287.4m in the same period last year.

SSE, in line with other major energy suppliers, put up its domestic gas and electricity prices by an average of 9% one month ago.

The firm said in its statement that the increase reflected market conditions.

Lord Smith of Kelvin, chairman of SSE, said the market remained “challenging” and that “higher gas and non-energy costs unfortunately had to be reflected in the increase in household energy prices”.

SSE was the first of the major suppliers to raise its prices, which the company said was due to price pressures outside its control. Lord Smith defended the move.

“While some observers may choose to criticise SSE for making a profit and paying a dividend,” he said, “I believe that profit and dividend allow SSE to employ people, pay tax, provide services that customers need, make investments that keep the lights on and create jobs, while providing an income return that shareholders like pension funds need.”

‘No loss-leaders’

SSE estimates that it lost about 115,000 customers – or 1.5% of the total – during the six months. During a conference call with reporters, chief executive Ian Marchant said that about three-quarters of that loss was perhaps due to SSE putting up its prices first.

Continue reading the main story SSE: 15 October, gas and electricity up 9%British Gas: 16 November, Gas and electricity up 6%Npower: 26 November, Gas up 8.8%, electricity up 9.1%Scottish Power: 3 December, gas and electricity up 7%EDF: 7 December, gas and electricity up 10.8%E.On: No price rise before the end of 2012He blamed some of the customer switching on rival power suppliers offering attractive introductory deals to lure customers. “We don’t offer loss-leader products,” he said.

The company also said that the jump in profits was partly the result of customers turning up their heating during April and September.

The two months were unusually cold compared with the same period in 2011, when temperatures were above average.

But these explanations have not stopped criticism of the profits and price rises from union leaders and consumer groups.

“It is chilling that companies such as SSE should announce these enormous half-year profits when families are being forced to take the hit for yet another massive price hike,” said Mike Jeram, head of business and environment at the Unison trade union.

Richard Lloyd, executive director of consumer group Which?, said the government should set up an independent review to look at whether recent price increases were justified.

“Without greater scrutiny of energy prices, consumers simply will not believe that they are getting a good deal,” he said.

Adam Scorer, of watchdog Consumer Focus, said: “Energy companies need to make profit so they can invest in our energy infrastructure. But if confidence is to be rebuilt in this market, the information that all energy firms are required to provide must be fully transparent, comparable, and include profit and trading information from across the whole of their business.”

Gary Hornby, an energy analyst at Inenco, said that wholesale gas and power prices were on the rise and investment in cleaner forms of generation remained costly, with these costs being passed on to consumer.


SSE’s announcement comes at a time when the gas industry is under investigation by regulators amid allegations that firms manipulated the wholesale gas market.

On Tuesday, Energy Secretary Ed Davey said he was “extremely concerned” at the allegations and would apply the “full force of the law” if needed.

All of the UK’s big six energy suppliers, including SSE, have denied any involvement. Mr Marchant repeated on Wednesday that his company operated in a “fair and legitimate way”.

He said that UK regulators had not yet contacted SSE for any information, but added that the company would co-operate in any way it could.

SSE used to be called Scottish and Southern Energy.

Govt seals deal on power revamp

By state political reporter Zoe EdwardsUpdated November 13, 2012 16:13:08

Tasmania’s Energy Minister Bryan Green has revealed he has struck a deal with the Greens on major changes to the state’s energy sector.

The minority government partners had clashed over how best to deal with Hydro Tasmania’s monopoly on energy production in the state.

After weeks of negotiations, Mr Green says he expects the Lower House will approve legislation on Thursday to allow for the regulation of the state-owned company.

The Minister is keeping secret the details of the deal, but says he has agreed to fund a Greens’ proposal aimed at giving households better control of their electricity use.

“Effectively we’re committing, through the regulated arrangements, to provide $10 million to start a communications platform for Smart Grid, that’s starting in the next two years,” he said.

Mr Green says Smart Grid technology allows consumers to turn household electrical items such as hot water cylinders on and off.

The Minister says Labor’s plan to regulate Hydro’s selling activities has not changed under the deal.

Treasury analysis, released by the Government, reveals the Greens’ policy would not lower electricity prices, has unacceptable implementation costs and was risky when compared with Labor’s plan.

Topics: electricity-energy-and-utilities, states-and-territories, tas, hobart-7000, launceston-7250

First posted November 13, 2012 16:09:27

Social revolution: Rising economic power of Pakistani women

As more women enter the workfo­rce, they are beginn­ing to make the econom­y a more inclus­ive place.  Pakistani women are better educated and are less burdened with child-care than at any time in history


In what is likely to be the single most transformative trend in Pakistani society, it is becoming increasingly clear that Pakistani women are becoming more active participants within the economy, a fact that many commercial enterprises have already noticed and accounted for in their business strategies.

In a special report this week, The Express Tribune takes a look at the rising power of the Pakistani female consumer, as well as her impact on the Pakistani economy. (And we apologise at the outset for the irony of having this special report be written entirely by a team of male reporters.) We will examine some of the possible causes for why more women are entering the workforce, as well as how businesses are taking into account the fact that the purchasing decision-making authority of Pakistani women has expanded far beyond the stereotypical realm of the kitchen.

First, some of the numbers: according to the 2011 Pakistan Employment Trends Report, compiled by the Pakistan Bureau of Statistics, female labour force participation has jumped from 16.3% in 2000 to 24.4% in 2011. That jump represents an extra seven million women in the work force.

So who are these women? There is very little specific research on the profiles of women who have entered the workforce, but the 2012 Economic Survey of Pakistan, issued by the federal finance ministry, states that a major proportion of the rise appears to be taking place in urban areas. The government does not break down employment data by specific sectors or levels, but it appears – at least from anecdotal evidence – that women are entering the workforce, to varying degrees, at most levels and virtually all sectors.

Their reasons for joining the workforce have also not been documented in detail, but there are at least a few statistics that provide hints about their motivations. Education levels appear to be rising across the board, and fertility rates are hitting an all-time low virtually every year. Pakistani women are better educated and are less burdened with child-care than at any time in history (much more than men, but less than their predecessors a generation ago.)

Another factor appears to be need: according to The Express Tribune’s analysis of data provided by the Household Integrated Economic Survey, the bottom 20% of households in Pakistan have not seen their incomes keep pace with inflation. Many patriarchal households have had to abandon their traditionalist strictures against women working outside the home and let their female relatives work to bring in more income.

Seven million women is not a number to be trifled with: while women have yet to crack the glass ceiling in Pakistan (representation at senior levels of management remains shamefully low), they are beginning to gain increasing economic clout. And this increased clout is changing the way business is done in Pakistan, largely by making it more inclusive than it used to be.

Many companies, for instance, have caught on to the idea that female customers have money to spend, but may not necessarily be comfortable speaking to male salespersons, regardless of how friendly or courteous they may be. That, in turn, has led to the rise in hiring of female staff members, creating stable corporate-style employment opportunities for blue-collar women. The rising spending power of upper-middle class women is helping their lower-middle and working class sisters get jobs.

It is also perhaps not a coincidence that the first Pakistani law against sexual harassment in the workplace was passed in 2011. Perhaps politicians now feel that urban women are an increasingly important electoral constituency.

And the rise in female consumers has also given birth to a new breed of female entrepreneurs in Pakistan. This is a game being played not just by the daughters of rich businessmen, but also by more working class women, aided by government efforts like the incubation centres set up by the Punjab government in Lahore, and the state-owned First Women’s Bank providing lending facilities.

There is a lot of analysis that needs to be done about the rising economic power of Pakistani women, and we hope to provide a start with this special report. One thing is for certain: Pakistani women are already changing this economy for the better.

Published in The Express Tribune, November 12th, 2012.

Nandipur power project: Chinese firm demands $40m as compensation for delays

Says machin­ery stuck at Karach­i port causin­g losses to the compan­y in the form of deprec­iation and damage­s.  A judicial commission had held the law ministry responsible for causing delays in the completion of the project. PHOTO: ARIF SOOMRO/EXPRESS


The Government of Pakistan finds itself mired in a new controversy: a Chinese firm involved with the Nandipur power plant has demanded payment of $40 million in compensation for the oft delayed construction of the 425 megawatt project, if the government still wishes for the firm to continue with the project. The combined-cycle power plant was to be installed in Nandipur, near Gujranwala in Punjab.

The Chinese firm had served a notice to the Government of Pakistan calling for the termination of the project contract due to delays in its construction. During renegotiations, however, the firm agreed not to ditch the project; nonetheless, it countered with a demand that it be paid for losses suffered because of depreciation and damages on machinery stranded at the Karachi Port for the two year delay in the project’s completion.

The Economic Coordination Committee (ECC), in a meeting held in the first week of July, had approved an increase in the size of sovereign guarantees for the project from Rs5.3 to Rs19.1 billion, in favour of a consortium of local banks, as a time-gap arrangement till foreign loans for the Nandipur Project could be obtained. The economic body had also waived demurrage and detention charges amounting to Rs856.5 million on machinery meant for the project that was to pass through the Karachi Port.

Sources said that on top of the waiver of demurrage and detention charges, Chinese firm Dongfang Electric Corporation Limited (DECL) Zhang Guorong has demanded that Pakistan pay $40 million for losses suffered by the company due to the non-clearance of its machinery from the port. When contacted, the spokesperson for the Ministry of Water and Power was not available for comment.

Official sources said that the firm now wants new terms and conditions if the Government of Pakistan wants it to continue with the project. “The project is once again stalled due to the new demands of the Chinese firm for a huge sum of money [sic],” a source said.

The Supreme Court has already taken notice of the frequent delays in the completion of the Nandipur project, and fingers have been raised towards one particular minister.

A judicial commission formed by the Supreme Court had held the federal law ministry responsible for causing delays in the completion of the project. Ministry of Water and Power had sought a legal opinion on foreign guarantees from the Ministry of Law and Justice regarding its contract with the Chinese firm on the Nandipur project, but the summary was not forwarded for two years by the law ministry – from March 2010 to March 2012 .According to the original plan, the project was supposed to be completed in April 2011.

Published in The Express Tribune, November 13th, 2012.

Abu Dhabi-led group submits lowest price for Saudi power station

Abu Dhabi/Khobar: An Abu Dhabi-led group submitted the lowest price to build a power station in Saudi Arabia, a Saudi statement said, and a source said the group will go into exclusive talks on the project.

The consortium led by Abu Dhabi National Energy Co (TAQA) and also comprising Samsung Engineering and Qatar Electricity & Water Co (QEWC) had made the lowest bid for the Rabigh 2 project, a statement from the Kingdom’s sole utility Saudi Electricity Co (SEC) said on Monday.

The bidding consortium will enter into exclusive talks with SEC and, if selected, will jointly own 50 per cent of the project company along with SEC, a second source said.

TAQA’s bid ranked ahead of four other consortiums that bid for the plant, included groups headed by Saudi-based ACWA Power, South Korea’s Kepco and Japan’s Marubeni.

Article continues below

Rabigh 2 is a green-field heavy fuel oil power plant, the fourth project in SEC’s IPP programme. It is located 175 km north of Jeddah on the west coast of the Kingdom.

Samsung and Alstom are the selected engineering, procurement and construction contractors, while the electricity generated by the plant will be sold via a 25-year power purchase agreement to SEC.

TAQA, whose controlling shareholder is the Abu Dhabi government, owns an interest in the 250 MW Jubail power plant in Saudi Arabia. The financial close for the project is scheduled for before March 31, 2013, the statement added.

JWTs Mansoor Karim makes Pakistan Power 100 list

KARACHI: JWT Pakistan CEO Mansoor Karim Shaikh has been named one of Pakistan’s most powerful and influential people in the inaugural Pakistan Power 100 list, alongside cricketer-turned-politician Imran Khan, Ehsan Malik, Chairman Unilever Pakistan, and Lord Nazir Ahmed, a member of the House of Lords and the UK’s first Muslim life peer.

The Pakistan Power 100 was created by UK-based consulting company Carter Anderson Group, which publishes the Global Power 100. Over 33,000 nominations were received for the Pakistan Power 100, which was judged by a panel led by Pakistan-born investor and BBC’s “Dragon’s Den” star, James Caan.

The Pakistan Power 100 winner’s book, which was launched at a black-tie event in London on September 29, includes messages from British Prime Minister David Cameron and Pakistan President Asif Ali Zardari, who describes the Power 100 as “role models” whose “remarkable achievements are a source of inspiration for other Pakistanis.” “I am incredibly honoured and humbled to be included on this list,” said Mansoor.**

Coal-based power plants: Financing worth $1.14b under threat

ADB asks govern­ment to lift ban on coal import for power plants.  International bids had been invited for the import of coal, but “now the process has been stopped”. DESIGN: FAIZAN DAWOOD


The Asian Development Bank (ADB) has told Pakistan that it will hold back financing of $1.14 billion for over 1,000-megawatt coal-based power plants if the government continues to insist that these plants will run on Thar coal instead of imported coal.

A high-level ADB delegation, in meetings with Pakistani officials here on Thursday, said the bank would not finance Thar coal-based power plants as specifications of Thar coal did not meet requirements of the plants, say sources. Instead, the bank will provide funds for only 1,080MW power plants based on imported coal, which are in the pipeline.

However, the fate of these power plants is unclear as the prime minister has placed a ban on imported coal-powered plants and stressed that Thar coal should be used for such projects.

According to the sources, the Prime Minister Secretariat has asked the water and power ministry to allow investors installation of power plants that will be based on Thar coal and reject imported coal-fired plants.

In a three-year programme, new imported coal-based plants of 660MW were planned to be installed and existing 420MW thermal plants were to be shifted to imported coal.

“The government’s ban has halted work on these power projects,” an official of the water and power ministry said. Earlier, international bids had been invited for the import of coal, but “now the process has been stopped,” he said.

The official claimed that the ban had been imposed on the insistence of Sindh, which is encouraging exploration of Thar reserves. He said the government was spending billions on inter-corporate debt to run the expensive thermal plants and the prime minister’s decision would further delay the coal-based plants.

The shift to coal is aimed at reducing the runaway circular debt by Rs100 billion per annum. The debt has plagued the entire energy chain, forcing the government to spend billions of rupees every month to prop up the energy system.

“In the current month, the government has given over Rs20 billion to Pakistan State Oil (PSO) on account of oil supply to thermal power plants,” the official said.

According to a study conducted by the Ministry of Water and Power, the economy can save around $26 billion in fuel costs over the next 15 years if thermal plants of only 420MW are shifted to coal.

The recommendation came following the recent plunge in electricity production, caused largely by the financial crunch faced by power companies.

About 68% of the country’s power production comes from oil and gas. Though gas is a cheaper fuel, it is getting increasingly scarce, meaning plants that have the capacity to run both on oil and gas are forced to run on furnace oil. This, however, more than doubles the cost of electricity production.

In an effort to encourage independent power plants (IPPs), the water and power ministry has decided to reduce customs duty on equipment and spare parts needed for the shift to coal to just 5%.

Under a proposed plan, the IPPs will be given a maximum of one year to shift from oil and gas to coal. In this period, they will be paid to cover their returns and also interest payments on funds raised for the conversion.

The IPPs, which are regulated under the power policy of 1994, will be allowed to sell coal-based power to the national grid without any modifications to their contracts or approval from the regulators. However, those plants that come under the policy of 2002 will require regulatory approval.

Published in The Express Tribune, October 19th, 2012.

Austria to bid for power projects

Expres­ses intere­st in invest­ing in Tarbel­a-V extens­ion, other projec­ts.  Austria has expressed interest in investment in Tarbela-V extension project and other mega hydropower projects in Pakistan


Austria has expressed interest in investment in Tarbela-V extension project and other mega hydropower projects in Pakistan and says it will participate in the bidding for big water and power projects.

Various Austrian companies were already working in the energy sector of Pakistan and the country “will consider the offer for investment in small and medium hydroelectric projects,” said Axel Wech, the Austrian Ambassador to Pakistan.

Heading a two-member delegation, Wech said this in a meeting with Water and Power Minister Ahmed Mukhtar here on Thursday and discussed cooperation in the energy sector and opportunities for investment.

Mukhtar assured Austrian investors of facilitation on the part of the government, saying Pakistan was an energy-deficient country and offered great potential in hydel, wind and coal power production.

He asked them to invest in small and medium run-of-river projects as the government planned to change the energy mix to produce cheaper power.

Published in The Express Tribune, October 19th, 2012. 

Power subsidies: Govt spends two-thirds of budgeted amount in three months

All financ­ial benefi­ts from the releas­e of Coalit­ion Suppor­t Fund have been wiped out.  Staggering Rs272b is the size of the federal government’s net borrowings in the current fiscal year to finance the deficit, as of October 2012. CREATIVE COMMON


The government has spent Rs119 billion in power subsidies in just three and a half months, squaring off all financial benefits the country had received under the Coalition Support Fund due to the disbursement of $1.2 billion (Rs113 billion) in a single tranche by the United States. The subsidies amount to twice the subsidies provided to the power sector in the corresponding period of the previous fiscal year.

One of the reasons behind the massive surge in the power subsidies bill was the payment of Rs24 billion made to independent power producers, made on the directives of the Supreme Court of Pakistan, said sources in the finance ministry.

They added that the total bill also included payments on account of power differential tariffs, while some of Pakistan State Oil’s arrears were also cleared to avoid a default on international oil payments.

The lavish subsidies are likely to take a heavy toll on the budget. The government had budgeted Rs185 billion for power subsidies in fiscal 2012-13, and the amount paid so far comes to roughly two-thirds of the total allocated budget, suggesting the possibility of a huge overrun before the year is done.

For the last fiscal year, the government had budgeted only Rs147 for power subsidies, but had closed the year paying out roughly Rs500 billion under the head. The unrealistic budgeting had resulted in an historical budget deficit of Rs1.78 trillion, or 8.53% of the GDP.

Despite nose-diving revenues, the government had seemed to consolidate its fiscal position during the first quarter of the current fiscal year. The $1.19 billion received from the US in one tranche had helped economic managers keep the budget deficit at manageable levels so far. Now, it has been revealed that the money – obtained after frantic diplomatic lobbying and appeasement – has been used to fill a bottomless hole. It is feared that the government’s inability to implement much-needed reforms in the power sector will now result in an additional burden on taxpayers.

Sources said that according to initial estimates, the budget deficit in the first quarter (July-September) is expected to remain slightly over 1% of GDP. In the first quarter of the last fiscal year, the deficit was 1.3% of GDP. The improvement was primarily because of CSF payments.

Till October 2012, the federal government’s net borrowings to finance the deficit stood at Rs272 billion – equivalent to 1.14% of GDP.

A finance ministry official said the Federal Board of Revenue (FBR) has bagged Rs403 billion during the first quarter of the current fiscal year. The provisional collection figure is Rs22.2 billion, or 5.8%, higher than revenues generated in the same period during the previous fiscal year: lower than even the inflation rate, suggesting massive tax slippages.

For the current fiscal year, the government has imposed a Rs2.381 trillion tax target on the FBR. The International Monetary Fund, in its recent assessment, has said that the FBR can collect, at best, Rs2.23 trillion – around Rs151 billion less than the target.

The likely shortfall in revenues and soaring power subsidies will push the annual budget deficit beyond the targeted 4.7% of GDP, said the IMF. It has forecasted that the budget deficit will actually fall in the range of 6-6.3%.

The power sector has been the single biggest drain on resources over the past four and a half years: the government has paid roughly Rs1.2 trillion in subsidies to the sector over the period. To put things in perspective, the amount is more than the funds needed to build the Diamer Bhasha Dam.

Published in The Express Tribune, October 18th, 2012.

View the original article here

Power tussle in Planning and Development Division

ISLAMABAD: The Planning and Development Division (P&DD) is at war with itself, again. According to reports from within, the latest tussle to surface is between the secretary, who is the principal accounting officer (PAO), and members of the P&DD who consider themselves equal to the rank of the PAO.

Insiders say this episode of pulling-rank was triggered by a circular sent out by the deputy secretary of the Planning Commission, which said that the “competent authority” wants future Economic Coordination Committee summaries – along with the comments of chiefs – to be approved by the secretary P&DD and the deputy chairman of the Planning Commission before they are forwarded to the concerned quarters.

This circular, it is said, was sent to all members of the Planning Commission who were hired on special pay scales by the government, which, say the rankers, created distortions in the working of the Planning Commission.

Soon after, Member Energy Shahid Sattar issued a strongly worded rebuttal and said: “… it may kindly be noted that all members are constituent of the Planning Commission under the leadership of the Deputy Chairman and therefore approval of comments by the Secretary is not in line with the working and spirit of an independent Planning Commission. … [I]n light of the above, contents of the captioned circular may be treated as void and of no effect since they are neither in accordance with the structure of the Planning Commission nor have they been approved by the Deputy Chairman, Planning Commission or the Finance Minister who are the competent authority in matters of the Commission”.

China September power output growth at 3-month low

Thursday, 18 October 2012 09:54 Posted by Shoaib-ur-Rehman Siddiqui

SHANGHAI: China’s power output in September rose 1 .5 percent from a year ago, with the pace of growth cooling to the lowest in three months as a slowing economy dampened electricity demand from industrial users.

Power production in September was 390.7 billion kilowatt-hours (kWh), down 10 percent from August and the lowest since May, data from the statistics bureau showed on Thursday.

Annual growth in power output has slowed markedly from the double-digit rates posted most of last year, as demand from core industrial users in the steel, cement and smelting sectors weakened on the back of China’s economic slowdown.

China’s GDP grew 7.4 percent in the third quarter from a year earlier — in line with forecasts from economists polled by Reuters — the first miss of the official target since 6.5 percent growth in the first quarter of 2009.

In further evidence of slack industrial demand, power consumption rose just 2.9 percent from a year earlier in September, slowing further from the previous month to the lowest in eight months.

Tepid demand from energy-intensive industries has caused domestic coal prices to drop around 20 percent since January.

Copyright Reuters, 2012

Underground power line project tangled by doubt

Posted October 17, 2012 16:15:46

The future of laying power lines underground in Darwin’s suburbs is in doubt as the new Northern Territory Government says continuing the project was not an election promise.

The project to remove overhead power lines in the Top End city was begun by the Labor government ten years ago.

It promised to spend $80 million over 20 years on the project, saying underground cables provided safer and more reliable power, especially during the cyclone season.

The northern suburbs of Nightcliff, Rapid Creek and Millner have been converted to underground cabling.

Power and Water has put the project on hold.

It says it waiting for the go-ahead from the new Country Liberals Government.

Essential Services Minister Dave Tollner says it is a matter for Treasurer Robyn Lambly, but the Government has since issued a statement saying it was not an election promise to keep the program going.

Power and Water spokesman Bertram Birk says the Government has not yet contacted him about continuing the work.

“We undertook the project on the previous government’s behalf and that project has come to an end at this point in time,” he said.

“I’m sure they’ll let us know if they want us to continue with that project.”

A Darwin politician says a number of recent blackouts in several of the city’s suburbs show why power lines should be put underground.

The Member for Johnston, Ken Vowles, says in suburbs like Jingili there is a real concern about power outages.

“The people of Jingili need to be notified what’s happening,” he said.

“There was an undertaking that Jingili would be the next suburb and the CLP need to make sure that they are at least addressing the issue.

“It is an expensive exercise but it needs to be done in the Top End.

“The cyclone season is coming.”

Topics: electricity-energy-and-utilities, programs-and-initiatives, darwin-0800

Yallourn cuts power generation by a quarter

Updated October 17, 2012 19:32:09

The owner of one of Victoria’s biggest coal-fired power stations is slashing its generating capacity by a quarter.

EnergyAustralia says it is cutting the Yallourn power station’s output in the Latrobe Valley because of rising costs and a drop in demand.

Until now, the station has generated about a fifth of the state’s electricity.

EnergyAustralia’s spokesman Michael Hutchinson says only three of the four units at Yallourn will generate power.

“When the economy goes soft and demand sort of drops off, that puts some pressure on the actual economics of the operations,” he said.

“With the falling demand and the cost of carbon that comes into our operation, our operating costs have increased significantly, so we’re looking at a different way of operating the plant to look at how we can actually move it to an economically viable operation.

“We’d be hoping that the economy picks up and demand picks up.”

Last month the Federal Government abandoned plans to pay power generators to shut some of the country’s dirtiest plants, saying the deal would not bring value for money.

Environment Victoria’s Mark Wakeham says the cuts are a sign that the Federal Government’s carbon price is influencing business decisions.

“It’s good news as far as emissions are concerned,” he said.

“If that situation is maintained over the next year, emissions in Victoria will drop by about four million tonnes, however the closure is temporary at this stage.

“The unit is going to be mothballed and could come into production at some future time.”

Premier Ted Baillieu says he is concerned about the security of Victoria’s long-term electricity supply under a carbon tax.

“This is an unfortunate signal to the future if the carbon tax is having an impact in this way,” he said.

“This obviously has an impact, a potential impact, on capacity and the price of electricity, and I think that’s what we’re getting out of this announcement.

“It will certainly reduce capacity and that in turn limits the reliability, because if you don’t have the spare capacity then obviously reliability becomes an issue.”

Mr Baillieu says the decision could make electricity more expensive.

EnergyAustralia says the decision is not connected to the flooding of its coal mine in June.

Topics: electricity-energy-and-utilities, state-parliament, climate-change, morwell-3840

First posted October 17, 2012 12:42:15

Move to cap power prices

Posted October 16, 2012 12:48:36

The Tasmanian Government has announced power price rise caps for next year.

A Bureau of Statistics study released last month revealed Tasmanians were paying more for power than anyone else in the country, with power prices increasing by more than 10 per cent for the past three years.

Now the State Government has revealed it will extend the current power price determination until the start of 2014.

The Premier, Lara Giddings, has told Parliament the changes will mean prices will not increase by more than the consumer price index next year.

“This is a positive sign that electricity price increases are indeed flattening out,” the Premier said.

“While it’s ultimately the independent economic regulator who determines price, the Government expects that the extension of the price determination will mean that electricity prices will increase by no more than CPI.”

She says the independent economic regulator will still be responsible for setting power prices but will be constrained.

The Finance Minister, Scott Bacon, will table the regulations next week.

Earlier this year, the Government opted to forego $37 million in revenue to reduce the base price for electricity.

Topics: states-and-territories, electricity-energy-and-utilities, tas, hobart-7000, launceston-7250

Scottish Power to raise prices

15 October 2012 Last updated at 15:15 GMT  Four out of six of the major energy companies have announced price rises Scottish Power has become the latest energy company to announce a price rise, with gas and electricity bills going up by 7% on 3 December.

The firm has 2.3 million customers and the average annual dual fuel bill will increase to £1,271.

The rise, blamed on increased costs, comes just days after British Gas and Npower said they were raising prices.

A 9% price rise by SSE – which trades as Scottish Hydro, Swalec and Southern Electric – has just come into effect.

Consumer groups have often argued that energy firms raise prices in packs.

‘Difficult time’

The company said it had to increase prices for customers because the cost of transporting gas and electricity to customers’ homes, and of energy efficiency programmes, had risen.

“We work hard to protect our customers and we regret that we have had to announce a price increase,” said Neil Clitheroe, chief executive of retail and generation at Scottish Power.

Continue reading the main story
When half the market raises prices in just four days, consumers will question whether this is in response to volatile commodity costs or simply pack behaviour”

End Quote Adam Scorer Consumer Focus “We will be writing to all those affected customers over the coming weeks explaining what the price increase will mean for them.

“We understand that this is a difficult time for many people and we encourage our customers to contact us.”

The company announced a 5% gas price cut in February. The latest changes mean that direct debit customers will see a gas and electricity price increase of 8.7%. Those who pay by cash and cheque every quarter will see prices rise by 1.4%.

Meanwhile, those on prepayment meters, which are often those with financial difficulties, will see a price rise of 8.6%. However, these meters have greater running costs for energy firms.

Ann Robinson, of price comparison website Uswitch said some customers could ration their energy usage as a result.

“[This] move will be no surprise, but consumers will be disappointed and angry that these increases will be hitting them in the winter when the blow will be felt hardest,” she said.

Other price rises

The reasons for the price rise echoed the views last week of British Gas managing director Phil Bentley, who claimed that 85% of the price it charged to customers was outside its control.

British Gas, the UK’s biggest energy supplier, announced that it would raise its charges for both types of fuel by an average of 6% on 16 November. This will add £80 a year to the average dual fuel bill.

Meanwhile, Npower will increase the price of gas by an average of 8.8% and electricity by 9.1% from 26 November.

Adam Scorer, of watchdog Consumer Focus, said: “The volley of price hikes all coming in during the winter period will fuel consumer concerns about the energy market.

“Every time this happens it makes it difficult for consumers to believe that price rises are driven by real supply and demand issues. It feels as if companies raise prices in a pack because they see safety in numbers.

“This does not mean that wholesale price pressures are not real. But when half the market raises prices in just four days, consumers will question whether this is in response to volatile commodity costs or simply pack behaviour.”

Scottish Power SSE British Gas Npower E.On EDF

Power costs saving promised for some SA customers

Updated October 03, 2012 10:15:57

The SA Government says a proposal that about 25 per cent of South Australian electricity customers pay a lower rate next year should be extended to all customers on market deals.

A draft determination from the Essential Services Commission of SA (ESCOSA) would significantly reduce the allowance for wholesale electricity costs applying to standing AGL contracts in the state.

A final determination will be made in early December and the reduction would take effect from the start of next year, if approved.

The lower rate would apply those small businesses and households with standing contracts, rather than market contracts with AGL or other retailers which are not price regulated by the Commission.

Its CEO Paul Kerin said customers would see a significant saving.

“ESCOSA proposes an 8.1 per cent standing contract price reduction, which we anticipate will reduce an average household’s bill by around $160 a year,” he said.

Everyone on a standing contract will have to go down by 8.1 per cent but I imagine, with the Government bringing in legislation to abolish exit fees, you’ll see retailers following suit very, very quickly or suffer the consequences of having their customers change to people who do lower prices

“We have done this because the estimate of wholesale costs now is lower than the current wholesale cost allowance.”

SA Energy Minister Tom Koutsantonis said he believed the draft determination would lead to pressure on retailers also to reduce charges for the majority of customers who were on market contracts.

“If the independent analysis of wholesale prices has found that wholesale electricity is being charged at a too high a rate, I see standing contracts as being the ceiling rather than the floor and that means everyone below should go down accordingly as well,” he said.

“Everyone on a standing contract will have to go down by 8.1 per cent but I imagine, with the Government bringing in legislation to abolish exit fees, you’ll see retailers following suit very, very quickly or suffer the consequences of having their customers change to people who do lower prices.”

Premier Jay Weatherill said he wanted all energy companies to pass on the power price cut to all their customers.

“It’s something they can do. It’s something they should do and it’s something I demand of them,” he said.

The SA Council of Social Service said a reduction in prices was long overdue.

Greens leader Mark Parnell welcomed the prospect of some relief for some SA households.

“Finally sanity has prevailed. We have the lowest wholesale electricity prices in South Australia in eight years yet the retail price has continued to soar,” he said.

“The Greens are delighted the fall in wholesale prices, mainly driven by wind and solar, is finally being passed on to long-suffering consumers.”

At last, official ESCOSA recognition that retail power price rises ignored lower w’sale prices from renewables. Lower bills soon?

Greens’ Mark Parnell on Twitter

ESCOSA sets and regulates retail prices for the 25 per cent of small customers (residential and business customers using less than 160 megawatt hours per annum) who have a “standing contract” offered by AGL in SA.
The other 75 per cent of customers have elected to sign market contracts with their retail provider, which are not price regulated.
In setting the retail price for the standing contract, ESCOSA takes into account all the costs the retailer incurs, including the wholesale electricity cost – the expected cost a prudent and efficient retailer must incur to buy electricity to serve standing contract customers.
To provide retail contracts to electricity to their customers, retailers buy from the electricity spot market. Buying from the spot market means that prices can be very volatile. Prudent retailers generally “insure” against this spot price risk through hedging arrangements.
As hedging costs are significant, the wholesale electricity cost is significantly above the average spot price.
The wholesale energy costs represent about a third of the total cost of supplying electricity to retail consumers.
- From a backgrounder document supplied by ESCOSATopics: electricity-energy-and-utilities, industry, states-and-territories, government-and-politics, greens, welfare, community-and-society, sa, adelaide-5000, mount-gambier-5290, port-augusta-5700, port-lincoln-5606, port-pirie-5540, renmark-5341

First posted October 02, 2012 11:13:43

Solar electricity plant sold in NT power play

Posted October 04, 2012 12:51:48

The Southern Hemisphere’s largest tracking solar power plant at Alice Springs has been sold in a multi-million dollar deal.

The Uterne power plant began operating just over a year ago.

The one megawatt power station has more than 3,000 solar panels that move during the day to follow the path of the sun.

It was developed in partnership between internationally-based SunPower Corporation and the Northern Territory’s electricity provider, Power and Water Corporation.

It cost $6.6 million to build and the Commonwealth contributed $3.3 million to the project as part of its $94 million Solar Cities program.

It has now been sold to Australian-based alternative energy company Epuron.

The terms of the deal are not yet known.

Under a new arrangement, Power and Water will continue to buy electricity generated by the plant at an agreed rate for the next 20 years.

SunPower will continue to provide operational and maintenance services in conjunction with Ogden Power, which is based in Alice Springs.

The venture was financed by the Commonwealth Bank, making it Australia’s first major bank to support a solar project of this size.

Epuron executive director Andrew Durran said the acquisition made the company one of the largest solar project owners and asset mangers in Australia.

The solar station produces about 1 per cent of Alice Springs’ electricity a year and can meet 2 per cent of peak demand on a sunny day.

Epuron, which was founded in 2003, has also been involved in the development of a large number of power-generating wind farms, particularly in New South Wales.

Topics: electricity-energy-and-utilities, solar-energy, programs-and-initiatives, alice-springs-0870, darwin-0800

Power bills to jump in Melbourne’s north-west

Posted October 03, 2012 10:33:08

Households in Melbourne’s north-west will have to pay up to an extra $40 dollars a year for the next three years for electricity.

The Australian Energy Regulator (AER) has agreed to let Victoria’s five distributors increase the charges they pass on to electricity retailers, by $225 million.

The decision is the result of an Australian Competition Tribunal ruling that found the regulator underestimated the costs the networks face when it set prices in 2010.

The energy regulator’s chairman Andrew Reeves says people will pay an average of $19 extra a year, but Jemena customers will have to pay more.

“The costs vary between the networks and the impact varies,” he said.

“It ranges from about $8 a year for customers in the SP AusNet area, up to about $40 in 2013 and 2014, and a lesser amount in 2015, for customers in the Jemena district.

“The AER has decided to spread the impact over the three years, rather than see customers take a big increase just in one hit in 2013.”

Topics: electricity-energy-and-utilities, regulation, melbourne-3000, vic

Abbott ‘caught out’ on use of pensioner’s power bill

Updated October 10, 2012 23:52:43

Labor says Opposition Leader Tony Abbott has been caught out in his use of a “pensioner’s” electricity bill as part of his anti-carbon tax campaign.

In questioning the Prime Minister about Hetty Verolme’s bill, Mr Abbott said the customer “nearly had a heart attack” when she got her most recent power bill.

It had more than doubled since her previous bill to $1,563 for the months of June and July, and Mr Abbott wanted to know what advice Julia Gillard had for the Perth pensioner.

He followed up with a supplementary question: “With an $800 increase in just one bill of which 70 per cent is due to the carbon tax, how can the Prime Minister possibly claim that Hetty Verolme’s compensation is in any way adequate?”

Labor challenged Mr Abbott to table the bill in Parliament so it could verify Mr Abbott’s claims, meaning it has now been made publicly available.

An electricity consumption graph on the side of the bill shows that most of the increase was due to a dramatic increase in power usage at Mrs Verolme’s home.

It also includes a note saying that electricity prices had increased on July 1 by 2.255 cents per unit because of the carbon tax, which “represents an estimated increase of 9.13 per cent for an average daily usage of 15.89 units”.

That is less than the Treasury forecast of a 10 per cent increase in electricity costs because of the carbon tax.

“Once again, the Leader of the Opposition caught out just like he was on Whyalla, caught out just like he was on the coal industry, caught out just like he was on lamb roasts, peddling fear (and) peddling reckless negativity,” Ms Gillard told Parliament.

“The one thing you’ll never hear from the Leader of the Opposition is anything that sounds like the truth about carbon pricing.

“The Opposition knows that the increase around the country has been what was predicted – 10 per cent or less.”

The power company that supplies Mrs Verolme is Synergy.

When it announced the 9.13 per cent carbon tax-related increase in June, it also said there would be a regular 3.5 per cent rise in power costs, taking the total increase to 12.63 per cent.

As a percentage of the overall percentage increase, the carbon tax component is just over 70 per cent.

Liberal frontbencher Christopher Pyne responded angrily to the Prime Minister.

“How can it be relevant for the Prime Minister to mislead the Parliament by claiming that the increase is 9 per cent when the Leader of the Opposition asked about 70 per cent of the increase in Western Australia?” Mr Pyne said.

The Opposition has also raised concerns about a potential carbon tax surcharge on phone bills.

It has obtained a sample letter from Telstra which considers a “Network Electricity Surcharge” linked to the Government’s move to price carbon.

A Telstra spokesman says the letter was prepared as part of a market testing process that is used to “gauge market understanding and reaction to certain topics”.

“We have been looking to understand customer reaction and understanding to carbon pricing, and this letter was one of several that was tested with this audience,” he said.

“We’ve made no decisions about pricing changes linked to this issue.”

Topics: federal-government, federal-parliament, electricity-energy-and-utilities, emissions-trading, climate-change, australia, wa

First posted October 10, 2012 16:47:30

Private sectors power dues higher than govt

LAHORE: The performance of the power sector has deteriorated alarmingly during the last four years, as not only its distribution losses (power theft) have constantly increased but for the first time private sector outstanding were higher than government sector, according to official data.

Data from the performance reports of Pakistan Electric Supply Company for the years 2002-03, 2006-07 (after which PEPCO was separated from WAPDA) and 2011-12 revealed sustained deterioration in the power sector performance.

Sukkur Power Supply Company received 4,179.72 million kilowatt hours from the National Transmission and Distribution Company in 2011-12 but it could bill only 2,666.48 million kWh of units to the consumers, as its distribution losses were 36.2 percent.

Experts are unanimous that 90 percent of the distribution losses are because of power theft, while the recovery of billed amount is only 51 percent. Of 100 units of electricity that Sukkur Power Supply Company received in 2011-12, it issued bills for only 63.8 percent units because of distribution losses and of 63.8 billed units, it could recover bills for 32.58 units. This means that the actual loss to the distribution company was 68 percent, according to the data.

At the end of 2002-03, total outstanding of PEPCO was Rs58.184, of which the private sector dues stood at Rs24.67 billion and public sector owed Rs33.50.

Interestingly, Federally-administered Tribal Areas (FATA) in 2002-03 was the largest defaulter of PEPCO with the dues of Rs25.33 billion.

Total provincial government dues stood at Rs1.492 billion only and Khyber-Pakhtunkhwa (at that time NWFP) was the largest defaulter with payables of Rs1.34 billion, it said.

PEPCO had advance payment of Rs335 billion from the Punjab government. The line losses in 2002-03 were 16.5 percent.

In 2006-07, the last year when PEPCO was under WAPDA chairman, total outstanding of PEPCO were Rs145.9 billion, of which Rs73.79 billion were against government and Rs48.25 billion were against the private sector.

From the government side, the main defaulter again was FATA with an outstanding amount of Rs64.73 billion followed by KESC, which owed Rs23.77 billion. The four provincial governments’ outstanding dues were Rs3.64 billion, of which Sindh alone owed Rs3.22 billion. Punjab again had paid a surplus amount of Rs381 million to PEPCO. The distribution loses in 2006-07 stood at 14.9 percent, the data revealed.

Five years later after PEPCO was placed under the secretary ministry of water and power, the situation has changed alarmingly. Total outstanding of PEPCO increased to Rs385.56 billion with the government sector dues rise to Rs188.28 billion and the private sector dues ballooning to Rs197.33 billion.

The four provincial governments owed PEPCO Rs84.53 billion by the end of June. This is an alarming increase of over 2,800 percent in five years. Sindh again is the largest defaulter with an outstanding amount of Rs52.96 billion, of which Rs17.3 billion were added in 2011-12 alone, it revealed.

KESC emerged as another large defaulter with the dues of Rs54.67 billion, adding over Rs13 billion outstanding in 2011-12. The distribution loses in 2011-12 were 18.2 percent, which are 3.3 percent higher than 2006-07, it said.

Former WAPDA chairman Tariq Hameed attributed the deteriorating performance of the power sector to the absence of a permanent head of PEPCO ever since its inception and even now after its dissolution.

The secretary ministry of water and power remained the acting head of the power sector utility ever since it was separated from WAPDA, he said.

Earlier the power sector was operating under the command of WAPDA where the authority enjoys full autonomy, he said, adding that the WAPDA chairman has affixed tenure protected by constitution that makes him immune from political pressure.

The ideal solution would be to reunite power and water wings of WAPDA. However, if it is not possible, the power sector authority should be given the same autonomy as enjoyed by WAPDA.

He said he preferred to resign as WAPDA chairman when the decision was taken to bifurcate WAPDA.

UAE may join Turkey nuclear power plant project: Turkey nuclear plant project

Ankara: The UAE could join a project to build Turkey’s second nuclear power plant if South Korea is involved, Turkey’s energy minister said Thursday.

“Officials from the UAE said they could be a partner in the project if South Korea undertakes the building of the nuclear power plant,” in northern Turkey, Taner Yildiz was quoted as saying by Anatolia news agency.

The government plans to build three nuclear power plants within five years in the hope of preventing a possible energy shortage and reducing dependence on foreign energy supplies.

Turkey struck a deal with Russia in 2010 to build the country’s first power plant at Akkuyu in the southern Mersin province.

Article continues below

The government plans to build a second reactor in northern Turkey, near the Black Sea city of Sinop. But it has not yet announced a location for a third reactor.

Ankara is negotiating with a number of countries including South Korea, China and Japan for the second power plant.

Thar coal to be utilised for power generation

KARACHI: Sindh Engro Coal Mining Company (SECMC) is all set to sign agreement with the power generation companies to supply them Thar coal following government’s decision to convert generation plants on to indigenous coal, said SECMC in a statement on Monday.

“In a historic decision, the government of Pakistan has now decided that a coal off-take agreement would be signed between the Generation Company and SECMC,” said the statement.

Earlier, the government called for converting such plants on imported coal, the company said, adding that the previous decision was reviewed after realising that it would keep the import bill of the country on the higher side.

Pakistan generates around 40 percent of total power from imported furnace oil. The practice is not seemed sustainable due to the lack of funds for the oil purchases, it said.“Development of power plants on imported coal will merely shift reliance from one imported energy source to another with inherent international pricing risks.”

SECMC’s mining project, which will cost $1.3 billion, is expected to take less than four years for completion. Failing which, the company will be liable to pay the liquidated damages. “The timeline of the mining project matches well with GENCO’s power project development at Jamshoro.”

GENCO is planning to convert its Jamshoro’s oil-based power plants and establish new power plants at the same site.

Powering the future: Thar to provide fuel for all coal-based power plants

Existi­ng, new power projec­ts to be design­ed as per Thar coal specif­icatio­ns. The Sindh government had requested that the existing and new power plants at Jamshoro be designed according to Thar coal specifications. PHOTO: FILE

ISLAMABAD: The government on Wednesday decided that Thar coal will be used for all coal-based power generation and all conversions of existing and construction of new power projects will be designed according to Thar Coal specifications in the future.

The landmark policy decision was taken by the Prime Minister Raja Pervez Ashraf, while chairing a meeting of the Thar Coal and Energy Board at the PM Secretariat. The meeting was informed that the Sindh Engro Coal Mining Company (SECMC) – a joint venture between Government of Sindh and Engro Powergen – and the Engro Corporation were working on an integrated coal mine and a power project with an estimated cost of $1.3 billion at Block 2 of Thar coal project for mining 6.5 million tons of coal per annum and establishing a power plant of 1,200 megawatts (MW). The premier also decided in principle to provide a sovereign guarantee to the SECMC and directed the Ministry of Finance to arrange the same.

Ashraf said that in the present financial situation, there was little space for providing sovereign guarantees. However, this was a strategic decision which had to be taken for meeting the growing energy requirements of the country, he stressed. The Sindh government had requested the federal government that the conversion of existing 800MW and new 600MW power plants at Jamshoro be designed according to Thar coal specifications. He directed the Ministry of Water and Power to sign, a coal off-take agreement between power generation companies and the SECMC for the Asian Development Bank financed conversion of the thermal power projects at Jamshoro.

“Today, we have laid the foundation of an energy policy, which is based on our indigenous resources and will lead to savings of huge foreign exchange presently being spent on the import of fossil fuels to run our thermal power plants,” Ashraf said. Besides, this policy decision will ensure energy security that had been eluding us for such a long time, he added.

The premier said that God blessed Pakistan with the sixth largest coal reserves and it was now up to us to utilise the huge coal deposits for the progress and prosperity of the country by generating affordable electricity. He hoped that the decisions will herald a new beginning and lay the foundation for sustainable socio-economic development of the country. Thar coal field were estimated to have reserves of 175 billion tons, 68 times higher than Pakistan’s total gas reserves.

Published in The Express Tribune, October 4th, 2012.

Power tariff comes down marginally

NEPRA cuts rate by 5 paisa to adjust for change­s in fuel price. The tariff revision will not apply to consumers of the KESC and lifeline consumers, who consume up to 50 units per month. PHOTO: ARIF SOOMRO/EXPRESS

ISLAMABAD: In a break with a constant increase in power tariff for a long time, the National Electric Power Regulatory Authority (Nepra) has approved a minuscule reduction of five paisa in tariff per unit on account of fuel price adjustment for the month of August.

The decision came in a public hearing conducted here on Wednesday with Nepra Acting Chairman Ghyasuddin in the chair.

The tariff revision will not apply to consumers of the Karachi Electric Supply Company (KESC) – a private entity which applies separately for tariff changes – and lifeline consumers, who consume up to 50 units per month.

According to officials of the Ministry of Water and Power, electricity tariff has gone up by a whopping 325% in the last four years.

At the hearing of its petition filed with Nepra – the power sector’s regulator, the Central Power Purchasing Agency (CPPA) said it collected net revenues of Rs59.645 billion on sale of 6.650 billion electricity units compared to the cost of Rs60.064 billion. Reference fuel price was projected at Rs6.69 per unit, but actual fuel cost stood at Rs6.64 per unit, a decrease of five paisa per unit.

Keeping this in view, the CPPA sought a tariff reduction of Rs0.0463 per unit for fuel price adjustment for August.

CPPA said electricity worth Rs973 million was wasted in August due to higher transmission and distribution (T&D) losses – a term used to reflect power theft and wastage.

Expressing serious reservations about the constant increase in T&D losses, Nepra Member Licensing Shoukat Ali Kundi and Member Tariff Khawaja Naeem asked CPPA and power distribution companies to bring down the losses.

They noted that some plants were not generating power, but these were being provided 50 megawatts as a standby arrangement. “Consumers are facing the burden of this power supply, which is not fair,” they remarked.

According to CPPA, the cost of power generated through diesel was Rs19.15 per unit, furnace oil-based plants produced electricity at Rs15.59 per unit, gas-based plants at Rs5 per unit, coal-run plants at Rs3.73 per unit and hydel resources at Rs0.08 per unit.

The share of hydropower in total electricity production was 39% compared to 30% for furnace oil-based plants and 23% for gas-fired plants.

In August, Pakistan imported 37.63 million units of electricity from Iran for Rs357.47 million, costing Rs9.5 per unit.

CPPA pointed out that the cost of thermal power generation had decreased automatically following a decline in prices of furnace oil in the international market. In August, power generation through other sources, including hydropower, stood low and this caused an increase in electricity production through imported fuel.

Published in The Express Tribune, October 4th, 2012.

Thar coal to power all coal fired power plants in the future: PM Ashraf

Prime Minist­er direct­s Minist­ry of Financ­e to provid­e sovere­ign guaran­tee to SECMC. The project aims at mining 6.5 million tonnes coal per annum to generate 1200 MW power at the attached power plant. DESIGN: FAIZAN DAWOOD

ISLAMABAD: The government on Wednesday decided that in the future only Thar coal would be used for coal-based power generation and all conversions of existing and new power projects would be designed on Thar Coal specifications.

“Today we have laid the foundation of an energy policy, which is based on our indigenous resources and will lead to savings of huge foreign exchange presently being spent on the import of fossil fuels to run our thermal power plants,” Prime Minister Raja Pervez Ashraf said.

The landmark policy decision was taken during a meeting of the Thar Coal and Energy Board at the Prime Minister’s Secretariat here.

The meeting was informed that the Sindh Engro Coal Mining Company (SECMC) and the Engro Corporation were working on an integrated coal mine and a power project at an estimated cost of $1.3 billion at Block 2 of the Thar Coal Project. The project aims at mining 6.5 million tonnes coal per annum to generate 1200 MW power at the attached power plant.

The Prime Minister also decided in principle to provide a sovereign guarantee to the SECMC, a joint venture of the Government of Sindh and the Engro Power and directed the Ministry of Finance to arrange the same. The decision for the sovereign guarantee was strange as Ashraf admitted himself that that the current financial situation allowed little space for providing sovereign guarantees, but justified it by pointed towards the growing energy requirements of the country.

The Government of Sindh had requested the Federal Government that the conversion of existing 800 MW and new 600 MW power plants at Jamshoro be designed on Thar Coal specifications.

The Prime Minister further directed the Ministry of Water and Power to sign within a week, a Coal Off-Take  agreement  between the GENCO andthe SECMC for the Asian Development Bank financed conversion of the existing 800 MW and new 600 MW  thermal power projects at Jamshoro.

“History will not excuse us if we do not take correct decision in time,” the Prime Minister said.

Thar Coal Field are estimated to have reserves of 175 billion tonnes, 68 times higher than Pakistan’s total gas reserves.

Those, who attended the meeting, included Chief Minister Sindh Syed Qaim Ali Shah, Finance  Minister Dr Abdul Hafeez Shaikh, Minister for Religious Affairs Syed Khursheed Shah, Minister for Water and Power Chaudhry Ahmed Mukhtar, Advisor on Petroleum and Natural Resources Dr Asim Hussain, Deputy Chairman Planning Commission Dr Nadeemul Haq, MNA Rubina Saadat Qaim Khani, Provincial Minister for Revenue Jam Mehtab Dahar, Provincial Minister for Irrigation Jam Saifullah Dharejo, Federal secretaries Finance, Planning Division, and Water and Power, Chief Secretary Sindh, Member Science and Technology Planning Commission Dr Samar Mubarakmand, MDTCB, CEO Genco Holding, President Engro Corporation, CEO SECMC andother senior officials.

Wooing investors: Govt may act as guarantor for AJK power projects

Lender­s are reluct­ant to give loans in absenc­e of sovere­ign guaran­tee.  The ECC’s green signal will help in bringing funds for the Neelum Jhelum hydropower project; paving the way for securing water rights over Neelum Jhelum River. PHOTO: FILE


The Economic Coordination Committee (ECC) is likely to approve government guarantees for building hydropower projects in Azad Jammu and Kashmir (AJK), meeting a key demand of foreign investors who are keen to invest in the state.

According to sources, the ECC will take up the issue in its meeting on Tuesday after foreign firms told the Ministry of Water and Power that international lenders were not willing to provide loans for hydropower projects in AJK because of the state’s legal status. They sought government guarantees to win loans and undertake the projects.

“The ECC’s green signal will also help bring funds for the 969-megawatt Neelum Jhelum hydropower project, located in AJK, which will pave the way for securing water rights over Neelum Jhelum River where India is building Kishanganga Dam,” a government official said.

Among foreign investors looking for investment opportunities, South Korea-based Star Hydropower Limited is seeking guarantees from the Government of Pakistan for investing in the 147MW Patrind Hydropower Project to be built on the boundary of Abbottabad and Muzaffarabad (AJK). The firm will complete the project in three-and-a-half years at an estimated cost of $400 million.

LNG import

The ECC will also consider a new initiative to import one billion cubic feet per day (bcfd) of liquefied natural gas (LNG) amid warnings from Dutch firm 4Gas – the developer of Mashal LNG project – that it will approach the international court if Pakistan went ahead with the new programme.

In a summary sent to the ECC, the Ministry of Petroleum and Natural Resources has proposed LNG import in three phases. Under long-term projects in two phases, 400 million cubic feet of LNG per day (mmcfd) will be imported in the first round and the same quantity in the second round. In addition to these, 200 mmcfd will be imported on a fast-track basis from international sources through direct negotiations, competitive bidding or spot purchases.

A deal may be struck for 10 years with a price review after every five years. Gas price will be determined on the basis of weighted average selling price and the cost of gas will not be passed on to consumers of other sectors.

New policy for motorcycle industry

The ECC will also consider a Ministry of Commerce proposal that new entrants to the motorcycle industry should be allowed to start production with 25% locally manufactured parts. They would take that level to 85% local parts at the end of five years of operation and those that failed to achieve the target would be penalised, the ministry said.

This policy will be applicable to motorcycles of 100cc and above capacity with new technology. However, existing motorcycle producers argue that the new policy will damage the industry. They allege that the policy is being framed to benefit an upcoming manufacturer, which is planning to produce motorcycles of more than 100cc capacity.

The ECC will also discuss a summary sent by the Production Division, seeking renewal of Rs2 billion worth of government guarantee for financially troubled Pakistan Steel Mills.

It will also decide whether to release latex foam imported from India by Shafi Lifestyle Limited, Lahore.

Published in The Express Tribune, September 30th, 2012.

Power generation plants to get more oil

Produc­tion drops after suspen­sion of gas supply. Power shortfall widened by 763MW as gas supply from Qadirpur field was suspended. PHOTO: FILE

ISLAMABAD: A secretary-level committee has decided to enhance oil supply to power plants, following suspension of gas supply from Qadirpur field, in an effort to increase electricity production and bridge the widening demand-supply gap.

In a meeting held at the Ministry of Water and Power here on Thursday, the Secretaries Committee on Energy reviewed the demand, supply and power generation in the country.

Water and Power Secretary Zafar Mehmood, Petroleum and Natural Resources Secretary Dr Waqar Masood and Joint Secretary (Power) Zergham Ishaq Khan attended the meeting.

The power shortfall widened as gas supply from Qadirpur gas field was stopped to four power plants – Rosche Power, Fauji Kabir Wala, Altern Power and Engro Power – because of technical fault at the field. As a result, power production dropped by 763 megawatts.

Power generation at four independent power plants (IPPs) near Lahore was also affected. These were Orient Power, Saif Power, Sapphire Power and Halmore Power, where production fell by 400 megawatts.

The meeting participants noted that about 1,100 megawatts had unexpectedly gone out of the system due to suspension of gas supply.

They resolved that all possible steps would be taken to restore supply from Qadirpur gas field at the earliest. Alternative resources would be utilised to reduce the demand-supply gap and steps would be taken to generate maximum power from oil-run plants, they said.

They decided that oil supply would be enhanced to both public and private sector power plants to curtail the shortfall. As per plan, the government will provide 5,600 tons of furnace oil to Kot Addu Power Company (Kapco), 5,800 tons to Muzaffargarh plant and 2,000 tons to Jamshoro power plant.

In addition to these, a total of 7,400 tons of oil will be supplied to AES Lalpir, Pak Gen, Saba Power, Sepcol, Atlas Power and Japan Power.

The officials expressed the hope that the increase in oil supply to the power plants would improve electricity production, cut load-shedding and give relief to the people.

Published in The Express Tribune, September 28th, 2012.