Archive for June, 2011

China’s ‘solar city’ rushes to catch power boom

Posted on June 23, 2011. Filed under: Alternative, Global, Solar |

BAODING (China): Solar panels jut out of streetlights in China’s self-proclaimed Clean Energy City. Tiny wind turbines twirl atop public buildings. Schools are due to teach students about “green living.” In the scramble to profit from demand for clean energy, this city southwest of Beijing is promoting itself as a manufacturing centre for solar, wind and other gear by transforming into a living showcase of environmental technology.

“Baoding is following a path of ecological civilisation,” a deputy mayor, Zhou Xingshi, told a group of visiting reporters.

Baoding illustrates the intensity of Chinese government efforts to profit from rising global demand for clean energy. Communist leaders are promoting solar, wind and hydropower to curb surging demand for imported oil and gas and see technology exports as a route to cleaner growth and higher-paid jobs.

Chinese utility companies are required to install wind turbines and Beijing has promised to pay part of the cost of solar equipment — a strategy that is driving the rapid growth of Baoding and other supply centres.

China led the world in clean energy investment last year at $54.4 billion, up 39 per cent from 2009, according to a March report by the Pew Charitable Trust. Worldwide, investment rose 30 per cent to $243 billion.

Baoding, 90 miles from the Chinese capital in the table-flat farmland of Hebei province, started billing itself as a renewable energy centre in 2002 after the success of Yingli Green Energy Co, a local startup founded in 1987 that grew into a major supplier of solar panels. City leaders officially declared Baoding a “Clean Energy City” in 2006.

Today, Baoding has two government research labs and 170 companies that produce clean power equipment. They include Zhonghang Huiteng Windpower Equipment Co, one of the biggest makers of wind turbine blades. Other fields targeted by Baoding for development include batteries and power transmission.

Baoding’s clean energy companies had 45 billion yuan ($7bn) in revenue last year, according to the city government. It says the local industry should grow by 30 per cent a year through 2016.

Local authorities work closely with companies, organizing job fairs, providing training and helping to recruit employees through local schools.

Companies also are attracted by Baoding’s “funding resources,” said Lian Shujun, deputy director of the Baoding National New and High-Tech Industrial Development Zone.

Lian gave no details but Chinese companies in favoured industries can receive government support ranging from tax breaks and low-interest loans to free rent in business parks.

Such support has prompted complaints by Beijing’s trading partners that the government is improperly subsidising Chinese companies and hampering market access. The US government said this month Beijing agreed to rescind some policies that American officials said amounted to subsidies to makers of wind turbines.

China already is the world’s biggest producer of solar and wind equipment. Yingli and other Chinese solar suppliers have long competed in global markets because their equipment was too expensive for domestic use. Chinese makers of wind gear are only starting to expand abroad but some domestic producers already are among the world’s biggest due to their vast home market.

The Chinese government says it wants at least 15 per cent of the country’s power to come from renewable sources by 2020. It is spending heavily on grants and other aid to propel technology development.

“The Chinese government is very supportive of the green market,” said Liansheng Miao, Yingli’s founder and chairman.

In a sign of high-level endorsement, Yingli received a 36 billion yuan ($5.5 billion) line of credit last year from state-owned China Development Bank.

Miao rejected what he said was the notion that Yingli, a private company with shares traded on the New York Stock Exchange, succeeds due to government support.

“I am an entrepreneur, not a state-owned entity, so the government would not help me,” he said at a news conference. “What we compete on is our innovation and cost structure.” Yingli’s CFO, Li Zongwei, said it has yet to receive any money from the China Development Bank and will have to submit individual projects to obtain loans. Li said such projects are conducted on “commercial terms.” Other companies in Baoding say business is booming.

A wind turbine factory owned by China Guodian Corp, one of China’s biggest power generators, expects to sell 1,100 units this year, nearly double 2009’s level of 600, said the factory’s deputy general manager, Wang Hongbin.

Wang said all of his factory’s output of 1.5-megawatt turbines was sold in China, but Guodian also has announced plans to expand to the United States by supplying units for a power project in Corpus Christi, Texas.—AP

Read Full Post | Make a Comment ( None so far )

Refinery at Reko-Diq Balochistan chalks out investment plan

Posted on June 23, 2011. Filed under: Fossil fuels, Pakistan |

The Balochistan government will invest over Rs20 billion in different sectors through an Investment Board to generate resources for setting up refinery at Reko-Diq Copper-CumGold Project site.

Speaking at a post-budget briefing here on Wednesday, Provincial Finance Minister Mir Asim Kurd and Secretary Finance Dostain Jamaldini said that for the purpose an amount of Rs8.5 billion had been set aside in the next provincial budget.

They however said that a sum of Rs12 billion which was earmarked in the current fiscal year could not be invested as the governing body, which includes noted scientist Dr Samar Mubarakmand, was preparing the feasibility report for the installation of refinery.

The finance minister said that the Investment Board headed by the chief minister had already been set up to decide the utilisation of funds. Mirza Qamar Baig, a former bureaucrat, was vice-chairman of the board. Replying to a question, Kurd said that the provincial government intended to run the Reko-Diq Copper-Cum-Gold Project. However, he said, no decision has so far been taken about giving mining licence to any company. “We will take final decision about awarding mining rights according to the Mines Act,” he informed. He also said that the provincial government wanted to purchase 25 per cent shares of Pakistan Petroleum Limited.

“The Investment Board would also consider other sectors for the investment to generate resources for establishing the proposed refinery,” Secretary Finance Dostain Jamaldini told a questioner.

Mr Kurd said that the feasibility report of Reko-Diq project had been finalised. “We have allocated Rs8.5 billion in the next fiscal year budget on the recommendation of the Dr Samar,” he disclosed.

He said that with functioning of the proposed refinery, the Balochistan government would be earning Rs58 billion in annual incomes and it was the main reason that no mining licence to any foreign company had been issued.

The finance minister said that the Balochistan government would sign an agreement for exploring and mining at Saindak Copper and Gold project with any investor on the condition of 50 per cent share in the total income.

Referring to the Public Sector Development Programme (PSDP) for the year 2011-12, he said that it was up 9 per cent of the current year’s PSDP that was Rs26.75 billion. He said that provincial government succeeded through its measures to overcome the deficit of around Rs7 billion projected in the current year’s budget.

“We have curtailed our nondevelopment expenditures and generated resources to provide maximum funds for the PSDP,” Mr Kurd said.

He did not agree with a questioner that non-development expenditures were increased manifold and said that there was around 6-34 per cent increase due to the decision of increasing salaries and pensions of the government employees.

Subsidy on agriculture tube-wells was also increased from Rs2 billion to Rs3 billion annually.

Responding to a question, the finance minister said that the federal government had committed to provide Rs7 billion for improving law and order situation in the province but it did not fulfil its promise.

“The federal government has again promised that it will give Rs2 billion in 2011-12 for improving the security situation,” he added.

Mr Jamaldini said that the provincial government would achieve its revenue collection target set for the financial year 2011-12.

“The province could enhance its revenue and income only from mining, fisheries, livestock and agriculture sectors,” he added.

We are far behind from other three provinces in collection of revenue including General Sales Tax (GST), Capital Gain Tax (CGT) and Property Tax, however, we are raising adequate amount from motor vehicle tax and stamp duty,” Jamaldini said.

Replying to a question, the finance minister said that the allocation for the law and order had been reduced. Last year government had earmarked Rs12.5 billion for this purpose while in the 2011-12 budget allocation for law and order would be Rs11.5 billion.

He said that 90 per cent funds of the Public Sector Development Programme for the current fiscal year had been utilised.

Read Full Post | Make a Comment ( None so far )

FFC signs closing documents for wind power project

Posted on June 23, 2011. Filed under: Alternative, Pakistan, Wind |

With the signing of closing documents for the 49.5MW wind power project of Fauji Fertiliser Company in the Gharo-Ketibandar Wind Corridor here on Wednesday, the country is now entering into the era of generating electricity from renewable energy.

The project will be constructed and commissioned within 16 months with an expected cost of $133.5 million, financed by FFC and leading local banks. The wind power generation will help reduce the carbon footprint in the country and improve the national as well as global environment in addition to its economical benefits.

AEDB Chief Executive Officer Arif Allauddin and FFC Managing Director LtGeneral (Retd) Malik Arif Hayat signed the closing document witnessed by Federal Minister for Water and Power Syed Naveed Qamar.

The minister termed the agreement as a landmark achievement in the history of wind energy sector. “With this development, the way has paved for fast development of the renewable energy sector since the whole background infrastructure like tariff, grid code, EPA and IA was in place for projects in renewable energy sector,” Qamar said.

Pakistan offers an investment-friendly and lucrative wind energy market for the investors and equipment suppliers, he added.

He said that Pakistan possesses immense wind resources, especially in the coastal areas of the country, which could not be harnessed for one or the other reasons.

The minister said that the federal government was in touch with the Sindh government for its help in allocating more land for wind project in Gharo-Ketibandar Wind Corridor.

More corridors being explored all over the country, wind masts were being installed in Balochistan and Punjab, he said.

He lauded National Electricity and Power Regulatory Authority (Nepra) for its efforts to give tariff to FFC which would act as model for other renewable energy projects especially wind power projects.

Read Full Post | Make a Comment ( None so far )

Energy crisis: some options

Posted on June 23, 2011. Filed under: Energy crisis, Pakistan |

NOT a day passes when we do not hear of serious agitation against power shutdowns in every province of the country, not to mention anything regarding the gas shortage in industries. However, nothing is being done to improve the situation.

The real problem is affording the high costs of power and since the government is unable to pay higher subsidies, how does it expect commoners to pay such steep amounts by transferring it to them.

These are not power shortages but, in fact, deliberate power cuts.

Simply put, we cannot afford to operate most of our furnace oil power plants as there is no money to pay for the fuel. It is the high cost of power production that is ‘forcing’ us to operate only 13,000 to 14,000 MW power plants when we have a capacity for 20,000 MW ones.

In the late 90s, new power plants were being ‘financially engineered’ and every time the future problem of high furnace oil costs was raised, the planners avoided providing any answers, as many people became billionaires in approving and setting up these inefficient and polluting power plants with built-in mechanisms to create the exorbitant costs of power that we have to bear today.

While we drown ourselves in the never-ending misery of high costs of power, let us see what the world is doing?

The International Energy Agency in its latest ‘Technology Roadmap’ (May 16) shows how efficient technologies can change the energy scenario substantially. Just one technology application of combined heat and power (or cogeneration) in buildings will reach about 747 GWe by 2050, about 45 times greater than today’s level which is already accepted as the norm in most European and Japanese buildings.

We have clear directives at the highest level to ensure that natural gas is only sanctioned to cogeneration systems in industries and commercial buildings. But then what good is such a directive if there are other ways to bypass it? It is worst when a ministrysponsored Building Energy Code of Pakistan totally ignores the major energy source, fuelling every sector of the economy.

The latest ‘Energy Code’ has no section on natural gas or LPG and thus has nothing to offer in terms of efficient and safe utilisation of gas in buildings. The so-called Pakistan Energy Code has been simply copied from foreign standards and since it is not normal for a building in the United States to have efficient gas-based power and central air-conditioning systems, we (slaves that we are) should also follow the same energy code! What really takes the cake is the provision of accepting inefficient absorption-type central air-conditioning plants in our latest Energy Code. Even now urgent corrective action will greatly help in avoiding unaffordable power generation with furnace oil by making available thousands of MW of low-cost power from CHP/Cogen Systems if we only provide proper incentives for industries and commercial buildings.

Are we up to this challenge for the sake of the country’s future?

AAZA Karachi

Read Full Post | Make a Comment ( None so far )

Wapda seeks 120pc hike in power tariff

Posted on June 23, 2011. Filed under: Pakistan, Tariff, Wapda / KESC |

ISLAMABAD, June 22: The Water and Power Development Authority (Wapda) has sought an increase of 120 per cent in its tariff for hydel power from less than Rs6 per unit at present to Rs13 from July 1 this year.

The unusually high tariff increase has been sought mainly because of induction of a small power plant — 72MW Khan Khwar Hydropower Project (KKHP) — into the system but this would have its effect on the overall cost of about 6,500MW hydropower generation by Wapda.

In its tariff petition filed before the National Electric Power Regulatory Authority (Nepra), Wapda had solicited an increase of Rs7.10 per unit in variable energy cost from existing Rs5.90 per unit to Rs13 per unit.

It has sought a raise in fixed charges from Rs414 per kilowatt per month to Rs939 per kilowatt per month, up by 127 per cent.

Wapda Hydroelectric is currently operating 13 hydropower stations having installed capacity of 6,444MW. With the commissioning of 72MW KKHP in December 2010, the installed capacity has increased to 6,516MW.

On the basis of audited financial accounts for financial year 2009-10 and projected change in revenue requirement for fiscal year 2011-12, the regulator asset base of Wapda has increased from Rs143 billion to Rs214 billion due to additional capital investments on the ongoing projects.

The Wapda’s operation and maintenance cost has also increased from Rs4 billion to Rs10.63 billion, up by 166 per cent, because of repeated increases in pay and allowances and higher maintenance costs. In addition, the overall weighted average cost of capital has also increased from 13.7 per cent to 15.1 per cent owing to increase in the cost of debt.

On top of that, the depreciation cost of operating assets also increased from Rs5.4 billion to Rs6.9 billion due to addition in operating assets. The water use charges of Wapda have also increased slightly form Rs720 million in 2009-10 to Rs836 million on account of higher generation at Mangla power station.

On the other hand, income from other activities like fisheries and boating etc has dropped from Rs2.1 billion two years ago to Rs825 million.

Wapda said that its revenue gap stood at about Rs12 billion in 2009-10 and Rs12.35 billion in 2010-11 whose determination and notification was delayed.

The proposed tariff increase has been estimated on the basis of net electricity output of 30,783 Gwh that accounts for about one-fourth of the entire annual power output, including generation from all other sources.

Read Full Post | Make a Comment ( None so far )

Power riots spread after consumers receive ‘inflated’ bills

Posted on June 22, 2011. Filed under: Energy crisis, Pakistan, Tariff, Wapda / KESC |

KARACHI, June 21: While many city areas continued to remain without electricity for most part of the day, residents and traders staged demonstrations to protest against the Karachi Electric Supply Company after they received “inflated” bills on Tuesday.

Power riots spread to Jodia Bazaar, Old Golimar, Gadap, North Karachi, Korangi, Landhi, Lyari and other localities, where people blocked roads by setting tyres on fire. Contingents of police and Rangers were called in to control the crowds at some places. Street protests against frequent power breakdowns have also been planned for Friday.

Amid the demonstrations, many influential segments of society have started appealing to the people not to pay their monthly power utility bills and to resist the power utility if it launched a disconnection drive.

Several protesters complained that they had been suffering up to 14 hours of loadshedding daily and yet they received bills with power dues twice the amount they had paid last month.

Some of them said the KESC sent inflated bills without meter reading and that the management should stop blaming workers for its poor service.

People staged a protest demonstration against power outages in Jodia Bazaar and shouted slogans against the KESC management. They lit a bonfire and smashed everything inside it with great ferocity. Traders and residents of the Bolton Market and Napier Road areas also staged protests. Residents of Old Golimar and adjoining areas were equally enraged. They blocked traffic by setting fire to old tyres.

A resident of North Karachi’s Sector 7D3 was among the thousands of KESC consumers who had received inflated electricity bills on June 20. He claimed that electricity charges for one month to be paid by June 25 were three times that of the pre vious bill. “The June 2011 bill, with normal charging mode status, carrying a meter reading of 28952 as of June 1 requires me to pay Rs5,700 for consuming 557 units,” he said. In fact, the meter reading on June 21 was 28771, he added.

A visit to the recently relocated billing office of KESC North Karachi Zone on Tuesday was not productive. Half of the staff was standing outside and the rest was showing least interest in helping the consumers who had gathered there to get their bills corrected.

No senior official was sitting at the office and some officials were discouraging the visitors, saying that bill correction was not possible. The officials were quoted as saying that people should better pay the bills as Nepra had allowed 79 paisa fuel adjustment for the months of April and May and its impact would be shown in the next bill.

Online bills While the power crisis deepened with prolonged outages and unattended faults blamed by the KESC management on workers’ protest, monthly bills remained undelivered in many areas.

In this situation, the KESC management advised people who had not received monthly electricity bills around their usual time to use alternative online arrangements for payment of bills.

The KESC spokesperson said that it had introduced five easy methods for the convenience of customers besides the normal way of using printed bills. First, people could visit the utility’s official website and enter the 13-digit account number to retrieve duplicate copies of the current electricity bills, which could be printed and presented at all banks for making payment. Secondly, people could go to the offices of Nadra, NIB Bank branches, Easy Paisa outlets, UBL Omni Banking and 1Link ATMs, and present the 13-digit account number. These outlets would retrieve bill details and provide a payment receipt of the bill to the customer. Thirdly, the customers who did not receive their monthly bills, could phone the KESC call centre 118 and follow the automated system to retrieve a duplicate copy of the bill. Fourthly, people could email 13-digit account number to receive an online copy of their bill, which could be used for payment. Fifthly, people familiar with online payment could use their existing online banking services as most banks provided the facility for payment of utility bills.

Workers The protesting labour union of the KESC rejected the alternative ‘facility’ for bills payment and said the management did not assure people of enhanced power supply. The labour union asked the government and the National Electric Power Regulatory Authority to take notice of the KESC management’s high-handedness and complete apathy towards people’s problems and needs.

A few consumers whom Dawn spoke to were furious at the management’s measures saying that their major concern was resumption of normal power supply.

They said the KESC had not been recording the actual meter reading while with this move the power utility had attempted to absolve itself of delivering the bills on time.

Protest call The Jamaat-i-Islami Karachi chapter has announced that June 24 would be observed as a protest day against the increasing hours of power loadshedding and tariff hike.

A party’s handout said that power outages had affected the commercial and industrial businesses. The demonstrations would be staged on roads and at roundabouts. The main protest would be staged at Lasbela Chowk, the handout stated.

Read Full Post | Make a Comment ( None so far )

Four IPPs withdraw final notices on payment of Rs. 5 billion

Posted on June 22, 2011. Filed under: Energy crisis, Finance, IPPs, Pakistan, PEPCO |

ISLAMABAD, June 21: Four independent power producers (IPPs) decided on Tuesday to withdraw their final notices seeking encashment of sovereign guarantees after they were paid Rs5 billion and assured that the remaining dues will be cleared before June 30.

An agreement to that effect was reached after negotiations between Water and Power Minister Syed Naveed Qamar and a delegation of IPPs, led by Mian Mohammad Mansha and Yousaf H. Shirazi.

The IPPs — Nishat Power and Nishat Chunian of Mian Mansha, Atlas Power of Yousaf Shirazi and Liberty Tech — with a combined capacity of 880MW had issued the final notice on June 15 to call sovereign guarantees and stop production because of non-payment of dues against electricity they had supplied to Pakistan Electric Power Company (Pepco).

According to sources, the IPPs initially took a strong position not to withdraw the notices till the clearance of full payment, but agreed to oblige on upfront payment of Rs5 billion and commitment for the release of Rs3.25 billion before June 30.

The IPPs were told that their claim of about Rs10 billion also involved about Rs2 billion still-tobecome-overdue bills under contractual obligations.

The sources said the crisis had been averted after Prime Minister Yousuf Raza Gilani approved last week a power ministry’s summary seeking payment of Rs11 billion for the IPPs. The remaining amount of Rs2.75 billion will be paid to some other distressed IPPs.

An official was of the opinion that the notices had automatically become ‘infructuous’ after the partial payment of dues. But an IPP representative said that was not the case, adding that the IPPs would have to write formal letters to banks informing them about their decision not to go ahead with encashment. Otherwise, he added, the banks were bound under the law to pay the quoted amount on behalf of the government on June 23. He said withdrawal letters would reach the banks on Wednesday.

On Saturday, the power ministry wrote a letter to the prime minister and requested him to personally intervene for releasing Rs11 billion urgently to contain the crisis and avoid international embarrassment. Till May 15, the government owed about Rs122 billion to all IPPs.

Under its sovereign commitment, the government is bound to make payments to IPPs if their power purchaser, Pepco/Wapda, fails to clear dues. The failure to make payments by the government after a 30-day notice is technically considered as ‘sovereign default’ which leads to negative ramifications for the country’s credit ratings and interest costs.

The IPPs served the first 30-day notice on the government on May 13 to start the process of calling sovereign guarantee for recovering their combined power dues of Rs16.5 billion. In response to the notice, the NTDC/Pepco released about Rs6 billion, but delayed payment of the remaining amount because of financial problems.

Despite an estimated payment of about Rs296 billion in subsidy to Wapda/Pepco during the current financial year against a budgetary allocation of Rs84 billion, the entire power sector, including private companies, was facing serious financial problems because of continuous increase in outstanding dues, resulting in lower than required fuel purchases and compounding electricity shortfall.

The government has picked up more than Rs300 billion arrears from power companies’ balance sheets and parked the amount into a newly-created Power Holding Company and raised almost an equivalent amount from banks to improve the power sector’s cash flows.

The government paid Rs40 billion alone as interest against these loans out of the federal budget and the amount is expected to reach Rs56 billion during the next financial year.

Read Full Post | Make a Comment ( None so far )

Byco Petroleum to convert loans into equity

Posted on June 22, 2011. Filed under: Corporate, Pakistan |

KARACHI, June 21: Byco Petroleum Pakistan Limited (BPPL)–the stock market listed company– announced on Tuesday the intention of the board of directors to re-organise loans and capital structure of the company.

The essence of it all appears to be to pass on the Byco loans to another associated company and in turn issue that company the majority equity in Byco. After all is down; Byco Oil Company Limited (BOPL) would go on to hold 851 million shares in Byco, representing 87 per cent of the listed company’s shareholding.

Byco would thus be able to kick off the huge loans and mark-up that spoils its balance sheet. The company announcement on Tuesday unveiled salient features of the intended clean-up of financial statements. It said that Byco Oil Company Limited (BOPL) — an unlisted public company, incorporated in Pakistan and wholly owned subsidiary of Byco Industries Limited (BII) would become the major shareholder of Byco, instead of BII, which is incorporated under the laws of Mauritius and which currently owns approximately 67.52 per cent shares of Byco.

Secondly, various intercompany loans given to Byco would be converted into equity of the company. The process would be achieved through the following steps: One that the various associated company loans (local and foreign) availed by Byco would be converted such that BOPL replaces Byco as borrower; secondly, in consideration for the novation (meaning: substitution of new contract in place of old one) of loans, BOPL (as lender) and Byco (as borrower) would, on a back to back basis, enter into a corresponding rupee loan agreement in terms of which Byco would owe BOPL such rupee equivalent amounts which prior to the novation of loans were owned by Byco to its inter company lender, and finally, the payment obligations under the BOPL-Byco loan agreement and another rupee loan agreement of a similar nature already entered into by BOPL and Byco, would be satisfied by Byco through conversion of loan (including accrued mark-up thereon) into equity by issuing 586 million new shares without a rights offering to BOPL.

The novation of the aforesaid associated company loans and the issue of ordinary shares at par value of Rs10, by Byco without a rights issue pursuant to the first proviso to Sub-section 1 of Section 86 of the Companies Ordinance, 1984, have been approved by Byco’s Board of Directors and shareholders at their meetings on December 7 and 31, 2010, respectively.

The announcement by the listed company Byco said that upon completion of the three steps notified above, BOPL would go on to hold 851 million shares of Byco translating into 87 per cent shares of the listed company.

“Byco has already sought consent of its board of directors, shareholders, SBP, CCP and SECP for the proposed novation and conversion of loans into equity”, the company concluded.

Read Full Post | Make a Comment ( None so far )

NEPRA: Hearing on fuel charges adjustment – May 11

Posted on June 22, 2011. Filed under: DISCOs, Pakistan, Tariff, Wapda / KESC |

Read Full Post | Make a Comment ( None so far )

Cut your electricity bill upto 30%

Posted on June 21, 2011. Filed under: Energy crisis, Pakistan |

Read Full Post | Make a Comment ( None so far )

« Previous Entries
  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 2 other followers

  • EnergyPakistan had

    • 767 hits

Liked it here?
Why not try sites on the blogroll...