HUBCO likely to carve out two units from PPA

Mushtaq Ghumman/Business Recorder/13-01-2020

ISLAMABAD: M/s Hub Power Company (Hubco) is likely to carve out two units of the Hub plant from the Power Purchase Agreement (PPA) and novate them to Karachi Electric (KE), well-informed sources told Business Recorder. M/s Hubco has written a letter to CPPA-G regarding conversion of twoResidual Fuel Oil (RFO) based units of Hub plant to coal. The power company approached K-Electric for the off-take of power from the converted units as a result KE would be able to replace its inefficient capacity with much more economical power supply from Hubco. The sources said National Electric Power Regulatory Authority (Nepra) and CPPA-G, a subsidiary of Power Division are looking into the offer of Hubco to KE. The coal conversion of two units of Hubco (2×323 MW) would be running for 8 months in non-winter months, with total tariff including incremental EPP and CPP of approximately $ 6 cents per unit, displacing the engine based RFO IPPs (Narowal, Atlas, Liberty, Nishat etc) with an EPP of approximately 9 cents per unit, resulting in annual savings ofapproximately Rs 14 billion for GoP. The total CPP of the converted units for remaining four months would be around Rs 4 billion which would result in estimated net annual savings of Rs 10 billion for GoP. M/s Hubco had also submitted a plan to the government to convert furnace oil-fired plant into a coal-fired power plant prior to expiry of Power Purchase Agreement (PPA) in 2027. Hub Power Plant is an RFO-fired thermal power plant, situated at Hubco in Balochistan. The plant was built in 1997 with a PowerPurchase Agreement (PPA) of 30 years and supplies 1200MW (net) electricity to the national grid