[ I n detail Energy ]
[ powering pakistan  ]
Powering Pakistan
T e x t: S a j i d S h a i k h | p h o t o s : W ä rts i l ä
Energy is crucial to a nation’s economy as it is the engine that
drives industrial growth. In Pakistan, energy will play a central role
in the nation’s progress and development into a important player
in the world economy.
W
ärtsilä, a crucial partner and key player in Pakistan’s
power generation sector since 1994, is assisting
the country on this journey. Wärtsilä has earned
the reputation of being a strong and reliable brand.
“Wärtsilä offers and delivers a one-stop service. We install,
operate and manage power plants. We have been in Pakistan for
23 years and can claim unique expertise,” says Lars-Åke Kjell,
Business Development Manager, Wärtsilä Power Plants.
IPPs a success
Pakistan’s total installed electricity-generation capacity
totals some 19,478 MW, of which 30% is produced by
Independent Power Producers (IPPs). When Pakistan
achieved independence in 1947, power generation facilities
were scattered around the country. In the 1950s, a national
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utility company was formed with a monopoly in power Power plants
generation, transmission and distribution. Demand employing combined-
outstripped supply and it became an economic imperative cycle technology
optimize, reuse and
to involve the private sector in power generation. In 1994,
recover energy and
the government introduced a private power policy. heat that would
The result was that 14 projects - IPPs - with a total otherwise be simply
capacity of 3787 MW were initiated. Of these 14, five were thrown away.
implemented using reciprocating generating sets running
on heavy fuel oil (HFO). Wärtsilä was chosen as the EPC
(engineering, procurement and construction) contractor by
Kohinoor Energy Ltd (126 MW), Gul Ahmed Energy Ltd.
(135 MW) and Tapal Energy Ltd (120 MW).
“Wärtsilä delivered equipment to three of the 14 IPPs. All
three are success stories and have paid rich dividends to all the
stakeholders. Wärtsilä has also delivered the equipment for
03.2007.
private captive power plant projects in the cement,
paper and textile industries,” says Rolf Andersson,
Managing Director of Wärtsilä Pakistan.
Combined-cycle power plants
Since 1997, however, no new IPPs have been
established. In 2002, the Pakistan government
announced a new private power policy to
encourage the establishment of more IPPs and
promote projects exploiting indigenous resources
such as natural gas, hydropower and coal. As oil
imports were draining foreign exchange reserves,
the government withdrew incentives for oil-based
projects. Geological surveys revealed that the
country’s natural gas reserves would be unable to
guarantee a supply of fuel for 25 years. The need
for a back up solution became acute.
Wärtsilä proposed a solution. Its top-notch
product concept – combined-cycle power plants –
offered Pakistan savings totalling billions of dollars
by reducing the country’s reliance on imported oil
while at the same time being more environmentally
friendly. Combined-cycle technology optimizes,
reuses and recovers energy and heat that would
otherwise be simply thrown away. This is the
key feature that makes the combined-concept
more attractive to both power producers and the
government.
“Combined cycle installations are fuel efficient
and therefore the most preferred technology. A
combined-cycle power plant can be designed using
various technologies. But basically it has one or
several prime movers combined with one or more
steam-turbine generators,” says Kjell.
Gas turbines, reciprocating engines or boilers
can be chosen as prime movers. Based on the
conditions prevailing in Pakistan, Wärtsilä has
developed a combined-cycle concept that uses
its diesel (Wärtsilä 46) and gas engines (Wärtsilä
50DF).
The most competitive solution
Diesel combined-cycle plants have been successfully
introduced and accepted by investors as an efficient
solution for electricity production. “Kohinoor
Energy Ltd, one of the IPPs established under
the 1994 policy, has a combined-cycle installation
supplied by Wärtsilä. The results achieved during
their 10 years of operation are excellent and they
are considering expanding their facility,” says
Andersson.
“WE ALSO WANTED
THE HIGHEST
POSSIBLE POWER
PLANT EFFICIENCY
DURING A
LIFECYCLE
OF 25 YEARS.”
With the current situation regarding availability
of gas and liquid fuel, Wärtsilä’s HFO-operated
engines are the most competitive solution. “We
are the preferred brand and will be able to achieve
a high market share in both the IPP and captive
power markets. We can deliver two to three 200
MW power plant projects per year for the IPP
market.” says Kjell.
New combined-cycle plant ordered
In June 2007, Wärtsilä received an order to supply
and install a 160 MW power plant at the Attock
Refinery Ltd site near Rawalpindi. This order
includes nine Wärtsilä 18V46 generating sets with
heat recovery boilers, one 11.6 MWe steam turbine
[ I n detail Energy ]
plant and a 132 kV switchyard. The plant will run
on HFO and will be connected to the national
grid. With the combined-cycle configuration at
100% load, a net electrical efficiency of 45% can
be achieved. Commercial operation is expected
to begin in the third quarter of 2008.
Commenting on the order, Adil Khattak, CEO
of Attock Gen Ltd, said “This new power plant
will enable smooth refinery operations as sales of
HFO will be assured. It will provide relief to the
common man and boost the economy of energy-
starved Pakistan. We also wanted the highest
possible power plant efficiency during a lifecycle
of 25 years, which we believe Wärtsilä’s combined-
cycle concept will be able to provide.”
With this latest order, Wärtsilä will have supplied
Pakistan with power plants producing more
than 1000 MW of electricity. “Our strong local
presence and successful track record in Pakistan
combined with efficiency and flexibility offered
by our solution were among the reasons we were
awarded this contract,” said Christoph Vitzthum,
Group Vice President, Wärtsilä Power Plants.
Future growth
In economic terms, Pakistan is well positioned
with industrial growth firing on all cylinders.
The success of the new privatization programme
has raised funds totalling more than EUR 700
million. But the surge in economic activity has
also fuelled increased demand for energy, raising
fears of a shortfall. By 2010, according to Pakistan’s
federal ministry of power and water, demand
for electricity is expected to exceed supply by
approximately 5500 MW.
Earlier this year, the World Bank agreed to
increase its annual lending to Pakistan to EUR 2.15
billion for the next three years. Recent information
obtained from government sources indicates
that on top of its existing lending agreements,
the World Bank has agreed to provide EUR 287
million for power projects in Pakistan.
With its strong presence in Pakistan and wide
experience of the sector, Wärtsilä can be expected
to play an important role in this emerging and
optimistic scenario. “The biggest growth over the
next 5-7 years will be in the private power sector,”
says Andersson. “I see this as a real opportunity,
and Wärtsilä could easily deliver some 2000 MW
of generating capacity to Pakistan over that period.
There will also be growth of 70–100 MW per year
in the captive power segment.”
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