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Energy efficiency audit of fertiliser units likely




  • The federal government is gearing up to start energy efficiency audit of fertiliser sector which is operating at 32-35 percent as compared to international benchmark of 60-65 percent level, well-informed sources in Ministry of Industries and Production told Business Recorder

    Fertiliser sector, however, maintains that the energy audit should be carried out across sectors, ie, Captive Power Plants (CPPs), cement and public sector power Generation Companies (Gencos) and subsequently gas should be allocated to the most efficient sector. 

    National Productivity Organisation (NPO), an arm of the Ministry of Industries and Production, in a recent communication to the Secretary Industries Shafqat Naghmi has stated that there is also wastage of electricity, gas and water, etc, in the industrial sector and it is clear that these resources are not being often used efficiently. Nine out of 10 fertiliser plants in the country are operating at a productivity level of 32-35 per cent and provided subsidised gas. This certainly raises a demand for performance based audit of these companies, to save wastage of natural gas that is used as a raw material by them. But these plants also often cannot operate at the maximum capacity because of shortage of gas. 

    The sources said ECC had approved that efficiency audit of all fertiliser plants be carried out by Oil and Gas Regulatory Authority (Ogra) and gas utility companies based on which available gas be supplied to efficient plants to fetch maximum benefits/outputs. ECC also decided that modalities should be worked out by the Ministry of Petroleum and Natural Resources in consultation with the Ministry of Industries and other relevant stakeholders. 

    National Productivity Organisation- an attached department of Ministry of Industries and Production, made a presentation regarding energy efficiency audits of fertiliser plants at second meeting on ECC decision January 19, 2012. Ministry of Petroleum and Natural Resources held a couple of meetings on this issue with the stakeholders but the powerful fertiliser sector successfully blocked further proceedings. 

    SNGPL argues that it does not have any expertise to conduct the energy efficiency audit of fertiliser plans as this is a very specialized job, therefore, the services of experts must be hired to carry out the energy efficiency audit of fertiliser plants. As per licence issued by Ogra to SNGPL, its role is limited to give advice and educate the consumers regarding efficiency. 

    The sources said, NPO have carried out the efficiency audit in the textile and steel industries funded by the GoP and they can be requested to carry out the audit of fertiliser plants as well. Petroleum Ministry argues that audit of fertiliser will be different and NPO may not have the capability/expertise. Efficiency audit report would contain information on existing efficiency of fertiliser plants and measures to improve the same in terms of per unit of gas consumed to see value addition in its utilisation. 

    NPO on the other hand explained their capability to carry out the efficiency audit of textile/steel sector and are keen to carry out the proposed audit of fertiliser plants. 

    Petroleum Ministry and Director General (Gas) maintain that in the first stage the existing efficiency of fertiliser plants and measures to improve it need to be worked out and modalities of enforcement may be worked out at a later stage by Ministry of Industries. In this regard Industries Ministry can set a priority order of fertiliser plants based on efficiency of gas supply in the event of shortfall. NPO claims that they have pre-qualified independent audit expert who have already carried out audit of 120 textile and 20 steel mills and are quite capable of carrying out audit of fertiliser industry provided that cost of the audit ie Rs 10 million is paid to them. 

    Fertiliser industry argues that due to present energy crisis it is not getting gas as per its requirement, therefore, the decision may be kept in abeyance till sufficient gas is available. The industry also argues that to carry out its audit gas should be provided to meet 100 percent of the requirement of each plant for a minimum period of 15 days to fetch the desired results. 

    Fertiliser sector is not opposed to the government””s energy efficiency audit initiative but complains that all sectors that use gas must be treated at par. “We are not against energy efficiency audit of fertiliser sector but why is it not being extended to relatively more inefficient Gencos, CPPs and cement sector,” said one representative of fertiliser sector. 

    He further argued that the audit of fertiliser should not be carried by those experts who conducted the audit of textile sector as most sectors operate on different technologies. Another major hurdle in audit is “who will bear the cost of the audit.” The government wants the fertiliser sector to pay Rs 10 million for this purpose whereas the latter argues that since the government has planned the audit, hence cost should be borne by the government and not the fertiliser industry. 

    Copyright Business Recorder, 2013

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