The "Diesel Electricity" disaster... generating 500 megawatts with $1.2 billion annually

English - الثلاثاء 28 يونيو 2022 الساعة 05:39 م
Aden, NewsYemen, special:

 By the summer of each year, the people of the liberated areas, especially in the capital, Aden, continue to suffer from the continuing electricity crisis and the deficit caused by the low volume of generation compared to the growing need year after year.

Over the past few days, the capital, Aden, witnessed angry popular protests against the fuel crisis and the deterioration of services, especially electricity.  The head of the Presidential Leadership Council, Rashad Al-Alimi, responded with a request to give him more time to resolve the crises.

Subsequently, local media circulated a statement by an official source at the Ministry of Electricity and Energy, in which he revealed that the value of fuel consumption by power plants in the liberated areas amounts to more than $100 million per month.

The source explained that since the end of the Saudi oil derivatives grant (last month) and until today, 74,000 tons of diesel have been purchased, including 60,000 tons for the governorates of Aden, Lahj, Abyan and Shabwa, 10,000 tons for Hadramout Governorate and 4,000 tons for Al-Mahra Governorate, at an amount of approximately $100 million with government funding.

 The source complained that what is collected from consumers for the account of the General Electricity Corporation does not exceed three and a half million dollars per month, and that the state bears the rest of the cost, equivalent to 97 million dollars per month for fuel.

 The statement of the source in the ministry was considered by specialists as a major disaster and a crime of tampering with public money by successive legitimate governments, by paying $100 million per month for fuel for power plants in the liberated areas, while the production volume of these plants does not exceed 500 megawatts.

They pointed out that the large amount of this amount is due to the fact that most of these stations operate on diesel and mazut fuels, which are the most expensive financial ones, and the largest percentage of them are purchased power stations that were contracted by the government instead of working on establishing government stations that run on less expensive fuels such as natural gas.

They added that the cost of producing one kilowatt using diesel fuel ranges between 200-250 riyals, compared to the cost of generation with gas fuel, which ranges between 50-70 riyals only, taking into account the possibility of supplying power stations with gas fuel locally without the need to import it, as is the case with diesel fuel.  

The specialists pointed out that the source’s statement on behalf of the Ministry of Electricity indicates that the cost of fuel for the power stations, which will be borne by the public treasury in the event that the Saudi grant is not renewed, will reach $1.2 billion during one year, while the source acknowledges in the same statement that the appropriate solutions and treatments to get out of the crisis  The current needs support and investments of about one and a half billion dollars.

According to specialists, the cost of fuel for a year - based on the source's statement - exceeds the cost of the project to establish a strategic gas power station that will permanently solve the electricity crisis in the liberated areas, as is the case of the "Fujairah F3" gas station, which the UAE is currently constructing with a capacity of 2,400 megawatts and at a cost of 1,200 MW.  Only 1 billion dollars.