IGCEP 2021-30: Nepra refuses to include Punjab’s two hydropower projects

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has refused to include two hydropower projects of Punjab in Indicative Generation Capacity Expansion Plan (IGCEP) 2021-30, saying that PLEXOS did not optimize the projects to be considered as candidate projects due to demand requirements, higher project cost and other relevant parameters. The regulator conveyed these views in a letter of Punjab Power Development Board (PPDB).

The Nepra said that its letter is a continuation of the PPDB letter of January 10, 2022 wherein the rejection of application of Generation Licences for two projects, ie, (i) CJ Hydropower Project (25 MW); and (ii) Khanewal Hydropower Project (1.0 MW); has been contested.

Further, Nepra has also elaborated that in order to have LoS, it is essential that these projects have generation licences and tariff and therefore, the Authority may consider its decision of rejection of applications for Generation Licence.

In this regard, the regular has informed that in terms of Section-14 (A) of the NEPRA Act, the Federal Government with the approval of Council of Common Interests (CCI) has formulated National Electricity Policy 2021 and Authority is obligated to perform its functions under it.

According to the Section-5.1 of said Policy, all the future expansion in generation capacity is to be based only on competitive and least cost basis. In this regard, Section-5.8 of the Policy envisages that such capacity is to be inducted on the basis of IGCEP prepared by relevant entity.

According to Nepra, both of the projects were considered as a candidate project in the iteration of IGCEP (2021-30), however, the relevant software i.e. PLEXOS did not optimize the projects to be considered as candidate projects due to demand requirements, higher project cost and other relevant parameters.

The regulator is of the view that inclusion of the future projects will only depend on least cost criteria without any exception.

Once included in the IGCEP based on the approved parameters, these projects can approach the Authority for the grant of generation licence and determination of tariff.

Earlier, Punjab Power Development Board, in its letter said that it is facilitating development of 18 Small Hydropower Projects (SHPP) in IPP mode, with total capacity of 265 MW, which are at different stages of development. This includes 135 MW Taunsa Hydropower Project on Taunsa Barrage, District Muzaffargarh, under the Nepra Competitive Bidding Tariff Regulations, 2017.

PPDB said that recently, Nepra has returned applications for Generation License for the following PPDB facilitated hydropower projects as these projects are not included in the list of committed projects under IGCEP: (i) CJ hydropower Project (25 MW) ;(ii) Khanewal Hydropower Project (1.0 MW). Sponsors of projects have approached PPDB to intervene in the matter through.

PPDB apprised that the projects are included in the list of candidate projects of IGCEP, 2021-30). The IGCEP was approved by Nepra in November, 2021. The IGCEP 2022-31 is under preparation at NTDC. PPDB approached NTDC Planning for consideration of PPDB facilitated hydropower projects as committed projects in this iteration.

NTDC was of the viewpoint that these projects can only be included in the list of committed projects after attaining LoS.

PPDB submitted that a project can reach LoS stage only if it has valid tariff determination and generation licence. The Board requested processing of tariff and generation license applications of all PPDB facilitated projects, including two projects, mentioned in the letter.

Copyright Business Recorder, 2022