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ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has returned 'flawed' Indicative Generation Capacity Expansion Plan (IGCEP) 2021-30 to National Transmission and Despatch Company (NTDC) with the direction to first get it cleared from the Council of Common Interests (CCI), well informed sources in NTDC told Business Recorder.

The CCI in its meeting held on June 21, 2021 had decided that the IGCEP assumptions shall be approved by the CCI. In view of this decision, the IGCEP submitted by the NTDC cannot be considered for approval of the Authority.

According to the Nepra, broadly speaking, five areas were highlighted by the various key stakeholders of the power industry including provinces during proceedings of the public hearing by the Authority on June 15, 2021.

In view of CCI's decision, Nepra has advised NTDC to present the following details before the CCI for its consideration; (i) projects having achieved financial closure or secured financing arrangements; (ii) projects already under construction; (iii) projects having PC-1 approved at relevant forum of the Federal and Provincial levels; (iv) projects having generation licence and tariff approved by the Authority and; (v) strategic projects under G2G initiatives.

After explaining the background, Nepra, has returned draft IGCEP to the NTDC with the directions to submit the revised document in the light of the assumptions as approved by the CCI for the Authority's approval within 30 days of the CCI's approval.

On June 30, 2021, Power Division held a consultative session on the draft IGCEP 2021-30 with the stakeholders' which ended in a deadlock as all provinces were of the view that projects with tariff/ generation licence should be committed. However, Secretary Energy Punjab said that the cut off date should be date of CCoE decision but other three provinces and Nepra were of the view that cut off date be October 2, 2020 (date of gazette of AER policy 2019).

Power Division has given one week's time to stakeholders for submission of their suggestion in writing aimed at making them part of the draft IGCEP.

The sources said, Power Division has tried every trick to give less importance to RE sector specially to exclude 12 wind and solar projects of 617.1MW which were last year awarded the lowest tariffs by Nepra at an average tariff of Rs5.95/kwh (US Cents 3.64/kwh).

In an April 2021 meeting of CCoE majority were in favour of letting these projects move forward, however due to the resistance of Power Division the Chairman CCoE, Asad Umar had to refer the matter of 12 RE projects to Law Ministry for their opinion on a single point: if the tariffs' that were awarded to these projects were determined before or after the enactment of the ARE 2019 policy despite the fact that the policy was approved on October 2, 2020 whereas tariffs to 12 projects were awarded in Aug 2020 or earlier.

At a recent hearing at Nepra on IGCEP 2021-2030, NTDC itself admitted that unjustified projects have been included in the IGCEP. There were serious accusations against Power Division the software PLEXO; which is used by NTDC to prepare IGCEP; designed to give best output based on grid stability, least cost etc was manually manipulated to accommodate certain projects.

The sources said, 12 wind and solar projects which qualify on the basis of least cost coupled with indigenous resource were excluded as committed projects in draft IGCEP 2021-30. However; the IGCEP in its current form was shot down by Nepra and now Council of Common Interest with provincial input will approve the assumptions based on which projects will be entered into the IGCEP. According to sources, just few days back a summary was being moved in AEDB Board meeting to amend the ARE policy 2019 to include hydro. They ARE 2019 policy includes ten different kinds of RE technologies like wind, solar, biomass, biogas, tidal etc but does not include hydro and the policy envisages increasing the share of renewable energy by 20 percent in the energy mix of Pakistan by the year 2025 and 30 percent by 2030. The share of RE in current energy mix is 4 percent and if hydro is included; then the share breaches the 30 percent target today, which implies making the ARE 2019 policy redundant and achieving 2030 targets in 2021. "The idea behind this proposal is that if targets of ARE 2019 are achieved by treating hydro as renewable energy, then there is no need for developing wind, solar etc projects until after 2030," said an insider.

Copyright Business Recorder, 2021

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