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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) Wednesday challenged the credibility of growth projections of World Bank and International Monetary Fund (IMF) as their projections for Pakistan were contrary to the actual growth during the last two financial years.

The regulator offered these comments on the authenticity of projections of both reputable international financial institutions during a public hearing on National Transmission and Despatch Company’s Indicative Generation Capacity Expansion Plan (IGCEP) 2022-31.

“The IGCEP will be revised every year. If the NTDC is projecting average growth rate of 4.3 percent for 10 years, it can be revised next year. One of my main concerns was that two years before World Bank and the International Monetary Fund (IMF) had projected Pakistan’s GDP growth of just 1 percent but we actually achieved 5.9 percent in that year 6 percent next year. There were many other things in it including industrial support package, diversions of Indian and Bangladesh orders towards Pakistan during Covid-19 period due to which textile industry which was shut down restarted with three shifts and LSM growth was 17 per cent.

However, this recent example indicates that growth projections of IMF and World Bank are not trustworthy,” commented Chairman NEPRA, Tauseef. H. Farooqi while presiding over a public hearing on IGCEP.

Member Sindh, Rafique Ahmad Shaikh also raised eyebrows on NTDC decision to use World Bank projections instead of official figures of GoP.

KE consumers: Rs8.37bn refund approved by Nepra

A brief discussion was also witnessed on the reasons of not using data of federal government for preparation of the IGCEP. The NTDC officials informed that Finance Division and Pakistan Bureau of Statistics (PBS) refused to share any document related to growth projections for the next few years whereas Ministry of Planning, Development and Special Initiatives did not respond to its letter. Chairman Nepra announced to probe the claim of NTDC with respect to non-provision of data by Finance Division and PBS.

Chairman Nepra also grilled NTDC team headed Ali Zain Banatwala for submitting IGCEP 2022-31 after lapse of six months, cautioning that if such practices will be exercised next year, the regulator will impose penalty on the NTDC.

NTDC team shared details of its projections made part of the IGCEP along with justifications of not including 48 projects of over 7000 MW from the plan, committed projects, criteria of accepting projects and candidate projects.

The revised IGCEP has been prepared on containing the base case along with the following six additional scenarios i.e. high demand, low demand, Diamer Bhasha HPP in 2029, Chashma Nuclear(C-5) for energy security, local coal inclusion in 2027 and 2030 and unconstrained Variable Renewable Energy (VRE). Three scenarios of long-term forecast, as per prevailing Grid Code, are prepared for the Low, Normal and High GDP growth of 3.40%, 4.30% and 5.42% respectively.

In the base case, the demand and installed capacity of the whole country is 41,338 MW and 69,372 MW, respectively by the year 2031. During the hearing which continued for four hours, different stakeholders, ie, KP government, Balochistan government, Punjab government, representatives of AJ&K, Ministry of Planning, AEDB, K-Electric and private sector offered their comments on projections of IGCEP and also their individual issues. Provincial Governments including Balochistan raised objections on the plan. The Chairman NEPRA advised the representative of Balochistan Government to sensitize Balochistan’s politicians on this issue.

The draft plan submitted by NTDC to the NEPRA, has been prepared only as an indicative development plan for the period commencing on FY 2022 to FY 2031 as it does not contain or determine targets or ascertain liabilities pertaining to power purchase or procurement, commissioning of future power projects, regulation or determination of electricity tariff, performance or ascertainment of economic dispatch etc. and is merely a suggested guide subject to finalization as per approval of the competent authority according to applicable law, policy and procedure.

The IGCEP 2022-31 includes an export of 1,100 MW from NTDC system to K-Electric up to June 2024, which is further increased to 2,050 MW after commissioning of 500 kV KANUPP Karachi Interconnection (KKI) grid station by K-Electric. Two power projects will also be retired during this period.

It was noted that total capacity of renewable energy projects will be increased to 20,000 MW from 12,000 MW to be installed on the basis of least cost.

The Authority used sarcasm against NTDC for including RE projects on the pressure of federal government as previously the Organization was ready to do it on the plea that it does not have infrastructure to accommodate more RE projects.

The representative of AEDB proposed that NTDC should also allocate some capacity for new technologies, which was also supported by a representative of Punjab Government.

KE team raised the issue of its RLNG-fired power plant which has not been taken as take or pay project.

One of the participants criticized NEPRA for not holding NTDC responsible of financial loss for deviation from actual plan. Nepra switched off his connection after criticism.

Responding to him, Chairman Nepra said that his Organisation has done its best for the country, adding that future cannot be predicted.

One of the participants argued that hydel projects should be given more consideration as compared to other projects. However, Chairman Nepra disliked his proposal saying that “everyone here seeks special consideration. We don’t want to give consideration to Pakistan over any one. This can’t be done.

The purpose of IGCEP is that all projects should be established on merit. If we have to do optimization on the pressure of different groups, then it will be a subsidy. We want do away with the culture. The current position of Pakistan is because of “hard work” by us. We have to ensure that neither NTDC should annoy you nor Nepra but everything on merit will be ensured”.

A representative from the business community from Karachi Tanveer Barry suggested that all inefficient power plants and those who have completed their life should be shut down. NTDC should enhance quota of KE to 2200 MW from 1100 MW as the KE’s generation is expensive.

The KE will add RLNG power plant of 1320 MW. Thar coal has emerged as a cheap and reliable source and its tariff after accounting for inflation is less than Rs 12/unit as compared to twice this figure for imported coal plants. Member Power, PAEC suggested that Chashma-V should be considered as committed project instead of candidate project as China is ready to extend financing at 3 per cent. NTDC argued that it’s the decision of CCI which the Organization cannot change. Chairman Nepra queried how CCI can take such a decision.

Wrapping up discussion, the Nepra urged all the participants to also send their comments in writing within seven days.

Copyright Business Recorder, 2022

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