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ISLAMABAD: Ministry of Planning, Development and Special Initiatives (MPD&SI) has proposed several changes in draft National Electricity Policy (NEP) 2023-27, raising questions on the linkages of plan that should have been based on ground realities and issues being faced by the power sector, well informed sources told Business Recorder.

The MPD&SI has also shown serious concerns with respect to the Power Division for not making its recommendations part of the policy presented before the Cabinet Committee on Energy (CCoE).

The ministry argued that the plan should have a concrete and detailed “how” part of the targets envisaged in the Electricity policy. The plan should have been based on ground realities, especially the issues faced by the power sector.

PM seeks reform plan: Power sector PDM govt’s Achilles heel

MPD&SI maintains that the plan talks about NEP and its draft by March 2024, saying that an integrated energy plan is a broader plan as compared to an electricity plan; therefore, its timelines need to be finalised in consultation with relevant stakeholders, which might take more time than an electricity plan.

Deputy Chief Power, Engineer Fauzia Ayub has resubmitted the following recommendations to Power Division with the request to make them part of NEP: (i) Unserved demand on account of commercial load shedding and transmission and distribution losses must also be included in the demand forecast.

Demand forecast assumptions may be get approved from cabinet; (ii) annual update on tariff, cost of power and CoD timelines of committed plants to be incorporated in each iteration of IGCEP; (iii) Power Division may finalize the methodology/ framework for integration of Transmission System Expansion Plan (TSEP) and IGCEP; (iv) the proposed qualification criteria may be the discretion of Government (Federal or Provincial) to declare any project strategic, through the act of Parliament.

Tariff differential payment schedule should be defined which may be an upfront payment. Mechanism for source deduction for incremental cost may be incorporated in the plan; (v) Renewable Energy targets may be included in the revised ARE Policy & Generation Policy Framework and same may be omitted from Plan; (vi) the approval forum/ agency may be defined for early retirement/ post term extension of existing generation projects in the plan.

The process for early retirement/ post term extension of existing generation projects may be accompanied by detailed financial analysis; (vii) plan should entail long-term trade prospective across South Asia and Central Asia; (viii) K-Electric may be included in the process of formulation of TSEP and clear responsibilities in respect of NGC, Discos and PGCs may be defined for formulation of TSEP; (ix) distribution sector is currently providing to be the “Achilles’ Heel” for solvency and sustainability of the power sector.

The draft Plan should have a more detailed section on pointing out the problems in distribution sector and time bound solution along with required investment against each component; (x) the performance benchmarks/ targets for each Disco may first be revisited by the Regulator prior to development and signing of strategic roadmap for Discos.

Accordingly, realistic timelines for signing of strategic roadmap may be given in the plan; (xi) system and market operations may be merged with Strategic Directive 005. Further, timeline for accurate assessment of load not served in each DISCO may be defined in the plan; (xii) increase in share of indigenous resources may be subject to compliance of least cost principle; and (xiii) provision of direct subsidy in the bill instead of reducing the slabs rate be supported.

Copyright Business Recorder, 2023

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