ISLAMABAD: Wind Power Plants (WPPs) are said to have disagreed with Engineering Development Board (EDB) for use of locally manufactured parts, saying that the proposal does not match with the ground realities or even plausible approach of the government of Pakistan for reviving local industry, sources close to CEO AEDB told Business Recorder.
On March 3, 2029, EDB wrote a letter to Power Division, opposing continuation of exemption in customs duty on the import of plant, machinery, equipment, spares and other capital goods, etc., for setting up and balancing, modernization, rehabilitation and expansion (BMRE) of power units of 25-MW and above, without condition of local manufacturing.
The wind power industry, in its response to the EDB letter, stated that the exemption was for new setups and for BMRE of power plants, as well. The BMRE is something which remains with the project throughout its life (the project term), especially in case of WPPs, which is a relatively new technology still developing at quite a fast pace.
Moreover, as reported worldwide, the scheduled maintenance intervals of WPPs have been shortened for various reasons ranging from site specific issues to pre-mature technology requiring extensive maintenance which was not envisaged by the developers.
For example at HDPPL site, corrosion has become the main issue which is being experienced by HESCO and NTDC networks also. The other main issues which are damaging our equipment are excessive curtailments, unplanned tripping of the evacuation network and operation of the network beyond the agreed technical limits. This has led to loss of life of major WPP equipment including premature failure of the equipment requiring its complete replacement.
Wind power industry argues that it is very easy to say that transformers, switchgear and control panels are being manufactured locally but whether any of the locally available equipment can replace the imported OEM equipment in a WPP is a very big question. For about a year HDPPL has been trying to get one of its 1600kVA, 0.69/22kV WTG transformers repaired locally and is ready to give an order for a new transformer but is still waiting to get an offer.
The other manufacturer was not able to even provide the timelines of repair and delivery or show how the repaired and new transformer would be tested adequately at his works to send damaged transformer to him.
Actually the transformer manufacturers are also not at fault. Once they have found the fault, it is highly likely that the required size of HT or LT copper, or the tap changer etc., is not available in the market while any import of material due to dollar crunch these days is next to impossible.
“With our latest experience of the local industry with transformers, switchgear, etc., and also some other electronic equipment (WTG crowbar), we can safely say that it may take a number of years and firm orders of new equipment for the local industry to slowly take off,” stated the letter.
Considering the existing circumstances, WPPs think that the proposed amendment in part -1 of the fifth schedule will create further turmoil in the wind industry which has already been suffering because of excessive curtailments due to weak network and inadequate planning.
The recent NEPRA Report on nation-wide shutdown blames the withdrawal of just 500-MW of Wind Power from the network (only 15% of the running load at that time) to start the cascade tripping causing a blackout in the entire country.
“Now some foreign investors have started thinking whether it will be worthwhile to invest in RE projects in a country whose backbone (NTDC) starts buckling up at even 7% of the RE load,” said Saleem Munshi, CFO Hydrochina Dawood Power (PVT) Limited.
There are countries whose networks can easily take more than 50% of RE load without a whimper. Pakistan’s networks are supposed to be following the same standards and investments are also comparable but a check of SAIFI and SAIDI figures of 132kV network (published yearly in NEPRA’s State of the Industry Report) may give a big surprise regarding the O&M of the network.
Further any change in duty and tax structure of BMRE of executed EPAs and IAs may prove to be the ‘last straw’ for investors who are already quite wary of the shifting of the goalposts by the government agencies during the game. Instead of attracting the investments, it is bound to drive them away.
The total installed generating capacity of electricity at 41GW is just the nameplate capacity, which is just a figure and does not say anything, e.g. Kanupp, which has been producing max.72MW including auxiliary power during the past 30 or more years, whenever it operated, has always been considered as a 137.5MW plant, i.e., its nameplate capacity.
The peak demand is around 27GW, which the transmission system can hardly meet due to its fragility. The winter demand is low but with industry gone, it is mostly domestic. In IGCEP, one should also see that the ratio of domestic to industrial consumption is 2.0 whereas in developing countries it is less than 0.2. About 7 years ago it was around 1.0., Pakistan’s non GDP generating parasitic consumers have drastically increased over the years.
Copyright Business Recorder, 2023