Curtailment in high wind season: Minister seeks report on UEPW accusations

ISLAMABAD: Minister for Power Khurram Dastgir Khan has sought a report from the Power Division on accusations of United Energy Pakistan Wind (UEPW) regarding excessive and non-proportionate curtailment during high wind season.

The company, in a letter to Minister for Power, expressed deep concern over excessive curtailments of its wind power project during high wind season, fearing that this practice is pushing it towards a default scenario.

“In prevailing circumstances, we shall not be able to produce enough power to generate invoices, sufficient to discharge our mandatory financial obligation including the next debt servicing in December 2023. We; therefore, are raising the ‘Red Flag’ now for UEP Wind Power project and requesting to intervene and take appropriate measures to stop this ongoing curtailment issues immediately,” said Khurram Shahzad, President of the Company in a letter to Minister for Power.

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The Wind Power Company has also informed the Minister that it is also facing non-proportionate curtailments, i.e., UEPW having a higher installed capacity (99-MW) is curtailed to a fixed absolute value, which is not proportionate to the curtailment on other wind IPPs with lower installed capacity.

Such curtailments of UEP Wind Power result in severe losses in generation capacity which seems to undermine the financial viability of the project,” he said adding that compensation in terms of the Non-Project Missed Volume (NPMV as defined in the EPA) does not compensate the Seller for the actual revenue lost on account of such curtailments, especially in high wind season.

“UEP Wind Power never achieved its annual benchmark energy of 269 GWh (31% capacity utilization factor) since establishment of the project in June 16, 2017 whereas the project has achieved only 65% of benchmark capacity (176 GWh) in the operational year which ended on June 16, 2023,” claimed President of the Wind Power Project.

The Power Company, in its letter maintained that despite the fact that the issue of excessive curtailments and non-proportionate curtailments has been discussed in detail several times with all relevant key stake-holders in GoP (verbally and in writing), who already acknowledged and agreed to the stance of UEPW, it is unfortunate that till date, the curtailment issue has not been resolved.

The Company has requested the Minister for Power for help and support to intimate the concerned offices in GoP to immediately cease this ongoing curtailment scenario of UEP Wind Power project, in purview of the RE Policy 2006, applicable provisions of tariff determination and the Energy Purchase Agreement (EPA).

The sources said that Minister for Power has directed the concerned officials of Power Division to draft a reply and put up for his information and approval.

Wind Power Energy Association (WPEA) is continuously writing about discrimination in allocation of load by the National Power Control Centre (NPCC) due to transmission issues. However, transmission constraints are now almost over after completion of new transmission line from wind corridor.

Copyright Business Recorder, 2023