Cat-III projects: PPIB asks KE to submit investment plan for Nepra’s nod

ISLAMABAD: Private Power and Infrastructure Board (PPIB) has asked K-Electric to submit an interim investment plan for approval of National Electric Power Regulatory Authority (Nepra), well-informed sources told Business Recorder.

In response to KE’s letter of January 18, 2024 on evacuation of power generated through wind power projects, PPIB has sought confirmation from KE regarding the evacuation/procurement of power from Category-III wind projects through competitive bidding by PPIB, the Request For Proposal (RfP) documents for these projects being prepared by PPIB. KE, as the off-taker for Category-III projects in Sindh, has been required to share/provide the draft Energy Purchase Agreement (EPA) for inclusion in the RfP documents before finalizing them and submitting them to Nepra for approval.

Further, based on the tentative timelines prepared by PPIB for Category-III wind projects, the commissioning of those projects is projected for the third and fourth quarter of 2026.

KE seeks PD’s support for early approval of Indicative Generation Plan

Keeping this in consideration, KE has been requested to develop and present an interim investment plan to Nepra for approval, concerning both the transmission investment required for evacuating power from Category-III projects and additional investment to manage intermittency, ensuring the balance of system generation load. Additionally, Nepra’s approval may be sought for any necessary amendments to the investment plan following the selection of successful bidders, taking into account the site locations of these bidders.

This correspondent sought comments of Managing Director PPIB on commencement of bidding process of wind projects of category-III projects but did not receive any response till the filing of this report.

Recently, Executive Committee of Special Investment Facilitation Council (SIFC) directed PPIB to conduct competitive bidding process for 300 MW out of category–III wind projects.

However, category-III solar projects will be considered after finalization of Indicative Generation Capacity Expansion Plan (IGCEP) and Transmission System Expansion Plan (TSEP).

Recently, Pakistan Foreign Renewable Energy Investors Forum, in a letter to the Chief of Army Staff, stated that PPIB and Power Division has made efforts in inviting investments, as evidenced by the solicitation of the Muzaffargarh 600 MW solar project. However, despite these efforts, the bidding processes in May 2023 and September 2023 did not yield the expected results.

Pakistan to have fuel-free electricity at cents 5/kWh from wind and solar projects which will bring down basket prices as currently basket price is cents 10-12/kWh by with use of imported LNG and coal.

Since 2017, in Pakistan no new wind or grid solar projects have been sanctioned, whereas, India and China have made significant strides in these sectors by adding hundreds and thousands of MW of wind and solar projects.

“If 10,000 MW of wind and solar projects are installed in Pakistan, we can save foreign exchange of $2-3 billion per annum in fuel-import bills (LNG, imported coal),” said Mustafa Abdulla in his letter to the COAS.

The ARE-2006 policy was a significant step forward, aiming to establish 1,700 MW of wind and solar power from 2017 onwards. However, its discontinuation in 2017 was a setback.

The subsequent ARE-Policy 2019, despite its merits, has posed challenges in fostering future wind and solar projects, as seen in the outcomes of PPIB’s recent bidding attempts.

Copyright Business Recorder, 2024