ISLAMABAD: K-Electric has sought guidance from the Private Power & Infrastructure Board (PPIB) for registration to acquire its services as Independent Auction Administrator (IAA) for preparation of Energy Purchase Agreement (EPA) for Category-III wind projects, well informed sources told Business Recorder.

In a letter to Managing Director PPIB, Shah Jahan Mirza, titled “request for initiation of registration process of K-Electric for acquiring the services of PPIB as IAA to conduct the procurement of 300 MW wind power from Jhimpir region (Cat-III Wind Project), amongst the Letter of Intent (LoI) holder included in the category-III for KE’s power offtake” has referred to previous letters starting from January 5, 2024, and emails/communications to proceed further on the issue of RFPs.

According to the power utility company, in line with the engagements and in accordance with National Electric Power Regulatory Authority’s (NEPRA’s) Electric Power Procurement Regulations 2022, (NEPPR) Part IV sub-regulation 9(1), it is desirous of exercising its option to utilize the services of PPIB, an IAA, for conducting its procurement process for the Cat-III Wind Projects.

KE argues that it understands that PPIB in its role as IAA, under the NEPPR 2022 Part V sub-regulation 14(1) & 15, will be responsible for, inter alia, the preparation of the RfP Package including the requisite studies for the competitive auction, after soliciting KE’s consent.

Getting power from Cat–III wind projects: KE links setting up of infrastructure to Nepra’s nod

Accordingly, KE has sought MD PPIB’s guidance for the registration process of KE with PPIB, to solicit its services as IAA, for the Energy Purchase Agreement (EPA) with KE.

“If the draft engagement contract required to be executed amongst PPIB and KE, is also shared that confirms our understanding of the services we will be providing to you, for our review and inputs,” said Shahab Qader Khan, Chief Strategy Officer KE, in his letter to Managing Director PPIB.

The power utility company has also shared draft of confidentiality agreement with Managing Director PPIB to prove its seriousness to procure power from Cat-III Wind Power Projects.

“Furthermore, to facilitate the process for the sharing the requisite data amongst PPIB and KE, we are also sharing KE’s standard Non-Disclosure Agreement (‘NDA’) draft, shared previously via email on April 22, 2024,” he said, requesting MD PPIB to promptly review and share the executed version. procurement of power from Cat-III Wind Projects under a long-term Energy Purchase Agreement (‘EPA’) with KE.

In January this year, K-Electric had linked establishment of infrastructure of power evacuation from category–III wind projects with approval of investment plan from Nepra.

KE’s Chief Strategy Officer stated that the power utility company is actively pursuing the integration of renewable generation into its network, showcasing its commitment to leveraging renewable energy sources and reducing dependence on imported fuels.

According to him, KE has already expressed its interest in acquiring power from CAT-III projects. But as already noted KE does not have transmission infrastructure in the vicinity of CAT-III wind project sites at Jhimpir region. However, due to the dispersed location of these projects, determining transmission arrangements before the conclusion of bidding process is not possible.

Similarly, the transmission investment for power evacuation is not covered in KE’s current investment plan. Therefore, approval from Nepra will be required. Further, with addition of renewables, additional investment approval from Nepra will be required to cover the intermittency to ensure the generation load balance of the system.

The timeline for the Commercial Operation Date (COD) of the projects have to be aligned with the transmission arrangement and operational reserve availability. The letter noted that K-Electric looks forward to the next steps and remains available for any further clarification required in this regard.

Recently, it was decided at a meeting of National Power Control Centre (NPCC), the system operator, to formulate wheeling mechanism for evacuation of power from category–III wind projects that a quantum of approx 250MW to 350MW from Cat-III wind projects can be evacuated through K-E system.

For evacuation of power directly from Cat-III projects through KE system, the power utility company will carry out a techno-economic analysis for which PPIB will share the coordinates of the land acquired by Cat-III wind projects with KE.

KE will share the system studies with NTDC enabling NTDC to confirm the quantum of power that can be transmitted through NTDC system to KE system specifically from Jhimpir to Dhabeji grid station.

Simultaneously, NTDC will formulate a wheeling mechanism, inclusive of performance obligations related to Non-Project Missed Volume (NPMV), for power evacuation from Category-III wind projects by K-Electric through the NTDC system (Jhimpir-II grid station).

Cat-III projects are those projects that do not require tariff/generation licence from Nepra till the date of CCoE decisions of February 27, 2019 and which are to be processed through competitive bidding by erstwhile Alternative Energy Development Board based on IGCEP outputs and confirmation of Interconnection Ready Zones (IRZs) by NTDCL.

IGCEP 2022 allows addition of 500-MW wind and 3,120-MW solar for the year 2025.

Copyright Business Recorder, 2024

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