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Print Print 2024-06-10

Massive installation of solar systems: Govt facing an impossible situation?

  • Bureaucracy portrays solarisation as catastrophic for the country’s existing power sector
Published June 10, 2024

ISLAMABAD: The federal government is reportedly facing a catch-22 situation with respect to massive installation of solar systems across the country, as bureaucracy portrays solarisation as catastrophic for the country’s existing power sector, whereas politicians occupying high offices are not buying this mantra.

Background interaction with bureaucrats, dealing with this hot issue and officials close to politicians sitting in high offices, showed that the net metering (solarisation) has become a headache for Islamabad.

Bureaucracy is sharing the ‘Australian Mode’ of net metering with the top brass and proposing measures to reduce its spread through different steps including reduction in buyback rates or other alternates.

Net metering power: Govt mulling bringing buyback rates down to Rs11/unit from Rs21

An active proposal which is being sold to Prime Minster Shehbaz Sharif is that bills of consumers be netted instead of units, which implies consumers will be charged higher rates and their bills adjusted with rates of solar generation to be fixed by the government.

According to the proposal, two invoices will be issued, one on imported electricity rates and the other on export rate to be determined by the Authority (Nepra). However, these proposals are facing stiff resistance, politically.

Minister for Power Sardar Awais Leghari has ordered the Power Division to investigate leakage of information about solarisation to the media.

Revision of buyback rates: PM directs Nepra, PD to amend net metering rules

Power Division maintains that at the current speed of installation of solar system in the country, an Independent Power Producer (IPP) is being added to the system. However, the current system of Discos especially transformers are overburdened due to flow of supply from domestic solar systems. Now Discos need investment to replace existing transformers with more capacity transformers.

Prime Minister Shehbaz Sharif had directed Power Division and Nepra to finalise recommendations on net metering tariff rationalisation.

U-turn on net metering

Power Division, which had submitted its recommendations to the Prime Minister last month to reduce buyback rates substantially, has been directed to move a summary after fine-tuning the following elements of rationalisation: (i) conversion of existing net metering regime to gross billing (separate rates for import and export of units); (ii) creation of separate tariff category; (iii) inclusion or otherwise of fixed charges; (iv) revision in buyback rates; (v) amendments in net metering Regulations; and (vi) a dynamic formula to determine a reasonable pay-back period.

According to sources, Power Division shared its finalised recommendations but the response from the top political office is not encouraging.

On June 1, 2024, Power Minister Awais Leghari also held an online meeting to discuss the impact of large quantum of solar generation under CTBCM.

According to sources in NPCC, the System Operator, it has been presented by the Market Operator-(CPPA-G) that in upcoming CTBCM, solar generation is expected to be the most economically viable option for future generation growth in the market.

Under the current Nepra Procurement Regulations, such generation being added to the system under bilateral contracts shall be taken as “committed” in the IGCEP and will not be subject to any least cost optimization or dispatch analysis.

Furthermore, under the firm capacity calculation mechanism provided in the Market Commercial Code, the firm capacity of solar generation is only 22%, whereby a BPC of 30MW would have to contract a solar power plant of more than 120MW to fulfil its capacity obligations. This would result in induction of a large quantum of solar generation in the system.

The only input of System Operator as Planner is with regard to its point of interconnection in the network to ensure power evacuation. This exponential growth of solar generation would lead to multiple operation challenges for the system operation in real time.

NPCC argues that expectation that solar generation would completely offset thermal generation during day time is not correct.

Understanding net metering, gross metering, and net billing: Pakistan needs sustainable practices

NPCC has maintained that due to limited number of unit startups allowed as per PPAs, Captive Coal-fired Power Plants (CFPPs) (on 50% load) and RLNG plants (on 70% load) would have to be kept at minimum during the day so that they may be ramped up at night hours to compensate loss of solar. These thermal plants would also be required during day for voltage control and to offset the intermittency due to environmental effects such as cloud cover.

NPCC further stated that as per the constraints imposed by SNGPL, the consumption rate of RLNG throughout the day has to be maintained within a small band.

The cost of all above mentioned additional thermal generation including PLAC (part load adjustment charges) during the day shall be socialised among all consumers as Ancillary Charges.

Therefore, while solar generation will reduce marginal price during day hours, the corresponding ancillary charges would increase if the operational constraints of PPAs (minimum loading, number of startups allowed) and RLNG flow rate constraints are not relaxed. Also, in absence of adequate Minimum Demand Regulation (downward frequency regulation), Variable Renewable Energy (VRE) generation may have to be curtailed.

NPCC has requested that while determining the upper limit of the maximum generation induction to be allowed under bilateral contracts and its resource mix, the operational constraints should also be studied and considered in addition to commercial/ financial viability before taking final decision.

Copyright Business Recorder, 2024


Comments are closed.

Nadeem Sheikh Jun 10, 2024 07:33am
The government will need to renegotiate their contracts with the IPPs to get rid of capacity charges.
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Nadeem Sheikh Jun 10, 2024 07:36am
Media is overwhelmed by PV installation in residential area of cities which may not be significant in the overall numbers. Global Sustainability trends warrant this to be encouraged and not punished.
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Patriot Jun 10, 2024 08:52am
solar consumer shld b taxed like wapda consumer as they r paying capacity charges taxes etc . revisit ipps contract, reduce electricity charges or get ready for situation like Venezuela etc
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KU Jun 10, 2024 09:13am
This "impossible situation" is called dishonesty. Bureaucracy is synonymous with greed n corruption, even at the cost misery for people n threat to Pakistan.
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Qasim Jun 10, 2024 09:47am
How about as a first step you get rid of corruption in the power sector, then look at screwing the public.
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M. Zahid Iftikhar Jun 10, 2024 10:02am
Short-sighted Bureaucrats are the bane of this country. Imagine not allowing Cell phones for the sake of PTCL landline network? Yes, that is what bureaucracy sees as important.
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Irfan Zaka Jun 10, 2024 10:06am
1. Free electricity units should first be discontinued for all. 2. The privileged class (bureaucrats, establishment, politicians, judiciary etc) can then decide for betterment of their countrymen.
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Tariq Qurashi Jun 10, 2024 10:25am
The bureaucracy is trying to force the government to make consumers buy expensive grid electricity instead of producing their own Solar. But what will be the political and economic cost?
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Yourname Jun 10, 2024 10:35am
Force people to get solar first because of high prices of power, because of absolutely atrocious deals with power generators for their own commissions at the cost to the nation.Cry because of the same
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Yourname Jun 10, 2024 10:36am
Why does this country prefer to be run by (bad) circus clowns?
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Kiko Jun 10, 2024 11:30am
Then why installing 600 mw solar plant
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ali Jun 10, 2024 11:53am
millions of dollars are sent abroad to IPPs under "capacity charges" . alot of this money thab goes straigh to banks of those people at top.
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Nasrullah Khan Jun 10, 2024 12:00pm
Good paying consumers shifting to solar and sick govt machinery on power grid. They owe to pay billions to discos.
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M. Zahid Iftikhar Jun 10, 2024 12:58pm
@Yourname, We don't prefer circus clowns, but people like Imran Khan just parachute into PM position because certain powerful people oppose civilian rulers. Thanks to IK, everyone is a puppet now.
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Kamran Jun 10, 2024 01:15pm
Its not impossible.... Government send police raids .. arrest family memebers. They will force to take out solar pannel and in between installation get bribe as well.
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Nafis Jun 10, 2024 01:29pm
Future is off grid, Pakistan and its citizens can be better off without the gigantic bureaucratic structure and their useless policy decisions such as Peak Power Rates esp. in presence of C/Payments.
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Builder Jun 10, 2024 02:09pm
DISCOs should have prepared themselves for this situation. It's good to have more power available on grid but not when you have half of your industry collapsing.
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Aam Aadmi Jun 10, 2024 05:44pm
Solarisation is a catastrophy not for the country but for those 'Muft Khoras' in thousands, perhaps Lacs, who have had luxuries all their life at the cost of the common man. This must end now.
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Faraz Jun 10, 2024 06:29pm
Corrupt PTI and PPP governments have bankrupted the country.
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Ch K A Nye Jun 10, 2024 07:16pm
@M. Zahid Iftikhar, How many times have the clowns collectively known as PDM 2.0 come in to destroy the country?
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Gargoyle Jun 10, 2024 08:39pm
According to government data, currently, there are 113000 net metering connections in the country which is insignificant. Stop wasting time on minutia and fix leakages and corruption.
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Gargoyle Jun 10, 2024 09:43pm
@M. Zahid Iftikhar, please name one PM who didn't parachute into the role. It is no coincidence that we haven't had a competent government in the entire history of Pakistan.
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Zubair Edhy Jun 10, 2024 10:54pm
Even if net metering is stopped, in few years battery tech will make users independent of grid. Stopping solar adoption is not a solution. In 1980s to protect PTC investment we banned VoIP. Myopia.
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Hussain Jun 11, 2024 10:37am
@Irfan Zaka , totally agreed... this is the only beginning tht should be considered. All free units should be banned and everyone should pay for their consumption.
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Rehan Jun 11, 2024 07:34pm
Solar is only 2%-4% of capacity. Pakistan has pledged 20% VRE by 2025, 30% by 2030 We must renegotiate IPPs, improve distribution, and get rid of fossil fuel addiction ​. We need more solar, not less
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Chaudhry Shahid Nazir Jun 12, 2024 02:08pm
Good and affordable rates
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Tariq Jamil Jun 12, 2024 09:40pm
Actual problem is corruption ridden agreements with ipps which need to be dealt with strong hand. Netmetering is being used as a scape goat, given its estimated 0.3% share in overall generation.
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DR.A.BASHIR Jun 13, 2024 09:12am
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