Islamabad: Minister for Energy Hammad Azhar said on Monday that the Council of Common Interests (CCI) has approved Indicative Generation Capacity Expansion Plan (IGCEP) pending since 2005.
According to him, IGCEP model will only allow power generation on need and least cost basis. "IGCEP model that only allows power generation to be added when its needed (demand-supply projections and least cost basis) open competitive bidding," he added.
Hammad further stated that issues like excess capacity and expensive, non-transparent power contracts will be avoided in the future as a result of IGCEP.
"Had such a model been put in place in the past, we would have avoided circular debt and many other problems," he maintained.
The Cabinet Committee on Energy (CCOE) in last meeting while approving the IGCEP directed the Power Division to develop methodology and criteria for strategic projects in consultation with the provinces under the National Electricity Plan within two months.
The CCoE took the following decisions: (i) till the expiry of contractual term of corresponding PPA and GSA, existing RLNG and imported coal-based projects will be given minimum dispatch as per contractual obligations which are to be revised downwards as per Federal Cabinet decision on the matter; and (ii) approved private sector projects which have obtained LoS as of December 2020. For Federal and provincial public sector projects, the PC-I has been approved and funding secured (as of March 2021). However, M/s Jamshoro Unit-2 and M/s Chashma-5 nuclear plants shall be modelled as candidate projects to be evaluated under least cost principle.
The CCoE also decided that: (a) GDP projections for the IGCEP input assumptions shall be obtained from the Finance Division; (b) subsequent iteration of IGCEP may be expedited and completed as per timeline provided under grid code; (c) Power Division shall develop the methodology and criteria for strategic projects in consultation with the provinces under the National Electricity Plan within two months; (d) Power Division shall develop the criteria for inclusion of transmission costs as a part of generation costs in consultation with the provinces within two months; and (e) Law Justice Division shall finalize its advice regarding category-III RE projects before next Cabinet meeting.
Copyright Business Recorder, 2021