Nepra notifies tariff for hydropower projects

KARACHI: The National Electric Power Regulatory Authority (Nepra) on Monday notified the upfront tariff for small hydropower generation projects with a capacity between one and 25 megawatts.

The notice said the levelized tariff for low head hydropower generation projects, based on 100 percent foreign financing, will be Rs11.1016/kilowatt hour. The tariff for low head hydropower, based on 100 percent local financing, will be Rs13.0297/kWh. The tariff for high head hydropower projects, based on 100 percent foreign financing, is fixed at Rs10.2559/kWh. And, the levelized tariff for high head hydropower projects, based on 100 percent local financing, is fixed at Rs12.0606/kWh.

A number of small hydropower projects, mostly in Khyber Pakhtunkhwa and Azad Kashmir, are engaged in developing small projects of up to 25MW generation capacity.

These tariffs are only applicable for small hydropower generation companies with an installed capacity in the range of one megawatt to 25MW.

Companies with new machinery are eligible for the upfront tariff and the projects will provide a certification in this regard.

The Nepra said the companies could agree to the tariff within a year. The tariff, granted to any particular company for any particular project, will no longer remain valid if the financial close is not achieved for the relevant project within 18 months from the tariff grant date or a generation licence is declined.

The authority set the maximum construction period at 36 months after the financial close. No adjustment related to the financial impact of any delay in the project construction will be allowed in this tariff. “However, the failure of a project to complete construction within 36 months of financial close will not invalidate the tariff granted to it,” it said.

In the upfront tariff, no adjustment for certified emission reductions has been accounted for. However, if the company chooses to register for carbon credits, the subsequent proceeds from trading of carbon credits will be distributed between the power purchaser and the power producer in accordance with the policy for development of renewable energy for power generation 2006.

The tariff is only available for green field hydropower projects and would be applicable for 30 years from the commencement of the commercial operations.

The proven potential of small hydropower projects that could be developed in less than three years is estimated at 1,800 megawatts, but is much higher, involving longer development period.