Wind energy projects await upfront tariffs to take off

KARACHI: The power regulator has been dragging its feet on unveiling upfront tariffs for wind energy for the past one year, hamstringing the takeoff of various projects amid widening electricity shortfall in the country, apex trade body said on Wednesday.

The Federation of Pakistan Chambers of Commerce and  Industry (FPCCI), quoting sources, said  a number of wind power projects, which have completed the requirements of letters of interest (LoIs) have been awaiting upfront tariff to be announced by National Electric Power Regulatory Authority (Nepra) since June 2016.

“They said Nepra was earlier stopped from announcing the upfront tariff for the wind projects and was asked to switch over to the long and tedious process of competitive bidding,” FPCCI’s statement said.

In January, the regulator announced 20 percent lower benchmark tariff for competitive bidding for wind power projects.     Sindh government, which is administrating several wind energy projects, didn’t like the idea, saying the structure could not be changed under the terms of LoIs.  FPCCI said wind projects have a shortest construction time of 15 to 18 months with current tariffs as low as between six to eight cents – the cheapest and cleanest source of power.

“Had the upfront tariff been announced in time during June 2016 most of these projects could have been near to completion by now, giving some relief from load shedding to the public,” said an industry official.

He said more than 1,200 megawatts of wind power can be injected into grid network in 2019 and PC I for the schemes to make the necessary infrastructure available have already been approved. “The inaction and continued lapses in promoting the wind projects, while the whole world is switching to wind and solar energy, is once again making the public suffer for the negligence on the part of the line departments.”

Power demand and supply gap has crossed 6,000MW as summer increased the consumption of electricity in the country.

The officials said the Prime Minister Nawaz Sharif, during a meeting of the cabinet committee on energy, directed the power ministry to immediately resolve upfront tariff issues with Nepra for different kinds of fuels, including liquefied natural gas, solar, coal, furnace oil, diesel and gas. He also ordered all line departments to work out immediate solutions for administrative and legal issues that are holding up the implementation of energy projects.

Estimates said wind power potential only in Sindh stands at more than 40,000 megawatts. The Alternate Energy Development Board (AEDB) planned to enhance the energy mix up to 20 to 25 percent by adding 3,000 to 3,500 megawatts wind-based electricity to the national grid system by 2018.

Out of this as many as 1,396 megawatt wind electricity will be included in the system by 2017 as the AEDB would complete several projects initiated for alternate power generation. Currently, the wind projects having 255.4 megawatts power generation capacity are operational across the country, including FFC Energy (49.5 MW), Jhimpir Zorlu Enerji Pakistan (56.4 MW), Jhimpir Three Gorges First Wind Farm Pakistan (49.5 MW), Jhimpir Foundation Wind Energy-II (50 MW) Gharo and Foundation Wind Energy I (50 MW) Gharo.