Cheap power producers to be included in system: Leghari

ISLAMABAD: The government has announced ending of upfront tariff regime for the indigenous renewable energy generation projects and decided to award future contracts in the sector through competitive bidding. Hydel power plants with less than 50 MW of generation capacity would also go through competitive bidding.

Minister for Energy (Power Division) Awais Ahmad Khan Leghari said in a news conference here Wednesday that the government would include in the system who will produce cheap electricity, adding that there is no power loadshedding in the country. The government has 1,000MWs of such projects in pipeline in wind and solar energy sector, which would be awarded to contractors through competitive bidding in the weeks to come, he said.

“Previously, the decisions regarding power policy were taken in emergency when the system was in the ICU, but for the first time we have the opportunity to make decision with maturity,” the minister said.

“It’s time to fulfill our promise of cheap electricity to the consumers. Now investors would be invited for competitive bidding to get the lowest rates and pass on the maximum benefit to consumers,” Leghari said.

“Within eight weeks, you will see the competitive bidding for award of generating 400 megawatt wind and 600MWs solar electricity,” the minister claimed.

Flanked by Minister of State Chaudhry Abid Sher Ali, Leghari said that the under the renewable energy policy 2006, upfront tariff regimes were introduced for induction of a new technology and to overcome the power shortage. As the technology is evolved and technical data is available, it is high time that the regime of tariffs is changed and more competition is brought to these sectors while promoting and incentivizing introduction of renewable in the national grid.

Earlier, special rates were being offered to the power generation companies in the shape of upfront tariff, which has encouraged these companies for investment in Pakistan. The situation has improved, as the country has surplus electricity, and the Cabinet Committee on Energy (CCOE) has permitted to change those rules.

The Renewable Energy Policy 2006 (amended 2013) covers projects under Solar, Wind, Bagasse and small hydel sources. The policy specifies mandatory purchase of electricity, hydrology risk for small hydropower projects to be borne by power purchaser and wind speeds and solar risk to be borne by power purchaser.

The prevailing tariff regimes are either upfront or cost plus where the wind upfront tariff is now Rs. 6.74/unit, Bagasse Tariff is Rs7.97/unit, Small hydel upfront tariff is about Rs12/unit. It is expected new tariff will be lower through competitive biddings. Now, it has been decided to produce cheaper electricity to facilitate consumers, for which power generation through renewable energy resources like wind, solar, biogas and small hydel plants will be carried under an open competitive bidding process.

Leghari said that the new policy (competitive bidding) will have great impact to meet future energy needs of the country at affordable price. This is just the beginning and the government would introduce more such programs in the coming months. Replying a question, Leghari said that the new regarding load shedding is mere propaganda as there was no power outages in any part of the country, except the areas of high line loses.

Leghari said the Power Division was losing some Rs 135 billion every year on account of line losses mainly due to theft and the burden was being carried by millions of Pakistani. He said that all efforts are being made to stop theft and in this regard he had written letters to the provincial chief ministers to devise a strategy in collaboration with departments concerned involving law enforcement agencies for preventing power theft. Beside he said that they are also planning to outsource or lease the feeders to prevent power theft.

Awais Laghari further said that they are going to introduce a computerized system under which every consumer could get details of his meter on mobile to avoid over-billing. To another query about circular debt, he said the government was in process of making payments to independent power producers and hopefully the entire debt would be cleared soon.

Minister for state Abid Sher Ali while responding the extended load shedding in some of areas in KP said that 126 feeders in Khyber Pakhtunkhwa were running on 85 percent loss. Besides, there is another problem of tripping and low voltage in Mardan, Chakdara, Swat and Dir. He said that the construction of grid was delayed due to the KP government as for three years they were unable to provide land for the grid station. Now the land has been provided and the federal government will complete the project within one year. Setting up of Grid stations in Chakdarra will help to end low voltage complaints and tripping these areas, he said.