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October 16, 2019

CPPA opposes renewable capacity addition into the system

Business

October 16, 2019

KARACHI: The Central Power Purchasing Agency (CPPA) has opposed renewable capacity addition in the system and urged National Electric Power Regulatory Authority (NEPRA) to give due consideration to the short-term and long-term forecast for additional capacity requirement.

“The capacity addition without rationalising the same with demand projections will result in surplus capacity which will cause significant financial implications,” the agency noted in a communication to NEPRA.

CPPA has received several requests for consent of the power acquisition from several renewable generation companies, and the same has not been acceded to as these requests stand untenable.

It may be mentioned here that the Cabinet Committee on Energy (CCoE) has decided that the space available in the current evacuation scheme in wind corridors would be awarded through the competitive bidding process without exception and after the quota allocation of renewable energy by the Grid Code Review Panel.

CPPA notes that NEPRA has been entrusted with the duty to safeguard the interests of the consumers and, in the performance of its duties, is required to examine least cost option criteria enumerated there under.

“In light of this solemn statutory obligation, it is submitted that NEPRA must review the renewable energy proposals in the context of the demand versus supply situation, coupled with the quantum of renewable energy to be induced in the national grid according to the recommendations of the Grid Code Review Panel duly approved by NEPRA from time to time.”

Responding to CPPA observations, NEPRA opined that with the delays being experienced by the major projects it was very unlikely that there would be any surplus renewable generation capacity.

NEPRA noted that sustainable and affordable energy was a key prerequisite for socio-economic development of any country. In fact, the economic growth of any country was directly linked with the availability of safe, secure, reliable and cheaper supply of energy. In view of the said reasons, the authority was of the considered opinion that for sustainable development, all indigenous power generation resources including renewable energy should be developed on priority basis.

“The existing energy mix of the country is heavily skewed towards the costlier thermal power plants, mainly operating on imported fuel. The import of fuel for electric power generation not only causes depletion of the precious foreign exchange reserves of the country but is also an environmental concern,” it said.

Therefore, in order to achieve sustainable development it was imperative that indigenous RE resources were given priority for power generation and their development encouraged.

Supporting diversification in the energy portfolio of the country, NEPRA noted that it would not only enhance the energy security of the country by reducing the dependence on imported furnace oil but would also help reduce carbon emissions by generating clean electricity, thus improving the environment.

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