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October 19, 2019

Power projects with 11,684MW capacity in limbo

Business

October 19, 2019

KARACHI: At least 33 power projects of different fuel categories with a cumulative capacity of 11,684 megawatts are facing delays due to various problems and issues, an official at the National Electric Power Regulatory Authority (Nepra) said.

The problems have been blamed on the sheer number of projects seeking to connect at the same time, tight new connection rules, last minute alterations, lack of preparedness by some developers and contractors, and resource-constrained distribution companies.

In view of these delays, Nepra planned a proper demand-supply assessment to align the same with the actual implementation schedule of the projects to determine whether or not there is any surplus practically.

“With the delays being experienced by the major projects it is very unlikely that there will be any surplus capacity,” the official said, requesting anonymity. Commercial operations date of new projects is not certain.

Nepra has issued licences and tariffs to a number of wind power projects, which are facing delay due to non-issuance of letter of support due to which it is not clear if projects having accumulated installed capacity of 449.3 megawatts are to be connected to the national grid between 2019 and 2025.

“As of now there is no clarity whether these projects will be implemented under the cost plus regime or the competitive bidding arrangement and this uncertainty is resulting in further delays of project implementation,” the official said.

The projects include Shaheen Renewable Energy 1, Western Energy, Lakeside Energy, Artistic Wind Power, Trans Atlantic Energy, Tricom Wind Power, Din Energy, Act 2 Wind, and Nasda Green Energy.

On the front of solar power, similar kind of situation is prevailing as the projects of accumulated installed capacity of 193.52 MW are in limbo for the same reasons as mentioned in the case of wind power projects. The projects include Access Solar, Buksh Solar, Jan Solar, Lalpir Solar Power, Blue Star Hydel, Blue Star Electric, Siddiqsons Energy Limited and Zurlu Energy.

Nepra granted generation licences and tariff to different bagasse-based projects with accumulated installed capacity of 238.90 MW. The projects are pending as energy purchase agreements have not been achieved yet due to which these projects are facing delays and their expected commercial operation date would now be postponed for at least two years. The projects include Hunza Power, Indus Energy, Faran Power, Mirpurkhas Energy, Etihad Power Generation and Bahawalpur Energy.

Similarly, several coal, hydel and regasified liquefied natural gas projects are also facing delays in financial close and construction and other related activities. The review of the latest update available from Power Infrastructure Board indicates that these projects would not be coming online before December 2028.

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