NEPRA urged to link RE plans with demand forecast to avoid surplus capacity

KARACHI: The Central Power Purchasing Company (CPPA) has asked the power regulator to consider renewable energy projects in light of the quantum determined through Indicative Generation Capacity Expansion Plan (IGCEP) for competitive bidding to avoid surplus generation capacity.

In a note to National Electric Power Regulatory Authority (NEPRA), CPPA referred to the decision of Cabinet Committee on Energy (CCoE) dated March 29, 2019 regarding renewable energy project, that all future RE investments would have to be dealt under the RE Policy 2019, which clearly enunciated a framework consistent with current international market norms and greater consumer benefits.

CPPA said once IGCEP determined NEPRA approved additional power need by June 2023, and National Transmission and Despatch Company (NTDCL) confirmed its interconnection, Alternate Energy Development Board (AEDB) would conduct competitive bidding. A single bidding would be held for each technology, and for the capacity to be procured under each technology.

The RE power producers were of the view that new draft RE Policy set the RE generation targets of 30 percent by 2030 in overall energy mix. “Instead of moving towards target in good pace, the bidding process will eventually slow down overall installation of RE projects in the market,” an official at a renewable energy company said.

“On average it takes 5-8 years for a project to be on ground in Pakistan. Considering this point we cannot see any big advantage for changing in tariff regime for the current solar projects in Pakistan. The investors will quote same tariff numbers during bidding process and no greater economic benefit will come. Bidding will only slow down the private investment in the solar PV sector,” the official said.

The existing energy mix of the country is heavily skewed towards thermal power plants, mainly operating on imported fossil fuel. The continuous import of fossil fuel not only creates pressure on the precious foreign exchange reserves of the country, but is also an environmental concern. Therefore, in order to achieve sustainable development, it is imperative that indigenous RE resources are given priority for electric power generation and their development is encouraged.

NEPRA believes that RE projects will help in diversifying the energy portfolio, and increase the share of RE in the country. Further, it will not only enhance the energy security of the country by reducing dependence on imported fuel, but will also help in reducing carbon emissions by generating clean electricity, thus improving the environment.