Thermal IPPs were setup under the Benazir Bhutto’s 1994 energy policy. These plants were to run on oil and were established for a temporary period of six years only. It was envisioned that cheaper alternatives like coal, solar and hydro power plants would be added during these six years. However, due to a number of reasons the other power plants were never established and Nepra used this excuse to renew the contracts for the IPP's at the same high rates. Furthermore, during all this time Nepra failed to highlight the high contract costs, the low power producing capacity or cheaper coal and renewable energy options for Pakistan.
The government must renegotiate these exorbitant IPP contracts with the aim of cutting costs. In addition, more investment must be channeled into cheaper alternatives such as renewable energy.
Shahryar Khan Baseer Engr
Peshawar
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