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Tariffs Of Renewable Energy Projects To Be Re-Determined

dfd The government has decided to re-determine tariffs of all those renewable energy projects which had been granted tariffs more than a year, aimed at making their tariffs as per market environment, well-informed sources told Business Recorder.

This responsibility has been assigned to the National Electric Power Regulatory Authority (Nepra) which is already under the radar of the National Accountability Bureau (NAB) for awarding "higher tariffs" to almost all power projects of the past.

There were several projects which opted for litigation against the government decision for review of tariffs. Sindh government had also accused the federal government of step-motherly treatment with renewable energy projects especially wind projects being established in Gharo and Jhimpir. Minister for Energy Sindh, Imtiaz Shaikh has recently repeated his accusations at a National Electric Power Regulatory Authority (Nepra) public hearing meant for licence of provincial transmission company.

Giving details, sources said that the Power Division through a summary for Cabinet Committee on Energy (CCoE) on February 22, 2019, along with other proposals requested approval of amendments in decisions of the committee taken on December 17, 2017 and February 2018 which are as follows: "all projects that have been issued LoIs and have been granted determination of tariff by Nepra and issued a generation licence would be allowed to proceed ahead towards the achievement of their requisite milestone as per Renewable Energy (RE) Policy 2006. However, if the tariff determination has been done since more than one year or if the tariff validity period has lapsed, Nepra would be requested for review of it to make it consistent with the current market environment conditions and consumer interest. Such review shall include appropriate time extension to reach financial closing."

However, the decision was communicated sans the words "if the determination in done since more than a year". On February 22, 2018, the CCoE had decided that all projects which have been granted letters of support (LoS) by the Alternate Energy Development Board (AEDB) shall be permitted to proceed towards the achievement of their requisite milestones as per the Renewable Energy Policy 2006.

However in those cases where more than a year has elapsed since tariff determination by the Nepra, the rates would have to be reviewed by the regulator as per policy. Power Division maintains that such an omission leads to changing the whole policy with serious financial implications. Accordingly rejoinder was sent to Cabinet Division, which, however, advised the Power Division to furnish a fresh summary to the Cabinet Division for presentation to the CCoE.

Power Division requested the CCoE for rectification and approval of the original proposal along with the sentence "if the tariff determination has been done since more than one year". During the ensuring discussion, the Chairman CCoE directed that there should be no financial liability to the government.

The committee accorded approval of the revised summary submitted by the Power Division. During FY18, 280 MW of wind power has been added to the NTDC's system, for a total wind-based power of about 1,078 MW in the system. The energy generated by wind based power plants during FY18 has been noted at 2,140 GWh - increase of 293 GWh over the previous year. The additions of wind power capacity include 30 MW Tapal Wind Energy, 50 MW Artistic Wind Power, 50 MW Hawa Energy, 50 MW Jhampir Power, 50 MW Three Gorges Second Wind Farm and 50 MW Three Gorges Third Wind Farm.

During FY18, two solar energy projects have been added to NTDC's network. The total energy through solar has been recorded at 669 GWh for an increase of 34 GWh over the energy generated through solar during FY17. The two new projects are 12 MW AJ Power and 18 MW Harappa Solar.

During FY18, there is an increase of about 20 MW in the installed generation capacity of baggasse based power plants for a total of about 301 MW in the NTDC's system. The new addition is 20 MW Thal Industries Corporation. The energy generated by baggasse based power plants during FY18 has been noted at 1,060 GWh. During FY18, a baggasse/coal fired project namely Fatima Energy Limited generated 21 GWh.

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