National Electric Power Regulatory Authority (Nepra) on Monday witnessed a heated debate on Request for Proposals (RFP) for establishment of 600-MW solar power plant by the federal government at Muzaffargarh and Sindh government; Nepra feared that the period of 25 years for the project life is too long.
Both the hearings were officiated by Chairman NEPRA, Tauseef H Farooqi; Member Sindh, Rafique Ahmad Shaikh; Member KP, Maqsood Anwar Khan and Member Balochistan, Mathar Niaz Rana.
Power Division was represented by Additional Secretary, Zafar Abbas; CEO, Alternative Energy Development Board (AEDB) Shah Jahan Mirza, representatives of KP Government, Sindh Government and Punjab Government. Moreover, interveners and common citizens also shared their views on the proposed RFPs.
KP Government represented by Barrister Asghar Khan and Punjab government by Ms Sania opposed the approval of RFP of federal government in its present form. Both were of the view that since present proposed RFP of solar projects is an alternative in the decision of Council of Common Interests (CCI), it must be approved by the CCI. However, CEO, AEDB clarified that since it is approved by the competent forum after seeking clarification of Ministry of Law and Justice, there is no need to seek its approval from any other forum. His viewpoint; however, was not supported by his opponents despite the fact it was duly recommended by the EAD Board unanimously.
Both provinces are represented at the Board. Transfer of land after the project completes its life also came under discussion.
The issue of 75 percent indexation by the federal government and confused stance of Sindh’s 100 percent indexation for its solar projects was also debated. Confusion was witnessed in the respective viewpoints of CEO AEDB and representative of Sindh government on different issues.
Chairman Nepra directed Case Officer, Nepra to sit with Sindh government and clear things within a week. CEO, AEDB stated that he thought the issues are settled but the stance by Sindh government indicates that things are at the beginning stage.
During the hearing, discussion was also held on mode of project, i.e., BOOT or BOO. It was stated by Federal and Sindh Government that their projects would be based on BOOT (Build-Own, Operate and Transfer).
On one occasion Chairman Nepra commented sarcastically: “there is a lot of talk of ‘boots’ in Pakistan,” a remark visibly enjoyed by all participants in Nepra hall and those who were on video link.
Member Sindh, in his remarks stated that the Authority would not allow Sindh government to recover the cost of the project from consumers.
Member Balochistan, Mathar Niaz Rana proposed that a committee of Nepra officials dealing with financial matters be constituted to evaluate forex impact of solar projects throughout their operational lives. He added that it should be ensured that the solar project not become a payment issue like IPPs.
“We need to see a broader picture. Discussions have started since morning, I fear we will also make renewable energy a forex burden as indexation is being sought in everything. A committee must be formed to advise the Authority on long-term impact of such decisions. Do we have enough resources to clear payment for renewable energy projects like the IPPs? It is not so simple that we have to do it at all cost. We need some educated input,” he said.
Chairman Nepra made it clear that there are a number of ways to stop such projects but the Authority favoured a best techno-commercial decision which was the best in the national interest.
He further stated if new resource of cheap electricity is found, then decision on solar will be worse even sugar coated in any way as “we would lock ourselves for next 25 years.”
To a question, Additional Secretary, Power noted that the government is evaluating category –III projects and will update the regulator.
