Benchmark rate: NEPRA approves tariff for wind power projects

Investors encouraged to borrow from foreign banks.


Zafar Bhutta October 06, 2011

ISLAMABAD:


In order to attract investment in the energy sector, the National Electric Power Regulatory Authority (Nepra) has set upfront tariff for wind power projects along with cutting down paper work.


Upfront tariff of Rs12.61 per unit has been determined for wind power plants that will be set up with a loan from Pakistani banks in rupee and Rs17.28 per unit for plants that will use loans in dollar from foreign banks.

Upfront tariff is the price Central Power Purchasing Agency (CPPA) will pay to purchase electricity from wind power plants.

This upfront tariff will be applicable to those wind power projects of 1,500MW that would be commissioned first.

This incentive will also be given to those investors who will be able to meet all conditions of setting up wind power plants till December 2012 and remain effective for 20 years.

The decision will stop the time consuming process of wind power companies going to Nepra for tariff determination, an official said.

The government plans to generate 1,500MW through wind power by the end of next year.

Independent power producers have also asked for an upfront tariff as currently each power producer is given a different rate.

Under upfront tariff mechanism, the role of Nepra has been minimised. The period of setting up a wind power plant will also be reduced from existing three to two years.

Wind power projects of at least 1,000MW are expected to be commissioned in Sindh with projected investment of $2.5 billion.

Gharo wind corridor in Hyderabad has the potential to generate 50,000MW, according to Alternative Energy Development Board data. Around 30,000 acres of land has been allocated for wind power plants in the area.

At present, nine companies are working on setting up 50MW wind power plant each to generate 450MW with financial close expected by the end of 2011.

The government also hopes that Norwegian company NBT will set up plants to generate 250MW to 500MW in Sindh after upfront tariff has been announced. The company has also signed an agreement with Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST) for a 50MW wind power plant.

Published in The Express Tribune, October 7th, 2011. 

COMMENTS (3)

Absar | 12 years ago | Reply

Why should the price of electricity go up? Wind is the cheapest souce of energy. Even if the price is between Rs 3 to 5 per unit, the payback period would be much less than the other conventional ways of generating electricity such as Hydroelectricity.

Need more wind power projects. But the purpose should not just be to provide electricity. Cheap electricity is the reason why every one eyes at renewable energy, apart from the benefit of less carbon footprints.

Zain Kamran | 12 years ago | Reply

A project which should have been built decades ago.... wind power is cheap! and we expect it to be cheaper than that of burning oil and gas!

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