The Cabinet Committee on Energy (CCOE) has endorsed and recommended the National Electricity Plan and Indicative Generation Capacity Expansion Plan (IGCEP) for presentation to the cabinet.
The CCOE meeting was chaired by Federal Minister for Planning, Development and Special Initiatives Asad Umar in Islamabad on Thursday. The Power Division presented the summaries of the National Electricity Plan 2021 and IGCEP.
The committee endorsed and recommended the National Electricity Plan and IGCEP for presentation to the cabinet. The Ministry of Energy was advised to include the opinion of the Law Division on certain observations raised by the participants during the meeting. Umar said that the policy and the plan will provide the basis for a sustainable competitive electricity market in the country.
The cabinet body was informed that the National Transmission and Despatch Company (NTDC) was mandated for preparation of IGCEP on an annual basis for review and approval of the National Electric Power Regulatory Authority (Nepra), under the provisions of the Nepra approved grid code. The NTDC prepared the IGCEP 2047 and submitted the same to Nepra on April 20, 2020.
Nepra conducted public hearing on the submitted IGCEP on July 15, 2020 as part of the review and approval process. After the hearing Nepra returned the IGCEP to NTDC on August 20, 2020 with certain directions for changes in the IGCEP report, accordingly, NTDC responded to Nepra on September 4, 2020 and communicated consent to manage quick compliance, seeking clarity on certain directions and requested Nepra to review certain directions which contradict with the ARE Policy 2020, CCOE decision dated April 4, 2020 and/or certain provisions of the grid code.
The wholesale generation cost accounts for 80-85% of the end consumer costs. Therefore, the generation planning needs a clear roadmap.
The IGCEP is a 10-year plan to be updated on an annual basis and is required to be submitted by NTDC to the regulator by April 15 every year under regulatory framework to limit the impact on the end-consumer tariffs by CPPA-G over the horizon of 10 years. Since the exercise for preparation of the plan for the year 2020 (for a 27-year period) has not reached fruition so far, it is proposed that the exercise should be abandoned and a new exercise for the year 2021 may be initiated.
The Power Division is also of the view that the assumptions underlying the preparation of IGCEP 2021 for the next 10 years need to be approved by the CCOE and ratified by the cabinet before its preparation. This is necessary because the assumptions reflect certain policy principles and impact the cost of generation through the upcoming projects and set the direction of the generation side of the power sector for future.
Accordingly, the Power Division, in consultation with NTDC, proposes a set of policy assumptions for preparing IGCEP 2021 for consideration of CCOE. After approval of CCOE and ratification by the cabinet, directions will be issued to NTDC to prepare the plan.
These policy assumptions would be fed into the tool to be used for the generation of the plan and would serve as constraints while determining the prioritised list of power projects.
Published in The Express Tribune, April 23rd, 2021.