8,000MW renewable energy projects dropped

Regulator finds serious flaws in DISCOs’ power acquisition plan

ISLAMABAD:

Power distribution companies (DISCOs) have abandoned cheaper, renewable energy projects of 8,000 megawatts as serious flaws have been found in the proposed electricity acquisition plan.

The flaws in the five-year power acquisition plan, meant to purchase electricity from clean energy plants, were pointed out by the National Electric Power Regulatory Authority (Nepra) and different stakeholders at a public hearing on Tuesday.

It was highlighted that the plan did not mention the impact of electricity tariff on consumers. DISCOs had submitted the most confused power acquisition plan that left the regulator perturbed, they said.

The regulator, while taking a briefing from the representatives of DISCOs, could not get key points of the plan.

It was noted that under the Indicative Generation Capacity Expansion Plan (IGCEP), the renewable energy projects of 8,000MW had been approved, but those plants were dropped by DISCOs in the power acquisition plan for financial year 2022-23 to FY 2026-27.

The plan did not address issues of electricity evacuation and system constraints.

Officials of DISCOs said that at present installed electricity generation capacity stood at 43,000MW, which would jump up to 51,000MW in the coming years.

They contended that DISCOs had included in the plan only the electricity that would be procured from the contracted power plants. According to the presentation, it did not include the electricity generated by the Kapco power plant.

However, when asked by the regulator, they said that electricity would be procured from Kapco as well.

Nepra was of the view that DISCOs had significantly deviated from the IGCEP that had already been approved. It said that the IGCEP proposed the addition of 8,000MW of electricity but it was not included in the power acquisition plan.

There were visible gaps in the plan and the system operator was not consulted, it said.

The responsibility of the system operator is to assess as to which plants should be operated to ensure reliability and stability of the power system. It even runs power plants out of the merit order to stabilise the system.

“We need to accept the request of the system operator and DISCOs should take up projects to ensure reliability,” noted Nepra.

Nepra officials said that if the power acquisition plan was not synced with system reliability, chronic constraints would emerge.

It was observed that in Lahore and Faisalabad, furnace oil-based power plants were being run to stabilise the system, which could be termed deficiency of the system.

DISCOs’ officials argued that the power acquisition plan was based on the new IGCEP, which was being finalised. They added that the old IGCEP was based on inflated GDP whereas the power acquisition plan was being proposed in line with new forecasts.

It was further informed that the new IGCEP would be based on the demand of DISCOs.

However, Nepra officials stressed that the IGCEP was binding while running the system, adding that they needed to tell people about the impact of power acquisition plan on end-consumer tariff.

“Who will pick the cost of new power acquisition plan,” questioned Nepra. “Can DISCOs pick up the cost and will you come for fuel cost adjustment,” it further asked, adding that how the regulator could approve the plan without assessment of the end-consumer tariff.

Senator Nauman Wazir underlined the need for DISCOs to tell about the growth in electricity consumption over the past two years.

DISCOs had no data of off-grid solarisation and the impact of Competitive Trading Bilateral Contract Market (CTBCM) had not been included in the plan, he said.

The senator added that DISCOs also did not know about actual acquisition of electricity under the proposed plan.

Another intervener said that the presentation given by DISCOs revealed that they lacked the capacity to calculate the impact of the power acquisition plan.

Published in The Express Tribune, October 25^th, 2023.

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