Pakistan's energy committee calls for review of bagasse electricity pricing

Bagasse power plants in Pakistan face pricing issues, with no clear mechanism for determining rates, officials say.

The Senate Energy Committee, chaired by Senator Mohsin Aziz, has revealed discrepancies in the pricing of electricity generated by bagasse power plants, with no official mechanism in place to determine the rates.

During the meeting, Senator Mohsin raised concerns over the wide variation in bagasse pricing, questioning how some plants valued it at $356 per tonne while others set it at $75.

The Chairman of the National Electric Power Regulatory Authority (NEPRA) explained that while the government introduced a framework for bagasse and biomass in 2013, there is still no system to regulate bagasse pricing in Pakistan, unlike in India.

According to NEPRA’s chairman, electricity produced from bagasse plants running on furnace oil costs Rs 23.52 per unit, while on gas it costs Rs 8.1 per unit, and on imported coal Rs 5.77 per unit.

The absence of a pricing mechanism for bagasse has left the sector in limbo.

He stressed that bagasse is a local raw material and should have a fixed price, adding that the by-product of sugarcane, which is also sold by mills, has a market value.

He questioned why the cost of electricity has risen despite bagasse prices remaining relatively stable.

The Senate Energy Committee has proposed a review of bagasse pricing to address the discrepancies and establish a clear mechanism.