ISLAMABAD:
In a desperate attempt to overcome the persistent power crisis, the government is working on a plan to set up power plants near various gas fields to address the concern.
The proposed plan aims to enhance generation in order to curb power shortfall that ranges between 3,000 to 7,000 megawatts (MW). The country has been facing an acute shortage of electricity which stunts growth by around 3% every year, causing a huge number of industrial units to shut operations.
Official sources in the Ministry of Water and Power told The Express Tribune that the proposed policy to this effect will be presented to the Economic Coordination Committee (ECC) or the Council of Common Interest (CCI) for approval.
They said that for a continuous gas supply, the Ministry of Water and Power, along with the Petroleum Ministry, has agreed to set up power plants at various gas fields.
“Both ministries have agreed to carry out the bidding process for setting up power plants at the sites of the gas fields,” sources said, adding that the petroleum ministry would provide the specifications.
They said that the Private Power Infrastructure Board (PPIB) would carry out the bidding process subject to meeting legal requirements. A preliminary study including interconnection studies will be carried out by the power producer in consultation with the energy buyer.
The request for proposal shall be prepared in consultation with all the stakeholders including the respective distribution companies, which would then be approved by the National Electric Power Regulatory Authority (Nepra).
The concerned power distribution company (Disco), under whose jurisdiction the power plant will be located, shall sign the Energy Purchase Agreement (EPA) with the power producer.
The officials said that the EPA would be based on a take-and-pay basis (immediate cash payment method in order to avoid adding to the circular debt), tariff would be a single composite one without any capacity or fixed charges and Nepra shall provide a draft for a short and simplified EPA.
“There will be no contractual concessions or guarantees in the form of implementation agreement, or the sovereign guarantee by the government of Pakistan,” officials said, adding that the power regulator will determine and provide the benchmark tariff/reserve price prior to the issuance of the request for proposal to the bidders.
They said the payments to power producers would be either secured through an escrow arrangement, assignment of earmarked Disco receivables or some other priority payment arrangements.
“Nepra will issue generation licences and the approval of tariffs through international competitive bidding within 15 and 10 days, respectively,” officials said. “This proposed scheme of arrangement would be approved by the ECC or the CCI.”
A steering committee comprising officials of the power regulator, ministry of petroleum and other concerned departments of the power sector have been formed to work out the modalities for the transparent procurement of power from the proposed plants.
Published in The Express Tribune, October 31st, 2014.
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