Alternative energy: NEPRA sets upfront tariff for coal-fired power plants

Under new regime, tariff is determined within 10 days of filing an application.

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Friday reached a ground-breaking decision and approved the upfront tariff for the first three coal-fired power plants – two of 660 megawatts and one of 150MW installed capacity.

This determination was reached in accordance with Section 31 of Sub-section (4) of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 read with Regulation 3 of the Upfront Tariff (Approval & Procedure) Regulations, 2011.

Nepra says it has introduced a new regime of upfront tariff according to which tariff is determined within 10 days of the admission of application.

In order to arrive at the upfront tariff, the authority has gone through a rigorous process as provided in the Nepra Upfront Tariff (Approval and Procedure Regulations 2011) and Nepra Tariff (Standard and Procedure Rules 1998).

Nepra says it takes all major decisions after going through a mechanism of public hearing where comments and views are invited from the general public and other stakeholders.

As an autonomous regulator of the energy sector, the authority says it has to take into account the interest of all stakeholders, though the general consumer protection remains the main priority of the regulator.

The application of the Port Qasim Electric Power Company for an unconditional acceptance of upfront tariff for its two coal-fired power projects of 660MW each and Grange Power Limited for its 150MW (net) coal-fired power plant were accepted and levelised tariffs of 8.3601 cents and 8.6417cents respectively were approved.

The coal-fired power plants are aimed at utilising the indigenous coal reservoir of Thar, while ensuring compliance with international environmental standards and obligations.

This factor would ensure the national energy security in the future. The coal-fired power plants are a step in the right direction for self-reliance in energy and for generation of affordable electricity and to increase diversification in power generation.

They are important for overcoming the energy crisis in the short term and would contribute towards economic sustenance. The interest in coal plants reflects the investor confidence in Nepra’s tariff determination, consequently mitigating the power crisis in the country.

Published in The Express Tribune, February 14^th, 2015.

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