Private sector to invest in power transmission lines
NEPRA gives licence to a company for laying a 37km transmission line.
NEPRA gives licence to a company for laying a 37km transmission line. STOCK IMAGE
ISLAMABAD:
The National Electric Power Regulatory Authority (Nepra) has cleared the way for private-sector investment in laying power transmission lines with the grant of a special purpose licence to Fatima Transmission Company for building and running such facilities.
“Nepra has taken a big step to encourage the private sector and other entities to invest in an area which is inherently considered a public-sector domain, by granting the first special purpose transmission licence to a private enterprise,” the regulator was quoted as saying in a press release issued on Tuesday.
Under the licence, Fatima Transmission Company will construct and own transmission facilities. It will lay a 37km transmission line for the supply of 120 megawatts from power generation facilities to bulk consumers.
Nepra stressed that its initiative was in line with the objectives of reforms undertaken in the power sector, which was approved by the federal government in 1992 to bring efficiency and encourage competition with the unbundling of public-sector enterprises.
Though state enterprises are primarily responsible for developing extra high-voltage (66,000 volts and above) transmission facilities, they could not upgrade and develop the system according to required reliability levels, leading to severe bottlenecks and congestions.
As a consequence, not only power plants were forced to operate without merit, but also major breakdowns occurred.
With the addition of new power generation plants over the next four to five years, the National Transmission and Despatch Company (NTDC) will be required to transmit a large volume of electricity.
Since the laying of new extra high-voltage transmission lines is highly capital-intensive, the NTDC in all likelihood will not be able to meet such huge funding needs.
It will also be difficult for the government to pump massive investments into the transmission network because of financial constraints and operational issues. The Nepra Act allows that in addition to the NTDC, other entities including the private sector can construct, own and operate transmission facilities for providing interconnection services to the NTDC and others.
A special purpose transmission licensing regime will not only enhance the existing capacity, but will also result in installation of new transmission infrastructure. It will create avenues for private-sector investment, which could be made for mutual contracts between the supplier and the consumer or for providing services to the NTDC.
This initiative is expected to revolutionise the power sector by significantly reducing bottlenecks in the transmission network. It will also enable the government to overcome acute power shortages and permit private-sector players and entrepreneurs to play their role more effectively in developing the energy sector.
With the timely laying of transmission lines, power generation companies will be able to supply electricity in an efficient manner, reduce line losses and operational and management costs. Through such initiatives, the country will gradually develop an efficient transmission and distribution system.
Published in The Express Tribune, August 19th, 2015.
The National Electric Power Regulatory Authority (Nepra) has cleared the way for private-sector investment in laying power transmission lines with the grant of a special purpose licence to Fatima Transmission Company for building and running such facilities.
“Nepra has taken a big step to encourage the private sector and other entities to invest in an area which is inherently considered a public-sector domain, by granting the first special purpose transmission licence to a private enterprise,” the regulator was quoted as saying in a press release issued on Tuesday.
Under the licence, Fatima Transmission Company will construct and own transmission facilities. It will lay a 37km transmission line for the supply of 120 megawatts from power generation facilities to bulk consumers.
Nepra stressed that its initiative was in line with the objectives of reforms undertaken in the power sector, which was approved by the federal government in 1992 to bring efficiency and encourage competition with the unbundling of public-sector enterprises.
Though state enterprises are primarily responsible for developing extra high-voltage (66,000 volts and above) transmission facilities, they could not upgrade and develop the system according to required reliability levels, leading to severe bottlenecks and congestions.
As a consequence, not only power plants were forced to operate without merit, but also major breakdowns occurred.
With the addition of new power generation plants over the next four to five years, the National Transmission and Despatch Company (NTDC) will be required to transmit a large volume of electricity.
Since the laying of new extra high-voltage transmission lines is highly capital-intensive, the NTDC in all likelihood will not be able to meet such huge funding needs.
It will also be difficult for the government to pump massive investments into the transmission network because of financial constraints and operational issues. The Nepra Act allows that in addition to the NTDC, other entities including the private sector can construct, own and operate transmission facilities for providing interconnection services to the NTDC and others.
A special purpose transmission licensing regime will not only enhance the existing capacity, but will also result in installation of new transmission infrastructure. It will create avenues for private-sector investment, which could be made for mutual contracts between the supplier and the consumer or for providing services to the NTDC.
This initiative is expected to revolutionise the power sector by significantly reducing bottlenecks in the transmission network. It will also enable the government to overcome acute power shortages and permit private-sector players and entrepreneurs to play their role more effectively in developing the energy sector.
With the timely laying of transmission lines, power generation companies will be able to supply electricity in an efficient manner, reduce line losses and operational and management costs. Through such initiatives, the country will gradually develop an efficient transmission and distribution system.
Published in The Express Tribune, August 19th, 2015.