ISLAMABAD, March 12: The issue of unresolved tariff is forcing private energy producers to avoid investing a promised $5 billion in wind, solar, micro-hydel, waste and biogas technologies to help tide over the energy crisis in the country.
Informed sources told Dawn that officials of the Alternative Energy Development Board (AEDB) had informed the authorities that no project was likely to be set up over the next two years because of several reasons, including a dispute over the tariff issue.
The AEDB had issued 92 Letters of Intent (LoIs) for generating 275MW of electricity from different technologies. But the tariff issue and some administrative problems concerning the National Electric Power Regulatory Authority (Nepra) and the National Transmission and Dispatch Company (NTDC) of Wapda have not been solved.
The sources said that investors had not yet acted on the LoIs issued to them. And Nepra is reported to have refused to offer more than 16 cents for a kilowatt demanded by the investors.
While Nepra is not prepared to offer what is being called a ‘fair tariff’ to the investors in wind power and other sources of energy, bureaucratic hurdles allegedly created by the NTDC were causing further delay.
As a result, the Pakistan Atomic Energy Commission (PAEC) has been asked to initiate new projects to generate 8,800MW energy by 2030. But the PAEC has reportedly expressed its inability to do so saying that China continues to delay in providing four to six nuclear power plants as agreed earlier, because of pressures from a 38-member nuclear supplier group which is acting in line with the directives of the United States.
According to PAEC officials, Chashma-1 was generating 325MW of nuclear energy and Chashma-2 of the same capacity would be commissioned in 2011. Its Karachi nuclear power plant of 137MW has completed its lifespan and is generating only 90MW.
An AEDB official, who did not want to be named, said the organisation was not an implementing or executing agency. It was there to facilitate investments in renewable energy. He said that not a single project out of the 92 LoIs issued could be set up because of differences between Nepra and the NTDC and between them and investors.
He said that a feasibility study of eight wind-power projects had been sent to Nepra. It was then sent to the NTDC for determining a power purchase agreement. “Four of the eight IPPs have refused the tariff offered to them as being low,” he said.
The official said that global demand for wind turbines was rapidly increasing and by the time Nepra determined a tariff and a power purchase agreement was prepared by the NTDC, the price would further go up. “It takes 18 to 24 months for the financial close of any project and this is not the way to attract investors to in our part of the world,” he added.
