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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Monday approved a 25-year levellised upfront tariff of 10 cents per unit (kWh) for Municipal Solid Waste-based power generation of a maximum 250MW capacity.

This is the first upfront tariff for power generation through municipal solid waste. The regulator said the special tariff was approved through a consultative process keeping in view the environmental issues caused by abundant municipal waste in the country.

Garbage will be used for a productive purpose and hence the upfront tariff for electricity generation, the Nepra said.

Stakeholders involved in the consultative process included Punjab Power Development Board, Alternative Energy Development Board, CPPA-G, Anwar Kamal Law Associates, Ministry of Petroleum and Natural Resources, and Ministry of Climate Change.

“The levellised tariff of US cents 10/kWh based on 25-years operational period has been announced with overall capacity cap of 250 MW wherein share of each province and Federal Territory have been kept at 50 MW each,” the statement added.

Unlike standard practice, Nepra did not post the tariff determination on its website. Nepra said that Pakistan generally produced roughly more than 20 million tonnes of municipal solid waste with annual growth rate of 2.4 per cent.

All major cities including Islamabad, Lahore, Karachi, Quetta and Peshawar are facing enormous challenges in tackling the problem of urban waste and thousands of people die every year due to waste-related diseases.

Considering environmental issues, most of the countries in the region have already announced the generation tariff for Municipal Waste Power Plants and are getting dual benefits – disposing garbage and generation of electricity through garbage, Nepra said.

It added the initiative regarding Upfront Tariff for Municipal Solid Waste power plants will not only provide electricity to the national grid but will also create employment opportunities and play a role in economic growth of the country.

The assessment of tariff has been made on the basis of project cost of $3.5 million per MW keeping in view the available reference prices in the region. The construction period for such kind of power plants has been fixed at 24 months.

For protection from environmental hazards, the power producer shall obtain necessary approvals from the relevant government agencies. The upfront tariff will be in field for one year.

Published in Dawn, January 16th, 2018