LAHORE: The recent amendments to the 2006-renewable energy policy and announced by the Ministry of Energy (Power Division) on Jan 5, following the cabinet committee on energy (CCE) decision has finally closed chapter of several small hydropower projects (SHPPs) in provinces as well as the Azad Jammu & Kashmir (AJK).
The move has affected one such project of the total projects on which about 50pc work has been completed after power purchase consent received by the sponsors from the Central Power Purchase Agency (Guarantee) Limited (CPPA-G) and the Peshawar Electric Supply Company (Pesco).
One of the amendments, related to the small projects, was made after the CPPA-G finally asked the power division to review policy framework afresh for consent of power and energy purchase agreements in connection with the SHPPs in AJP and provinces which are total 76 in number, including 16 in AJK, 40 in Khyber Pakhtunkhwa, 19 in Punjab and one in Sindh, according to documents.
The amendment is being considered as withdrawal of the CPPA’s earlier consent of power purchase given to a couple of SHPPs, especially the 7.08MW Riali-II in Muzaffarabad, leaving no option to the sponsors but to stop doing further works on their own expenses (equity) since none of the banks would finance the project due to unavailability of the implementation agreement (IA) and the energy purchase agreement (EPA) that are yet to be signed by the power division, CPPA-G and the sponsors.
“The situation turned to be embarrassing for the federal minister after some of the participants in a meeting of the Private Power & Infrastructure Board (PPIB) board of directors held on Thursday (Jan 11) expressed anger, calling it discrimination against the provinces,” said an official of the ministry who was present on the occasion.
The official said the AJK, KP and Sindh are of the view that lifting of a ban on the imported fuels for a Punjab government’s another liquefied natural gas-based power plant damaged the SHPPs after the government refused to purchase power from them due to surplus scenario foreseen by the government.
According to a recent letter, the CPPA-G told the power division that development of small hydropower projects (up to 50MW) in private sector in AJK facilitated by the government of AJK was acknowledged by all concerned. The letter recalls a meeting of Oct 29, 2013 presided over by the then minister for water and power and subsequent follow-up meetings held at the PPIB headquarters on April 10, 2014 and July 23 regarding evacuation of power and execution of Power Purchase Agreement for Small Hydropower Projects up to 50MW in provinces/AJK’ wherein it was decided that for such projects, a three-party power/energy purchase agreement on take-and-pay and must-run basis would be executed amongst CPAA/NTDC (National Transmission & Dispatch Company), project company and respective power distribution company with well-defined rights and obligations of each party. This policy decision occurred prior to operationalisation of CPPA-G.
The letter mentions that for power generation from renewable energy sources, the National Electric Power Regulatory Authority (Nepra) issued (Sale of Electric Power by Renewable Energy Companies) Guidelines, 2015. After operationalisation of CPPA-G Guidelines/ SOPs for procurement of power under Nepra guidelines have been framed by CPPA-G on May 31, 2016. Under these guidelines/ SOPs, tripartite Energy Purchase Agreements is stipulated effective July, 2017. As such draft Standard Tripartite Energy Purchase Agreement has also been approved by ECC of the Cabinet. Moreover, Nepra issued (Import of Power) Regulations 2017 in June, 2017 for import of electric power from other countries and generation facilities located in AJK and Gilgit-Baltistan.
It states that at present power procurement by the distribution company (Disco) or CPPA-G is pursuant to Power Acquisition Program under Nepra Interim Power Procurement (Procedures and Standards) Regulations, 2005 and following demand-forecast at Disco level under Distribution Code in integration with supply-demand analysis and Indicative Generation Capacity Expansion Plan (IGCEP or NTDC Plan) maintained at central level by Power System Planning, NTDC under Grid Code, Section PO-4.
“In view of the existing Nepra regulations and roles defined before and after operationalisation of CPPA-G, it is imperative to review afresh policy framework for consent of power and energy purchase agreements in respect of small hydropower projects in AJK/ provinces, please,” reads the letter written by the CPPA-G to power division on Dec 12, last year.
Published in Dawn, January 18th, 2018