Nepra advises producers to install solar-wind hybrid plants

Updated February 10, 2020

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Consultative session with all stakeholders arranged. — Reuters/File
Consultative session with all stakeholders arranged. — Reuters/File

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has advised the wind power producers (WPPs) to explore the possibility of utilising their sites and available land to set up solar-wind hybrid power projects with an eye on augmented capacity and to make their product economical.

This has been proposed by the regulator to the existing WPPs facing their load curtailments by the power operators — National Transmission & Dispatch Company (NDTC) and National Power Control Centre (NPCC) — because of their relatively higher tariff and substantial surplus capacity available in the base load and conventional power supplies — oil, gas and coal, etc.

Sources said Nepra had recently arranged a consultative session with all the stakeholders, including WPPs, NTDC and NPCC, for a way out of the current imbroglio as many of these projects were contracted under a higher tariff regime of the 2006 policy before the alternative energy technologies started to come down in the market.

The regulator has now suggested that hybrid retrofit of existing WPPs was feasible since the land for WPPs was allocated in blocks and large unutilised acreage was still available for solar photovoltaic installations. Also, the existing grid and evacuation infrastructure could also be utilised for this hybrid arrangement.

Consultative session with all stakeholders arranged

It has been argued that since some of these WPPs already had Letters of Intent (LoIs) for solar power, the concession documents for the existing project may require only a few amendments. If such hybrid retrofits are implemented, it will ease the non-project missed volume (NPMV) payment burden on the Central Power Purchasing Agency (CPPA) and will also result into lowering of tariff for consumers.

The sources said Nepra assured the sponsors of WPPs that it would support existing renewable projects to ensure that new investments required to meet the aggressive targets contemplated under the new Alternative and Renewable Energy (ARE) Policy, 2019, were facilitated since their capacity was just a fraction of the country’s total generation capacity and the future targets set under the ARE Policy and would not have any significant impact on the average national tariff.

Under the ARE Policy 2019 yet to be formally approved by the Council of Common Interests (CCI), the government has targets of 20 per cent (8,000 MW) by 2025 and 30pc (20,000 MW) by 2030 of total power generation from alternative and renewable resources.

The regulator has also asked the NPCC and CPPA to look into the possibility of allowing these projects to operate at the threshold level of 31pc and 35pc annual plant factors, as envisaged in their respective approved tariffs to ensure their ability to meet the debt servicing and other operations and maintenance costs were met and protect them from default to banks.

It has been observed that the world’s energy-mix was changing rapidly to give priority to cleaner and renewable energy technologies to counter the looming threat of climate change. The global power generation capacity will shift from its present 57pc fossil fuel base to 66pc renewables by 2050. The additional 12,000 GW generation capacity will require an investment of $13.3 trillion by 2050. Of this, 77pc is estimated to go directly to renewable power production and energy storage technologies.

Nepra has taken a suo motu notice of recent reports that WPPs, mostly at Jhimpir-Thatta, were being subjected to load curtailments by power operations leading to their financial problems. As many as 14 projects were developed under the government’s 2006 policy.

The regulator has acknowledged the pioneering role played by the first stream of WPPs during 2014-17 under the ARE Policy, 2006, and noted that the low tariffs achieved in the last round were only possible after the bankable template provided by these WPPs to the local and international financiers.

Published in Dawn, February 10th, 2020