Fresh projects put on hold till finalisation of power capacity expansion plan

Updated 02 Jul 2020

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The Integrated Generation Capacity Expansion Plan (IGCEP) is a policy document prepared by the NTDC under which future generation capacity expansion should take place in various fuel and technology categories on the basic principle of least cost. — AFP/File
The Integrated Generation Capacity Expansion Plan (IGCEP) is a policy document prepared by the NTDC under which future generation capacity expansion should take place in various fuel and technology categories on the basic principle of least cost. — AFP/File

ISLAMABAD: Rebuffing the power regulator’s advice, the Power Division on Wednesday put on hold making fresh commitments for new power projects until a consensus is reached on the country’s first Integrated Generation Capacity Expansion Plan (2020-2047) awaiting approval of the National Electric Power Regulatory Authority (Nepra).

“It would not be proper or in the national interest to go back to the old system of process of projects, and adding to the capacity and cost of electricity through a non-transparent mechanism”, the Power Division wrote to Nepra and concerned entities including the National Transmission and Despatch Company (NTDC), Private Power & Infrastructure Board, Central Power Purchasing Agency and Alternative Energy Development Board.

The Integrated Generation Capacity Expansion Plan (IGCEP) is a policy document prepared by the NTDC under which future generation capacity expansion should take place in various fuel and technology categories on the basic principle of least cost.

It was submitted to Nepra on April 20 for approval.

In a rather unusual move, Nepra had asked these entities on June 19, even before completing the consultative process, that the long-term energy plan in its present form could not be implemented and hence, until and unless the proposed plan is approved it should be considered business as usual and no letter of interest, letter of support and tariff notification should be held-up because “perfection is more critical than doing it in a haste”.

The regulator had said that after preliminary review of the plan it was “of the considered opinion that the submitted version of the IGCEP will require a significant improvement to make it an acceptable document”.

This advice did not go well with the Power Division which believed the regulator’s role began with licencing and tariff setting and beyond while it was the federal government’s domain to formulate policies in the best interest of the country and consumers, keeping in mind socio-economic factors and promotion of various technologies and businesses.

The Power Division told Nepra that the NTDC with the support of the government and development partners had developed the first IGCEP document and submitted it to the regulator for approval.

However, given that it was the first such document, stakeholders’ input and objections on the data, assumptions and outcomes of that exercise were of paramount importance and need to be objectively considered and identified at the regulator’s level.

The Power Division emphasised that all national institutions should work towards planning “all future generation transparently and on least cost basis in a scientific and objective manner, rather than relapsing into the previous arbitrary and cost ineffective mode”.

It said it was “the present government’s top priority to ensure that future power generation should be affordable for the consumer and the IGCEP was the main tool to achieve this objective”.

Therefore, all national entities need to be objective and criteria based under the overall guidance provided by Nepra and rectify such loopholes which may be identified through a consultative process at the national level.

“Any modification or change that needs to be inculcated at the policy level, would be referred to and considered on the government’s side, once a consensus is achieved between all stakeholders through Nepra.”

Among other things, Nepra had pointed out that the IGCEP had proposed the 4,500MW capacity induction from $14 billion Diamer-Bhasha dam after 2043 even though the project was targeted for completion by the government in 2027-28 with public sector investment.

“This is just one example, which is not plausible. However, there seem to be many other obvious cases similar to this, which require explanation and probable correction”, Nepra said.

The Power Division, however, believed Nepra should at least begin the consultative process to remove deficiencies if any and reach consensus on the long-term plan as early as possible while there was still surplus capacity available before the next emergency situation.

The regulator said it had already started the consultative process by seeking comments from stakeholders including the provinces, experts and the general public.

“In this respect, the authority is appalled once again on receiving serious concerns and reservations from various stakeholders, especially from the provinces that their proposed projects either have been ignored completely or have been considered very late in making these practically unviable plan for any future consideration”, the regulator said.

Published in Dawn, July 2nd, 2020