NTDC blames ‘policy limitations’ for gaps in generation plan

Updated 08 Jul 2020

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The 1,320MW Sahiwal coal power plant is seen in this file photo.
The 1,320MW Sahiwal coal power plant is seen in this file photo.

ISLAMABAD: The National Transmission & Despatch Company (NTDC) on Tuesday blamed the policy and procedural limitations and government entities for certain deficiencies in the 27-year Integrated Generation Capacity Expansion Plan (IGCEP 2020-47).

However, it said the deficiencies in the expansion plan will be fixed during the regulatory scrutiny.

Responding to various interventions made by provincial governments and other stakeholders over the IGCEP 2020-47, contested observations like delay in the Diamer-Bhasha Dam’s (DBD) commercial operations until 2043, the company said the construction on the mega project did not start on Dec 31, 2019 — the data cut-off date for the IGCEP 2047 — according to data provided by the Water and Power Development Authority (Wapda).

Moreover, it said the IGCEP would now be an annual rolling feature and any committed project like the DBD could make its way into the next annual IGCEP due in April 2021 provided its power generation contract is confirmed by Wapda.

Moreover, it said the the power generation project associated with the DBD has not been awarded yet.

“The contract for construction of the dam (not power project), to be completed by 2028, has been awarded on May 14, 2020 more than three weeks after the submission of IGCEP 2047 to the National Electric Power Regulatory Authority (Nepra).

The NTDC, a corporate entity of the Power Division which is also the power system operator, said the PLEXOS energy modelling tool had optimised the DBD with expected commercial operation in 2043 based on the least cost criteria.

It said the plan had presented a number of scenarios including a base case of 5.5 per cent GDP growth for electricity demand including low growth rate of 4.5pc and high growth rate of 6.5pc. It said the International Monetary Fund had projected growth at 2.2pc before Covid-19 and had considered 25pc of total load management, Electric Vehicles Initiative and Naya Pakistan Housing Scheme to comprehensively capture all variances of electricity demand growth in the country.

The NTDC said many stakeholders had also objected to the regulator that the impact of Covid-19 had been overlooked in the IGCEP without realising that the input data was locked much before the first patient was diagnosed with the virus in Pakistan on Feb 26 and obviously the impact of Covid-19 was not catered to in the IGCEP 2047.

“However, the NTDC expects a comprehensive discussion and consultations at Nepra public hearing for consensus on GDP growth and assessment of demand growth during the plan horizon”.

Nepra’s question on how hydropower resources, despite being exploited everywhere on priority basis for being cheaper, renewable, and most importantly providing ancillary services such as frequency control, grid stability, generation option during peak demand and close to zero cost of generation, had been ignored in IGCEP has also been contested by the system operator.

It said the optimisation of power generation had been done based on techno-economic parameters of proposed power plants provided by the relevant project executing agencies. No discrimination has been done with any project or province or project execution entity or technology.

Under complete transparency and stakeholder validation of data, certain hydropower plants fail to meet the requirement of project selection energy model in early years of the planning horizon. However, 10,800MW of hydropower has been proposed in the model to take the total to 20,800MW by 2030.

It said the provinces have questioned the projected life of 30-50 years for hydropower projects, saying the data provided by project execution entities had been used and if they had signed contracts for 25-30 years, it was not possible for the NTDC energy model to assume 70-100 years life for such projects.

Also, all the proposed projects had been treated in line with the definition of ‘Committed’ if it is already under construction or has achieved financial close or has of strategic importance i.e. China-Pakistan Economic Corridor (CPEC) Project or it is a government-to-government project.

Moreover, the IGCEP 2047 has been prepared based on the prevailing policies, grid code and the best international practices pertaining to all generation sources. Optimisation of renewable energy projects in the IGCEP 2047 was also in line with the government’s Alternative Renewable Energy Policy 2019.

It said the KP’s criticism over heavy reliance – 32,967MW – on coal was also not sustainable given that the Thar coal as indigenous resource provided base load capability with high capacity factor and low economic cost. The planning tool had taken care of all such aspects and provided the most optimum solution – thus complementing the energy security through diversity as well as indigenisation.

The NTDC asked stakeholders to focus on the plan horizon up to 2030 – the first ten years for which it has sought approval from Nepra.

Published in Dawn, July 8th, 2020