ISLAMABAD: The Pakistan Atomic Energy Commission (PAEC) has sought about Rs14.5 per unit (7.87 US cents per unit) levelized tariff for 40 years for its second mega Nuclear Power Plant (NPP) of 1100 megawatts at Karachi (K-3).
The plant (K-3) is second of the series of two 1100MW each nuclear plants and is currently in testing phase sending out about 1050MW electricity to the national grid.
The first of the series K2 is already commercially operational with average capacity payment price of Rs10 per unit and fuel cost of about 93 paisa per unit.
According to tariff filed before the National Electric Power Regulatory Authority (Nepra), the PAEC has claimed the total project cost of Rs723 billion, including engineering, procurement and construction (EPC) cost of Rs554.2bn and Rs66bn of non-EPC cost. The project has claimed interest of about Rs95bn during construction.
PAEC claims project will cost Rs723 billion
It said the project cost excluding interest during construction and financing fee had worked out at $3,670 per MW and it would have installed capacity of 1100MW or 1017MW of net output.
Nepra had issued a generation licence to K-3 plant in February 2021. The plant was completed in 97 months and is currently in post-synchronisation phase. The project involves 81pc debt and 19pc equity.
The interest on foreign debt ranged between 1 and 6pc and local financing cost of Kibor plus0.5pc per annum. The debt repayment period is 6 to 12 years and rate on equity of 14.5pc on internal rate of return in Pakistan currency is assumed over the 40 year life of the project. As such, redemption of equity is targeted in 28 years from year 13 to 40.
The reference exchange rate for the tariff has been assumed at Rs153.60 against dollar and Rs23.50 against Chinese renminbi. The project life is extendable to 60 years. The fuel cost of K-3 at 93 paisa per unit has been assumed slightly higher than 92 paisa per unit for K-2.
The petitioner has claimed total capacity payment price of 7.8697 cents per unit levelized over 40 years. Worked out at Rs153 per dollar, the CPP has been worked out at Rs14.67 per unit for first six years, followed by Rs14.21 per unit for 7-12 years and then 6.53 per unit for years 13 to 40.
The plant was connected to the national grid and its 1,100-megawatts generation capacity had achieved criticality on Feb 21 this year and was undergoing certain safety tests and procedures before it could finally be connected to the grid on commercial grounds
K-3 is the second NPP in Pakistan with the generation capacity of 1,100 MW and its addition to the national grid is expected to help reduce electricity tariff in the country, the PAEC said. The plants have been developed with the Chinese support.
K-3 is one of the two similar NPPs located near Karachi. The other one, named K-2, was inaugurated by Prime Minister Imran Khan on May 21 last year. The groundbreaking of both the units (K-2 & K-3) was performed by then prime minister Nawaz Sharif in November 2013.
The construction of K-2 and K-3 was started in August 2015 and May 2016, respectively, after approval of the Pakistan Nuclear Regulatory Authority (PNRA). The fuel loading of the plant (K-3) started in December 2021 after getting clearance from the PNRA.
The PAEC is now running six NPPs in the country. Two of them are located in Karachi, while four in Mianwali district — Chashma Nuclear Power Plant Unit 1-4. Earlier, the collective generation capacity of all PAEC-operated NPPs was over 2,400 MWs.
The addition of K-3 in the national grid will enhance the generation capacity of nuclear power plants in the country to over 3,500MW, substantially improving the overall share of nuclear power in the energy mix. The K-2 project had started operations in December 2020.
Published in Dawn, April 9th, 2022