ISLAMABAD, Aug 24: The wind power projects to be set up in the Gharo and Keti Bandar corridor near Karachi would cost 9.5 US cents per unit levelised tariff to the consumers, compared with 4.7 cents per unit of hydel projects that currently face resistance.

Under directives from the government, the National Electric Power Regulatory Authority has given a deadline of December 31, 2006 to give their acceptance for an upfront tariff after making interconnection arrangements with Wapda. The tariff is, however, subject to an aggregated ceiling of 300mw, documents suggest.

The wind power projects have been allowed a tariff of 11.75 cents (about Rs7.05 per unit), for the first 10 years and 3.7 cents (Rs2.2) per unit for the next 10 years. As such the levelised tariff for 20 years of the project life comes to 9.5 cents (Rs5.7) per unit. The tariff has been assumed 97 per cent plant availability, about 12 per cent interest rate and debt-to-equity ratio of 80:20 per cent

Interestingly, the government is promoting much costly thermal power stations instead of much cheaper hydel projects despite the fact that the country has about 28,000mw of non-dam hydro power generation capacity that could be developed as run-of-the-river basis or minor storages. If the power from mega dams is also included, the total hydro power capacity surpasses 40,000mw.

On the other hand, the average power tariff for gas-based projects have now been offered a tariff of more than eight cents, 13 cents for furnace oil based plants and 15 cents for diesel based projects.

The government is now working out details to allow import of coal to generate up to 1200mw of electricity, although Pakistan has one of the World’s largest coal reserves in Thar where all efforts to generate electricity have not materialised as yet.

The government announced the hydel power policy in 1998 and offered a tariff of 4.7 cents per unit to hydel power producers but later asked them to sign agreements at 3.3 cents per unit. This forced many investors to close their offices in the country.

Resultantly, no hydel project could make reasonable progress till such time the country once again plunged into darkness this year. This forced the government to allow a number of thermal projects at a tariff as high as 15 cents per unit and once again invited hydel producers for a maximum tariff of 4.7 cents per unit.

The hydel producers now claim that 4.7 cent tariff was not feasible and they could start projects at a tariff not less than 6.5 cents which was far below the thermal tariff of 14 cents since natural gas was not available.