Prime Minister Nawaz Sharif has reportedly decided to deregulate electricity generation and directed Secretary to Prime Minister and Secretary Water and Power to prepare a comprehensive plan along with financial impact, well-informed sources told Business Recorder.
This decision was taken at a recent meeting presided over by the Prime Minister which was attended by the concerned Ministers and Secretaries.
According to sources, keeping in view the power shortage of the country, it was observed that there was no justification for idle capacity which must be utilised.
The Prime Minister directed the committee constituted by the Prime Minister comprising Minister for Finance (Chairman), Minister for Water and Power, Secretary to the Prime Minister and Secretary Water and Power to explore the possibility of resolution of the issues related to idle power plants and submit a report.
The sources said Prime Minister directed the Secretary to the Prime Minister, Fawad Hasan Fawad and Secretary Water and Power, Younus Dagha, to collect data on the financial impact associated with the deregulation of electricity generation and also submit proposals regarding deregulation of electricity generation.
The sources further stated that the government has also decided to go for utilisation of available generation capacity of Captive Power Plants (CPPs).
“Since the new projects will be coming on line in a sequential manner, meeting their committed COD timelines, Water and Power Ministry has proposed immediate utilisation of plants available but not generating energy under various modes including captive power plants with various sources as fuels,” the sources maintained.
The GoP is intending to bring forth a transparent policy for utilisation of power generation of idle plants in the national grid, as a short term measure in order to further reduce demand and supply gap/ deficit during summers of 2017 and 2018.
This arrangement can add 500 MW to generation.
The salient features of the proposed policy are as follows: (i) plants having capacity of 05 MW or above on gas, furnace oil and coal as fuel will be offered energy purchase under this policy; (ii) policy directives to Nepra for granting generation license and tariff to these companies; (iii) tariff will be based on take and pay basis and electricity actually delivered to the national grid with netting option; (iv) terms and conditions of the tariff will be determined by Nepra; (v) terms of the PPA will be summers of 2017 and 2018; (vi) template of the PPA will be prepared by CPPA-G to be adopted by all Discos for short term utilisation of these power plants for approval of the ECC; and (vi) these power plants will not be entitled for any capacity charges/payments. -Business Recorder