Integrated energy planning model to be introduced

The government has decided to introduce integrated energy planning model, and review the power generation policy 2002 in order to attract investment in power sector, sources told Business Recorder on Tuesday. The model will be finalised by the end of October. The new model will be prepared with Asian Development Bank (ADB) technical assistance of over $2 million, the sources said.
The primary objective of the decision, which was taken in a high level meeting at the Planning Commission (PC), is to remove certain apprehensions of the private sector investors interested in power generation.
The issues like fluctuations in currency exchange rates, return on equity and risk to nation-wide fuel storages hinder private investors from investment in power sector. Due to these bottlenecks, the present independent power producers (IPPs) have not expanded their capacity despite they had promised the previous government several times to do so. The resolution of these issues would help the independent power producers (IPPs) to plan fresh investment in power generation projects and expand their existing generation capacity, the official added.
PC deputy chairman Salman Farooqi, who chaired the meeting, instructed the water and power ministry and Private Power Infrastructure Board (PPIB) to remove all the apprehensions of the private sector as the country has been facing power crisis.
The revision of power generation policy has long been due as the previous as well as the present governments failed to attract fresh investment in power generation projects. The previous government had also pledged with the IPPs that it would review the policy, but this was not timely done.
Due to serious bottlenecks, the government failed to persuade the sugar industry on power generation despite the fact that the industry is well equipped to lessen the power demand and supply gap immediately. The policy is almost silent on this very important aspect, the sources said.
National Electric Power Regulatory Authority (Nepra) has rejected the tariffs determined for power co-generation by sugar mills for several times in the past. Similarly, the textile industry is also having the capacity to produce some power, but the government never took any initiative to encourage this industry too, according to the sources.
For the past eight years, the local and foreign investors were not coming in a big way in power generation sector due to which the power demand and supply gap is widening. The new arrangements being made by the present government could attract the private investors as it was the PPP that invited IPPs to generate power in private sector in 1990s. The present government can do it again, as the party has the backing of almost all-major political parties, the sources added.