Govt exploring option to get approval for IGCEP from joint sitting of parliament

ISLAMABAD: The Federal Government is reportedly exploring the option to get approval for Indicative Generation Capacity Expansion Plan 2021-2030 from the Joint Sitting of Parliament under Article 154(7) of the Constitution, as Sindh Government is unhappy with the Council of Common Interests (CCI's) decision regarding treating hydel generation as renewable energy, well informed sources told Business Recorder.

According to Additional Secretary, National Assembly (Legislation), in pursuance of sub -rule (2) of the rule 20 of the Parliament (Joint Sittings ) Rules, 1973, he has been directed to forward a copy of the communication received from Provincial Government of Sindh along with decision of the CCI of September 06, 2021 on "assumption input for preparation of IGCEP for consideration in the Joint Sitting of Majlis-e-Shoora (Parliament) under clause (7) of Article 154 of the Constitution of Pakistan."

Chief Minister Sindh, Murad Ali Shah, in a letter had pointed out that hydel electricity generation has been made part of renewable energy (RE) whereas it was not part of RE in ARE Policy 2019. This will practically finish cheap and environmentally-friendly wind and solar project most of which are being developed in Sindh.

He argued that to ensure affordable, secure and sustainable electricity for the citizens of Pakistan, strict compliance of the provisions of National Electricity Policy 2021, ARE Policy 2019 Rule 3(5) of NEPRA Licensing Generation Rules 2000 and NTDC Grid Code should be ensured.

He maintained that such policies and applicable documents explicitly require NTDC for the IGCEP modelling and simulation based on the "competitive and least-cost principles".

In this regard, reliance is placed upon clauses 4.4 (Financial Viability), 5.1 (Generation) and 5.8 (Integrated Planning) of NEP 2021.The said clauses clearly provide for the expansion in generation capacity only on "competitive and lease-cost principle" basis. Even for strategic projects, NEP does not compromise on these principles and requires relevant sponsoring Government to provide the funding to bridge the incremental cost (beyond least cost) of any such project.

However, as a result of CCI decision, cheaper indigenous coal-based power generation project and cheaper renewable energy based power generation projects have been ignored, which is a clear violation of existing provisions.

According to Chief Minister Sindh, Chairman NEPRA had clearly indicated this during the meeting when he divulged that 88% of the committed projects in the IGCEP do not fulfil the "competitive and least cost principle".

Chief Minister further stated that residents of Sindh have been facing extensive load-shedding.

Similar thoughts have also been expressed by the CM KPK which means that there is an unmet demand. The demand figures have therefore not been correctly indicated by the Power Division. In fact, it was mentioned during the meeting that the proposed assumptions for the IGCEP do not take into account the unmet demand load shedding thereby meaning that the people of this country will continue facing the menace of unmet demand load shedding during the period these assumptions are in effect.

Chief Minister Sindh proposed that matter be discussed in the Joint Sitting of Parliament under Article 154(7) of the Constitution, requesting that this communication be immediately processed as per Rule 20 (Chapter V) of the Parliament (Joint Sitting) Rules 1973.

While presenting the geographical distribution of committee projects, the Secretary, Power Division stated that seven projects of 1,906 MW of AHJ, one of Balochistan of 300 MW, 15 of KP of 6,291 MW, 24 of Punjab of 2,672 MW, 26 of Sindh of 4,642 MW, two of Gilgit Baltistan of 4,535 MW and two nuclear + imported projects of 2,145 MW are considered in the committed category for the IGCEP 2021. As such, the percentage of province-wise committed projects are as follows: AJ&K (8 per cent), Balochistan (1 per cent), KP (28 per cent), Punjab (12 per cent), Sindh (21 per cent), GB (20 per cent) and nuclear plus import (10 per cent), respectively.

The share of hydel power generation is projected to increase from 29 per cent in 2021 to 41 per cent by 2030 whereas cross border import of electricity would rise from 0 per cent to 2 per cent, RFO to decrease from 19 per cent to 2 per cent, dependency on imported coal to reduce from 11 per cent to 9 per cent, use of local coal to increase from 2 per cent to 6 per cent, use of RLNG in power generation from 17 per cent to 12 per cent, use of gas from 10 per cent to 5 per cent, nuclear from 7 per cent to 6 per cent, while bagasse and wind will remain at 1 per cent and 3 per cent, respectively. He said that by 2030, there will be 6,819 MW excess capacity on the basis of GDP growth estimates provided by Finance Division.

"Any project added to the committed projects will further increase the excess available capacity. If all demands of provinces and AJK are agreed to, 5,772 MW will be added to an already projected surplus of 6,819 MW, thus adding unnecessary burden on the exchequer, as well as, consumers," said Secretary Power.

Shaukat Tarin, currently the Advisor to PM, had sought clarification regarding the assumptions of the GDP growth. Secretary Power Division clarified that the GDP assumptions, with an average growth of 5.13 per cent up to FY 2030, have been provided by the Finance Division which shall be assumed for the development of IGCEP.

The meeting was further informed that even if continuous annual GDP growth of 7 per cent was assumed for the next ten years, the available capacity would still be sufficient for the resultant electricity demand.

Tarin had argued that economic growth is expected to be higher than 5.1 per cent and is expecting it to reach 7 per cent during the coming years. Prime Minister had indicated that such a scenario is already taken care of as even in the case of a flat 7 per cent annual growth over the next ten years it would leaves a surplus generation capacity in the power sector.

Copyright Business Recorder, 2021