ISLAMABAD: The Pakistan Wind Energy Association (PakWEA) has expressed serious concerns at the continuous power curtailment from Wind Power Producers (WPPs), which has made projects financially unviable, well informed sources told Business Recorder.
The Pakistan Wind Energy Association is an organisation formed under the applicable laws of Pakistan with the primary purpose of liaising with and representing its Wind Power Producer members before the federal and provincial governments.
PakWEA has sought attention of the federal minister and the federal secretary that the WPPs have been subjected to continuous curtailment, adding that this is not the first instance of continuous curtailment that the WPPs have faced. The WPPs have repeatedly raised the issue of curtailment before the decision-makers.
Delayed notifications: Wind energy association not happy with Power Division
PakWEA maintains that due to this excessive curtailment, its WPP members will not be able to recover an amount to make even debt payments in time. As such, there is a real threat that these projects would be deemed financially unviable by their lenders forcing them to declare an ‘event of default’ and opt to pursue various enforcement remedies.
“Most of the affected member-WPPs have been funded by foreign financial institutions and their action of this extreme nature would seriously jeopardise future investments in Pakistan,” said Romman Dar in a letter to Power Minister.
In order to amicably resolve the issue and matters associated therewith, PakWEA has requested the federal minister and the federal secretary for a meeting in first week of May.
Meanwhile, HAWA Energy and Jhimpir Power have also written a letter to Chief Executive Officer (CEO) CPPA-G Rihan Akhtar, saying that as counterparty to the EPA, CPPA-G is aware that, under specified limited circumstances, CPPA-G is entitled to issue a despatch instruction calling for a decrease or cessation of the generation and delivery of net delivered energy. In other words, CPPA-G is permitted to curtail the project provided that such curtailment takes place within the strictly defined parameters of the EPA; i.e., if such curtailment falls within the scope of Non-Project Event; provided that such curtailment has occurred in accordance with the regime detailed in the EPA the companies’ projects are entitled to claim payment of Non-Project Missed Volume (NPMV).
They informed CPPA-C that the curtailment of one of the projects, which had commenced in 2018 and is continuing to date, has been occurring in a manner that is contrary to the spirit of terms of the EPA.
Further, the constant curtailment is in blatant violation of the promise of “mandatory purchase” which had been set out in the federal government’s policy for development of renewable energy for generation, 2006.
As CPPA-G is aware, the company, in addition to similarly placed foreign funded wind power projects, has repeatedly raised the issue of ongoing curtailment occurring in violation of its EPA and the RE Policy at all levels of government including with Nepra, Power Division and with CPPA-G.
To further complicate matters, the company is required to invoice CPPA-G for specified amounts, including amounts constituting NPMV, on monthly basis. Due to excessive curtailment of its project, taking place in a manner not envisaged in (a) the EPA, (b) the RE Policy, or (c) the company’s tariff determinations, the NPMV stipulated in the EPA is wholly inadequate in satisfying the heavy revenue losses that the company is forced to shoulder.
Both the companies have also shared the losses they incurred due to massive curtailment by the System Operator.
Copyright Business Recorder, 2024
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