Wind power project accuses NPCC of showing bias

ISLAMABAD: M/s UEP Wind Power Project has reportedly accused the National Power Control Centre (NPCC) - the system operator - of discrimination by issuing power curtailment instructions when wind speed picks up.

In a letter to Chief Executive Officer (CEO), Central Power Purchasing Agency–Guaranteed (CPPA-G), President UEP Wind Power Limited, Khurram Shahzad referred to his previous letters expressing his deep concerns regarding on-going excessive curtailments of UEP Wind Power Project as indicated to various GoP entities through letters as well as various meetings held with them in the past.

UEPW management also had a meeting with Technical Team of CPPA-G on May 22, 2024 at CPPA offices sharing with them the severe financial impacts faced by the UEP Wind Power Project due to such ongoing excessive curtailments even in this high wind season.

Excessive curtailments: Wind power projects accuse NPCC of discrimination

The power company highlighted that the curtailment instructions by the National Power Control Centre (NPCC) – system operator are always imposed when wind speed starts picking-up, hence depriving the Project of generating substantial amount of power and the curtailments are lifted when the wind speed gets lower.

“We strongly are of the opinion that this approach of the System Operator constitutes a breach of the Energy Purchase Agreement (EPA) as well as operating procedures signed between the seller (UEPW) and the Purchaser, ie, CPPA-G, the pertinent NEPRA tariff rulings and the RE Policy 2006 provisions since there is no such provision of curtailments for RE projects,” Khurram Shahzad added.

The power company further stated that it never achieved 31% capacity factor due to such excessive and non-proportionate curtailments since its commercial operations.

According to the power company, its capacity factor was recorded at 29.57 per cent in 2017-18, 29.59 per cent in 2018-19, 29.48 per cent in 2019-20, 24.79 per cent in 2020-21, 30.20 per cent in 2021-22, 23.38 per cent in 2022-23 and 28.79 per cent in 2023-24.

The average capacity factor stood at 27.97 per cent during these years which were authenticated during the meeting on May 22, 2024. Additionally, Technical team of CPPA also confirmed that UEP Wind Power project is at the bottom of the WIPPS list in terms of achieving the 31% capacity factor.

“UEPW Management is having a very strong belief that if the excessive curtailments in high wind season continues in same manner then UEPW Project will not be able to generate sufficient power, consequently will not be having enough invoicing to meet our Debt Service liability in December 2024, thus will land in a Default scenario. This Default scenario for a Top Priority CPEC Project will then have a very devastating effect on the current socio-economic aspects of Pakistan,” Khurram Shahzad added.

The company contends that its project was established through reliance on the provisions of the RE Policy 2006 and specifically Clause 8.2.1 thereof which stipulates that the renewable energy projects established under the RE Policy shall have a “must-run/mandatory purchase” status, and it shall be mandatory for the purchaser - CPPA-G, to evacuate all energy generated by the renewable energy project set up under this RE Policy.

Similarly, the concept of mandatory purchase has also been underscored by NTDC via issuance of Power Acquisition Requests (PARs) to the regulator (NEPRA) to ensure evacuation of all energy produced by the Wind Power Producers (IPPs). However, unfortunately, this has not been the case so far with UEP Wind Power Project.

The wind power company has sought CEO CPPA-G’s intervention on urgent and immediate basis to stop these ongoing excessive curtailments of UEP Wind Power project by system operator enabling it to meet the yearly benchmark target of 31 percent capacity factor.

Copyright Business Recorder, 2024