Export of 500 megawatts power: decision subject to clearance by India's Cabinet

India has agreed to export 500 MW electricity to Pakistan provided Indian cabinet clears this commercial deal, official sources told Business Recorder. "We have discussed all the pros and cons of the electricity deal with the Indian authorities. Some of the issues are yet to be resolved to finalise the agreement. Four groups have been formed to finalise technical, commercial, tariff and implementation issues," the sources added.
The four groups comprising engineers of NTDC and PGCIL are working together to finalise the following matters on an urgent basis: (i) addressing System compatibility issues and deciding on voltage level and best nodes on both sides of interconnection; (ii) engineering and design of interconnection; (iii) working out bill of quantities and drawings for bidding; (iv) since PGCIL has sufficient experience and expertise in Engineering and Construction of D.C. networks PGCIL will extensively share the expertise and literature with NTDC counterparts for successfully completing the project; and (v) PGCIL will construct the part of interconnection falling in the Indian territory and NTDC will construct the part of interconnection falling in the territory of Pakistan. The project components on each side will be financed by the respective governments.
A couple of days ago, Commerce Minister Engineer Khurram Dastgir told media in Lahore that an electricity purchase agreement has been signed with India. However, his claim has been negated by officials in the Ministry of Water and Power.
"No final agreement is reached with India on electricity so far. India has just given an indication in principle that it is ready to sell 500 MW," the sources added. Power sector experts of Pakistan and India have discussed different options of interconnection between Pakistan and India at the following locations: (i) Batapur at Lahore; (ii) Ghazi road Lahore at 132 KV; (iii) Ghazi road Lahore at 220 KV; (iv) Sarfaraz Nagar at 132 KV; (v) Sarfaraz Nagar at 220 KV; and (vi) Kasur at 132 KV.
"We have discussed issues like frequency synchronisation, quantity of power flowing through the system, and issues of short circuiting, distance/fault in one area having an impact on other areas," the sources continued. The issue of installation of DC to AC converter system at the interconnection point is one of the key hurdles in finalisation of deal, said an official on condition of anonymity.
India has proposed Power Trading Company (PTC) of India as trading agent of NTDC as it has vast experience of power import/export and is a Public Sector Company. The World Bank had conducted a pre-feasibility study in this regard which will set the stage for the required detailed studies. The recommendations amongst others made in the pre-feasibility study are as under: (i) a detailed feasibility study of the interconnection options should be conducted to establish tradable electricity volumes between the two countries based on configuration and design of the interconnection arrangements and on a detailed analysis of power systems in India and Pakistan; (ii) based on the interconnection point, infrastructure cost estimates and power flows, a detailed economic and financial analysis should be carried out to establish a tariff regime and a sensitivity analysis for full cost recovery; (iii) a final ranking exercise of available options should be completed; (iv) Pakistan and India must hold open discussions on trade arrangements, import/export tariffs, and the resolution of technical, regulatory and national policy issues. The consultants recommend that the power purchase price be decided by market dynamics; (v) private sector involvement should be promoted in the development of interconnection and electricity trading facilitated; (vi) instead of sourcing power under a fixed volume contract, sourcing variable power according to the supply availability of the demand load profile can reduce costs significantly; and (vii) minimum standards will need to be established on balancing and settlement process, payment security mechanisms and grid codes as energy trade expands.