The government is all set to approve a policy to revive short-term unproductive installed Independent Power Producers (IPPs) on the basis of take-and-pay tariff of Rs 13.6 per unit, well informed sources told Business Recorder. The short-term IPPs policy was formulated with the objective of replacing the highly costly electricity generated by the most inefficient public thermal power producers - Gencos and non-producing IPPs but getting high capacity payments-to somewhat bring down the overall generation cost to reduce subsidy bill as well as bring down the consumer tariffs, the sources added.
Gencos generation cost is around Rs 22-42 /unit, as compared to take-and-pay tariff of just Rs 13.6/unit, as per current RFO cost which is lower than the tariff of even IPPs (current tariff from IPPs is Rs 16-22) because it does not involve any capacity charges or any other financial obligation for the power purchaser.
"If available plants, which are among the most efficient ones, are given the licenses they can provide cheaper electricity to the national grid on a two-hour notice," the sources continued. The sources said arrangement of fuel will be the responsibility of the power producer and Nepra has the exclusive mandate for determination of tariff for any power generation facility in Pakistan. Therefore tariff under this policy will also be developed by Nepra following the GoP guidelines.
The following is the eligibility criteria for interested sponsor(s) to sign PPA with NTDCL: (i) permissions from the relevant entities for the utilisation of plant and machinery;(ii) incorporation of Special Purpose Company under the laws of Pakistan; (iii) Project Company to obtain Generation License from Nepra; (iv) No-objection from NAB for utilisation of plant and machinery (in case of defunct rental projects); and (v) unconditional and irrevocable waiver of claims of arbitration against Government of Pakistan, and its entities (in case of defunct rental projects).
According to sources, the short-term IPPs will remain available for dispatch by NPCC for NTDC. However, with a prior written information of not less than three days, the short-term IPPs can sell electricity to bulk consumers like housing societies, industrial parks, etc., without the government guarantees and obligation of the public entities to buy any of the generated electricity, by utilising the transmission network of NTDC or distribution network of the concerned distribution companies after fulfilling the regulatory obligations prescribed by Nepra for wheeling of power.
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