ISLAMABAD: Pakistan Foreign Renewable Energy Investors Forum has approached caretaker Minister for Power and Petroleum, Muhammad Ali for the removal of obstacles in the final approval of 13 renewable projects.
In a letter to the caretaker Minister for Power and Petroleum, copies of which have also been sent to caretaker Prime Minister and Chief of Army Staff, the Forum’s President, Mustafa Abdulla cited example of zero interest of local or international investors in bidding for 600 MWp solar project in South Punjab due to political uncertainty and related factors.
The PPIB which is also responsible for bringing in investment in energy sector advertised twice for 600 MW solar project at Muzaffargarh. In the first bid dated May, 2023, the bids were called on reverse bidding methodology, giving Cents 3.24/kWh as maximum tariff which failed to attract even a single “bidder”.
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Later in September 2023 a new RFP was floated with altered criteria, calling for “open bidding,” however no offers were received in spite of two extensions in submission dates, which expired on January 10,2024.
According to letter available with Business Recorder since 2017 not a single kilowatt of wind or grid solar projects has been approved. Pakistan today has only 2400 MW of wind and grid solar projects in operation against India’s 160,000 MW of wind and solar and China having installed 350,000 MW of cheap wind and solar projects.
The Forum claims that ARE-2006 policy was a good start. It had short term, medium term and long term solution for wind and solar projects for Pakistan. 1700 MW of wind and solar were planned from 2017 onwards. However the policy was abruptly discontinued by PML (N) government in 2017, without giving any alternative. Instead PML (N) government approved fourth 1300 MW RLNG based plant at Timuru, (Punjab), which is “standing idle “ as no RLNG is available.
In 2020 a new ARE-2019 policy was announced. However in this policy under “saving” clause, eighteen wind and solar projects having tariff of Cents 4.6-5.0/kWh were given approval under “cost plus regime”. Fifteen projects are operating. ARE-policy 2019 was a “death warrant” to future wind and solar projects in Pakistan.
“We have seen the results of two bidding attempts by PPIB in last 10 months. It is high time the government shift to a workable feed-in-tariff to be given by NEPRA for two years period,” said Mustafa Abdulla.
The NEPRA from January to August 2020 has given tariff to 13 wind and solar projects. Six wind projects are located in Sindh, three solar in KPK (Dera Ismail khan), three solar in Balochistan (Quetta, Bostan and Gwadar). Tariffs of these projects were not gazetted by Power Division, claiming new policy has come into effect.
The thirteen projects with low tariff of Cents 3.8/kWh and having LoI, land, environmental clearance, NTDC grid approval, NEPRA generation licence had approached ex-PM Shahbaz Sharif who formed a seven-member Ministerial Committee, “to find way out for approval of these projects”. The Committee was headed by Khawaja Asif whereas Naveed Qamar (Sindh), Shahzain Bugti (Balochistan), Asad Mahmood (KPK), Syed Riaz Pirzada (Punjab) Ahad Cheema and Dr. Jehanzeb Khan were members of the Committee.
In June 2023, the Committee and the former Prime Minister approved these thirteen projects in a summary, with directions to NEPRA to issue feed in-tariff to these projects.
The Forum, in its letter has stated that Cabinet approval couldn’t be granted due to less remaining time of the previous Cabinet. Later on, the developers of these thirteen advance stage project, with a total of 680 MW, having $600 million guaranteed investment, approached SIFC through COAS General Asim Munir in September, 2023. The COAS took prompt action and the SIFC called a meeting of the thirteen 13 wind and solar projects developers on September18, 2023 in PM Office. The developers were assured that these projects will be approved in accordance with recommendations of seven Members Ministerial Committee and former Prime Minister’s recommendations.
“Our case as per recommendation of PDM government seven-Member Ministerial Committee was prepared by SIFC senior personnel and submitted to Apex Committee of SIFC in November ’23. Someone (smarter), in Apex Committee proposed to form another committee to re-examine the case,” said the association in its new letter to Power Minister.
The letter says that the very purpose of SIFC is to expedite projects having guaranteed foreign investment and which are in interest of Pakistan. These projects if approved, will add 690 MWdc (only 200 MW AC) in the system at Rs.12/kWh, thereby also saving $500 million in fuel import bill annually.
Renewable energy projects do not require capacity payments like IPPs. Currently imported coal and RLNG based generation costs Rs.30+/kWh. Presently, Sindh is undergoing 10-20 hours of “load shedding due to high cost of electricity.
Copyright Business Recorder, 2024