ISLAMABAD: The federal government is reportedly facing a catch-22 situation with respect to massive installation of solar systems across the country, as bureaucracy portrays solarisation as catastrophic for the country’s existing power sector, whereas politicians occupying high offices are not buying this mantra.
Background interaction with bureaucrats, dealing with this hot issue and officials close to politicians sitting in high offices, showed that the net metering (solarisation) has become a headache for Islamabad.
Bureaucracy is sharing the ‘Australian Mode’ of net metering with the top brass and proposing measures to reduce its spread through different steps including reduction in buyback rates or other alternates.
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An active proposal which is being sold to Prime Minster Shehbaz Sharif is that bills of consumers be netted instead of units, which implies consumers will be charged higher rates and their bills adjusted with rates of solar generation to be fixed by the government.
According to the proposal, two invoices will be issued, one on imported electricity rates and the other on export rate to be determined by the Authority (Nepra). However, these proposals are facing stiff resistance, politically.
Minister for Power Sardar Awais Leghari has ordered the Power Division to investigate leakage of information about solarisation to the media.
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Power Division maintains that at the current speed of installation of solar system in the country, an Independent Power Producer (IPP) is being added to the system. However, the current system of Discos especially transformers are overburdened due to flow of supply from domestic solar systems. Now Discos need investment to replace existing transformers with more capacity transformers.
Prime Minister Shehbaz Sharif had directed Power Division and Nepra to finalise recommendations on net metering tariff rationalisation.
Power Division, which had submitted its recommendations to the Prime Minister last month to reduce buyback rates substantially, has been directed to move a summary after fine-tuning the following elements of rationalisation: (i) conversion of existing net metering regime to gross billing (separate rates for import and export of units); (ii) creation of separate tariff category; (iii) inclusion or otherwise of fixed charges; (iv) revision in buyback rates; (v) amendments in net metering Regulations; and (vi) a dynamic formula to determine a reasonable pay-back period.
According to sources, Power Division shared its finalised recommendations but the response from the top political office is not encouraging.
On June 1, 2024, Power Minister Awais Leghari also held an online meeting to discuss the impact of large quantum of solar generation under CTBCM.
According to sources in NPCC, the System Operator, it has been presented by the Market Operator-(CPPA-G) that in upcoming CTBCM, solar generation is expected to be the most economically viable option for future generation growth in the market.
Under the current Nepra Procurement Regulations, such generation being added to the system under bilateral contracts shall be taken as “committed” in the IGCEP and will not be subject to any least cost optimization or dispatch analysis.
Furthermore, under the firm capacity calculation mechanism provided in the Market Commercial Code, the firm capacity of solar generation is only 22%, whereby a BPC of 30MW would have to contract a solar power plant of more than 120MW to fulfil its capacity obligations. This would result in induction of a large quantum of solar generation in the system.
The only input of System Operator as Planner is with regard to its point of interconnection in the network to ensure power evacuation. This exponential growth of solar generation would lead to multiple operation challenges for the system operation in real time.
NPCC argues that expectation that solar generation would completely offset thermal generation during day time is not correct.
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NPCC has maintained that due to limited number of unit startups allowed as per PPAs, Captive Coal-fired Power Plants (CFPPs) (on 50% load) and RLNG plants (on 70% load) would have to be kept at minimum during the day so that they may be ramped up at night hours to compensate loss of solar. These thermal plants would also be required during day for voltage control and to offset the intermittency due to environmental effects such as cloud cover.
NPCC further stated that as per the constraints imposed by SNGPL, the consumption rate of RLNG throughout the day has to be maintained within a small band.
The cost of all above mentioned additional thermal generation including PLAC (part load adjustment charges) during the day shall be socialised among all consumers as Ancillary Charges.
Therefore, while solar generation will reduce marginal price during day hours, the corresponding ancillary charges would increase if the operational constraints of PPAs (minimum loading, number of startups allowed) and RLNG flow rate constraints are not relaxed. Also, in absence of adequate Minimum Demand Regulation (downward frequency regulation), Variable Renewable Energy (VRE) generation may have to be curtailed.
NPCC has requested that while determining the upper limit of the maximum generation induction to be allowed under bilateral contracts and its resource mix, the operational constraints should also be studied and considered in addition to commercial/ financial viability before taking final decision.
Copyright Business Recorder, 2024