National Electric Power Regulatory Authority (Nepra) has granted transmission licence to first private sector company - Fatima Transmission Company Limited (FTCL) - for constructing and owning transmission facilities. The Economic Coordination Committee (ECC) of the Cabinet had approved policy for investment in transmission lines aimed at improvement in obsolete transmission system and installation of new transmission lines as present transmission lines are unable to bear burden of more than 16000 MW. Pakistan's electricity requirement in summer is around 24000 MW whereas winter demand hovers around 15000-16000 MW.
Under the granted licence, FTCL would set up a 37 km long transmission line for evacuating 120MW electricity from generation facilities to supply to a number of bulk power consumers. Nepra's initiative is in line with the objectives of reform process in power sector approved by the federal government in 1992 to bring efficiency and competition in the sector through unbundling of public sector entities.
According to the regulator, although public sector is mainly responsible for developing Extra High Voltage (EHV) (66000 volts and above) transmission facilities, however it is noted that it could not upgrade and develop its system according to the required reliability levels leading to severe bottlenecks and congestion in the transmission system. As a consequence not only power plants in the system were forced to operate without merit but major breakdowns of electric power were also experienced.
The regulator has also noted that that with the planned generation facilities over the next four to five years, a large quantum of power is required to be transmitted by NTDC. Since construction of new EHV transmission facilities is highly capital intensive, therefore NTDC in all likelihood would not be able to generate such huge funding needs. It will also be difficult for the government to pump such large amounts of investments in the transmission sector due to its financial constraints and operational issues.
The Nepra Act allows that in addition to NTDC other entities including the private sector can construct, own and operate transmission facilities for providing interconnection services to NTDC and others. Special purpose transmission licencing regime would not only enhance the existing transmission capacity but will also result in installation of new power transmission infrastructure. It would create avenues for huge private investment which could be made for mutual bilateral contracts between supplier and consumers or for providing service to NTDC.
Nepra, in its determination further stated that initiative in due course is expected to revolutionize the sector by significantly reducing the bottlenecks in transmission system while also enabling the government to overcome the acute power crisis by allowing private sector players and entrepreneurs to participate and play their role more effectively in the development of Pakistan's energy sector. With timely availability of transmission lines, the generation companies will be allowed efficient evacuation of electricity, reduced line losses and O&M costs.