Energy Projects...Updates

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The government’s deals with 47 Independent Power Producers (IPPs


The government’s deals with 47 Independent Power Producers (IPPs), which are yet to be translated into binding agreements, will have a financial impact of Rs 836 billion based on 5 per cent rupee depreciation per annum in 28 years, well-informed sources in Power Division told Business Recorder. In return the government has to clear overdue receivables of IPPs of about Rs 400 billion in one go, for which no financial instrument is available at the moment. In August 2019, the government constituted a committee to look into the issues faced by the power sector, and to recommend a way forward.

The committee presented its report in March 2020, highlighting the issues faced in the power sector. In pursuance of recommendations and decision of the Cabinet Committee on Energy (CCoE) of May 20, 2020, another committee was constituted under the chairmanship of Babar Yagoob Fateh Muhammad, Chairman Federal Land Commission to negotiate with IPPs.

The committee had prepared an action plan for holding negotiations with IPPs established before 1994 and under the Power Polices of 1994, 2001 and Renewable Power Policy 2006 (including bagasse plants under the 2018 Co-Generation framework). IPPs under the 2015 policy were not included in the mandate of the committee.

According to sources, the committee after holding a series of meetings, formulated a report, with its salient features and the proposed action plan, presented to the Prime Minister and other forums.

The committee after successive rounds of discussions with IPPs and other stakeholders like Power Division, CPPA-G. NTDC and PPIB signed a Memoranda of Understanding (MoUs).

The sources maintained that the main features of the settlement reflected in the MoUs along with financial impact are as follows:

Hub Power Company (Hubco) which has the remaining life of seven years agreed on removal of USD & US CPI indexation on returns. It’s fixed O&M will be reduced by 11 percent with a financial impact of Rs 62 billion.

Under the 1994 Generation Policy there were seven IPPs, including Kapco, with the remaining life of 6-10 years, while Kapco's life is one year. According to the MoUs, 11% straight reduction in capacity payments & variable O&M and dollar delinking for 50% of remaining CPP was agreed with a financial impact of Rs 92 billion.

Under the Policy 2002 the number of IPPs is 12 with remaining life of 14-21 years. The pacts reveal 12% USD-based return for foreign investors, 17% return @ Rs 148/USD with no further indexation for local investors with a clawback mechanism for fuel and O&M savings and recovery of past excess payments. Its financial impact will be Rs 322 billion excluding the impact of clawback.

Under the RE 2006 (Wind and Solar) policy, the number of IPPs is 19 with remaining life 12-19 years. The pact indicates a reduction to 13% USD based return and insurance cost up to 0.70 of EPC cost. O&M cost to be reduced by 15% to 25% through GoP/Nepra support, a 50% reduction in tariff above agreed benchmark with a financial impact of revision of agreement of Rs 206 billion, excluding O&M impact.

With respect to RE 2006 addendum 2013, bagasse co-generation-number of IPPs-8 with remaining 4-28 years, the MoU envisages a reduction to 12 percent USD-based return for next 5 years and shift to rupee-based 17% return @ Rs 168 USD; 70 per cent clawback mechanism for agreed benchmark Insurance cost has been reduced to 0.7 of the EPC cost. O&M cost has been reduced by 10%. Past excess payments shall be returned. The financial impact of revised agreements has been calculated at Rs 150 billion.

The total impact of all MoUs has been calculated at Rs 866 billion, staggered from 1 to 28 years.
It was revealed that based on MoUs assuming future rupee depreciation of 5%
per annum, the committee projected that the government will be able to save an amount of approximately Rs 836 billion for pre-1994, 2002 and 2006 policy IPPs over the remaining life of these plants.

The following new seven-member committee has been constituted to take further actions on the recommendations and action plan: (i) Minister for Energy; (ii) Babar Yagoob Fateh Muhammad, Chairman, Federal Land Commission of Pakistan- Member; (iii) Special Assistant to the Prime Minister on Power-Member; (iv) Secretary Power Division-Member; (v) Secretary Finance-Member; (vi) Barrister Qasim Wadud- Member; and (vii) CEO, CPPA-G- Member Secretary.

According to sources, a proposal also came under discussion as to whether representation of Nepra may be included in the composition of the proposed committee since matters relating to tariffs will be involved in the process. The Law and Justice Division recommended that inclusion of Nepra in the committee is not advisable as it is an independent regulator.

Copy rights @Business Recorder

 

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Wapda chief urges more hydel power generation


Lt Gen (retd) Muzammil tells ICCI more dam being built to improve country’s water storage capacity

September 28, 2020


ISLAMABAD: Water and Power Development Authority (Wapda) Chairman Lt Gen (retd) Muzammil Hussain said on Monday that the share of hydroelectric power in the total energy mix would be increased to 50% over the next 30 years to provide affordable energy to the consumers.

Addressing the business community during a visit to the Islamabad Chamber of Commerce and Industry (ICCI), he said that Wapda was working on improving water storage capacity of the country by building more dams.

He said that the share of hydel power in the total power generation would be increased to 50% by 2050. “This will boost business activities and the economy will grow faster,” the Wapda chairman told the business community.

On the occasion, he gave a presentation to the business community on the construction of Diamer Bhasha, Dasu, Mohmand and other dams. He praised the business community for “driving the economy” despite the high cost of electricity.
The Wapda chairman said that the average storage capacity of water in the world was 40% but in Pakistan it was less than 10%. “Wapda is working on improving the water storage capacity by building more dams,” he added.
“The Diamer Bhasha dam has created many new business opportunities, especially for steel, cement, transport and other sectors. Therefore, the business community should take full advantage of these opportunities to promote their businesses.”
Lt Gen (retd) Muzammil opposed the decision to split Wapda, saying that it affected coordination in the decision-making in the power sector and promoted circular debt. However, he added, the government was taking the matter seriously and he expected some good decisions would come.
He said that Wapda persuaded the government to hold negotiations with Independent Power Producers (IPPs), adding that if new agreement with the IPPs was implemented, it would save Rs700-800 billion annually.
Speaking on the occasion, ICCI President Muhammad Ahmad Waheed appreciated the efforts of the Wapda chairman for focusing on building more dams and generating hydel power. “These efforts will reduce the cost of doing business in the country and increase business activities,” he said.
Waheed emphasised that cheap power generation was essential to promote of business and investment. He also commended Wapda for achieving stable ratings from three agencies, describing them “a great achievement of the organisation”.
Founder Group Chairman Mian Akram Farid, in his speech, said that the activities of the manufacturing sector were affected by the high cost of electricity. Therefore, he stressed that more attention should be paid to hydel power to reduce the production costs.
He said that 250 sites had been identified for setting up small power plants in Pakistan but the process of awarding licences was not fair. He also called for improving the performances of the distribution companies (Dsicos) and a review of the fuel adjustment charges system.
On the occasion Senior ICCI Vice President Tahir Abbasi thanked the Wapda chairman for visiting the chamber offices and giving a detailed presentation to the business community.

 

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Kurram Tangi Multipurpose Dam project coming along at a staggering pace due to relentless efforts by FWO work force. Once online in 2022 the 19 MW power generation and 41 Kms of irrigation canals capable of irrigating 16400 acres of land under stage 1. On completion of stage 2 (currently in planning) the total combined capacity of the Dam will be an astounding 83 Megawatts bringing much needed prosperity for the populace of newly merged North Waziristan District of KPK.

 

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akhtunkhhwa Energy Development Organization (PEDO) invited applications for the posts of Project_Director (PD) at

300MW - Balakot HPP
and 69MW- Lawi HPP.

 

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ISLAMABAD: 02 Oct 2020 ; The Executive Committee of the National Economic Council (Ecnec) on Thursday approved three power projects of Rs410.66 bn for Punjab and Khyber Pakhtunkhwa.


The Ecnec approved an amount of Rs79.374bn for construction of 157 MW Madian Hydropower project, District Swat, under the World Bank assisted Khyber Pakhtunkhwa Hydropower and Renewable Energy Development Programme. The foreign exchange component of the project is Rs57.339bn.

The ECNEC directed that the sponsors will adhere to the IPP regime followed by the National Electric Power Regulatory Authority (Nepra). All costs will be rationalised as per the regulator’s cost structure. The sponsors will hire financial consultants to negotiate tariff and ensure least cost generation at affordable price/tariff of the hydropower project.

The meeting approved an amount of Rs36.430bn for construction of 88 MW Gabral Kalam hydropower Project. This will include the FEC of Rs8.815bn. The Ecnec directed that the sponsors will adhere to the IPP regime followed by Nepra and all cost will be rationalised as per Nepra cost structure.

The sponsors will hire financial consultants to negotiate tariff and ensure least cost generation at affordable price/ tariff of the hydropower project. The sponsors will share with Central Development Working Party the progress achieved on the milestones given after six months of approval of project from Ecnec.

The Ecnec also approved Evacuation of Power from 2160 MW Dasu HPP stage I Dasu to Islamabad via Mansehra at the total cost of Rs132.249bn with foreign exchange component of Rs112.228bn. The project is expected to complete in five years and is proposed to be financed by the World Bank.

The main objective of the project is the evacuation of power from 2,160 MW Dasu hydro power project to respective load centers of distribution companies by construction of 765 kV double circuit transmission line from Dasu Hydropower project to Islamabad via Mansehra.

Published in Dawn, October 2nd, 2020

 

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Karot hydropower project details
Karot Hydropower Project is the fourth of five cascade hydropower stations planned on the Jhelum River. It will generate 3,174GWh (net) of energy a year, which will be sold to National Transmission and Despatch Company under a 30-year power purchase agreement. The generated power will be sufficient to power approximately seven million households.

KPCL will operate the plant for a period of 30 years following which the ownership will be transferred to the Pakistan Government.

Karot HPP location and make-up

The dam will be located near the villages of Karot in Punjab and Hollar in Azad Jammu and Kashmir (AJK), which is roughly 55km south-east of Islamabad. The dam is expected to be 95.5m-high and 460m across the Jhelum River.

The reservoir is expected to stretch approximately 27km upstream of the dam and feature a capacity 152 million cubic metres at full supply level (FSL) of 461m above sea level. The surface powerhouse consisting of four turbines will be situated approximately 650m downstream of the dam crest, and 300m upstream of the Karot Bridge.

The project will also include four 316m-long headrace tunnels, a spillway, three 447m-long diversion tunnels, and coffer dams upstream and downstream of the main dam.

The plant will be interconnected to the national grid by means of a 5km-long, 500kV transmission line. It will operate for six months a year.

 

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Construction Updates from Suki Kinari Hydropower Project - 884MW

 

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Govt to spend Rs20bn on PESCO to upgrade KP’s power infrastructure

PESHAWAR: An amount of Rs15 to Rs20 billion would be invested in the Peshawar Electric Supply Company (PESCO) to improve/upgrade Khyber Pakhtunkhwa’s power transmission infrastructure, including establishment of new grid stations and installation of new power transmission lines.

This was informed to a meeting chaired by KP Chief Minister Mahmood Khan on Monday. Federal Energy and Power Minister Umer Ayub, Special Assistants to Prime Minister Arbab Shehzad, Qasim Shehzad and Nadeem Babar, Adviser to KP CM on Energy Himayat Ullah, Special Assistant to CM on Information Kamran Bangash, MNA Arbab Sher Ali and Chief Secretary Dr Kazim Niaz were also present on the occasion.

The meeting was told that a project management unit, having representation of the provincial government, would be set up in the Peshawar Electric Supply Company (PESCO) to ensure timely execution of power transmission projects.

The PESCO high-ups were directed to devise a comprehensive plan regarding implementation of the projects and submit it to relevant forum for approval within two weeks.It was agreed to provide gas and electricity to the newly completed projects of provincial government including hospitals, schools and industries.

Briefing the meeting about progress so far made on ongoing projects of power transmission in Peshawar, the officials informed that substantial progress had been made on various projects in KP, including 132KV grid stations on Warsak road and Regi Model Town, while work on Wazirbagh grid station, bifurcation of feeders and installation of aerial bundled cables would be completed by the end of the current financial year.

Issues pertaining to illegal connections of gas and electricity also came under discussion and it was decided that both federal and provincial entities would work together to overcome the issue.

About development projects in the gas sector, it was told that uplift projects worth Rs19 billion had been approved for Khyber Pakhtunkhwa during current financial year. The existing gas supply infrastructure was being upgraded, while an artery from Mardan to Charsadda to Peshawar is being laid.The forum was appraised that in district Karak, an investment of Rs9 billion was being made in different projects while establishment of safety management system had also been approved to provide gas to local population.

Govt to spend Rs20bn on PESCO to upgrade KP’s power infrastructure

PESHAWAR: An amount of Rs15 to Rs20 billion would be invested in the Peshawar Electric Supply Company (PESCO) to improve/upgrade Khyber Pakhtunkhwa's power transmission infrastructure, including estab

profit.pakistantoday.com.pk

 

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Hydro CHINA International required STAFF REQUIRED for their upcoming renewable projects in Pakistan. The company now needs a number of candidates for their project to complete the project.