ISLAMABAD : Prime Minister Shehbaz Sharif on Thursday has approved Pakistan’s long-waited new 10-year Indicative Generation Capacity Expansion Plan ( IGCEP 2025-35 ) with savings of $ 17 billion through rescheduling and removing of 7,967 MW projects from the IGCEP 2021-31.
However, KE;s renewable projects( solar, wind and hybrid) have not been included in the revised IGCEP-2025-35 and the power utility company has been asked to establish its own tie line( grids station) to get more electricity from National Grid as the remaining tower will be ready in next one week to ensure supply of 2000 MW from existing 1650 MW.
Sharing details, a senior official said that ” Generation from Thar, nuclear power is available near KE’s system from which KE can also get to meet its needs. We have done justice with everyone without any discrimination ,” said an official on condition of anonymity.
Replying to question that should KE now consider it ” no” the official said ‘ yes’ but explained that he had asked KE’s team to give him facts and figures that until their transmission line is not beefed up, the operational expense based on operations of expensive plants to be met through cheaper resources then he is ready to allow their projects .But if KE has to run its existing capacity in dire need, then what is be logic of inclusion these renewable projects in IGCEP.
” I asked them to prove saving on account of fuels, I’m ready to sit and talk on this issue,” he continued.
Some glimpses of the new IGCEP are as follow : (i)Provision of Cheap Electricity: The main objective of this plan is to provide low-cost and quality electricity to the public ;(ii) new projects have been selected based on the principle of minimum cost;(iii) reduction of burden on national economy by Rs 474.3 billion ;(iv) the national saving of $10 billion (Rs 2790 billion) was achieved by rescheduling the completion dates of the projects. Savings of $7 billion (Rs 1953 billion) were achieved by removing 7,967 MW projects from the plan ; (iv) reduction in Per unit electricity price : By reducing the cost of new projects, an average saving of more than Rs 2 per unit ;(v) Merit and Transparency-Based Planning : for the first time, electricity projects have been selected based on merit and transparency. The plan has been formulated keeping the national interest in view instead of benefiting any individual, group, or party. Expensive and unnecessary projects have been cancelled ;(vi ) Effective Expansion in Power Generation: under the original plan, there were 14,984 MW new projects, but they have been limited to 7,017 MW. Projects of 7,967 MW have been removed from the plan n ;(vii) Use of Local Resources and Reduction of Dependence on Imported Fuel : by prioritizing local resources (such as hydro, solar, nuclear, wind), the dependence on imported fuel (such as coal, gas) will be reduced. this will save billions of dollars in foreign exchange annually ; and (vii) Formation of a Sustainable and Competitive Electricity Market: Future electricity projects will be based on competitive bidding. Private sector participation will be encouraged.
Termination of Government Guarantee and Purchase Obligations: The government will no longer purchase additional electricity. The government will not provide government guarantees for additional power projects and permanent elimination of any kind of capacity charges.
” This IGCEP will will ensure cheap, sustainable, and merit-based supply of electricity which will reduce electricity prices and will be beneficial for the country,” the sources added.
Strategic projects may be allowed provided that their LCV beyond selection cost is to be calculated and shall be borne by the sponsoring agency. Accordingly, Chashma-5 (C-5) and Diamer Bhasha were evaluated using the Least Cost Violation (LCV) methodology wherein, Chashma-5 was selected with an LCV of USD 0.079 billion in FY 2032 and Diamer Bhasha was optimized on least cost according to its commissioning schedule. However, Chashma-5 was optimized in FY 2038 on least cost basis without having to pay any LCV payment. As per the criteria outlined in the National Electricity Plan 2023-27, LCV payment will only be applicable for the first 06 years of operations i.e. FY 2032 till FY 2037. Consequently, the amount to be paid as LCV in terms of Chashma-5 comes out to be Rs 14 billion (including financing charges of debt) post-COD (structured as 12 semi-annual installments of Rs 1.17 billion).
The sources said, the IGCEP will continue to be refined until its final submission to NEPRA, and the associated savings and LCVs will be finalized following a thorough review by the Authority, including a comprehensive stakeholder consultation process.
One of the power sector experts Irfan Ahmad said that The PM should postpone the entire 15GW new generation till: The planned plants have more than 70% local value addition.
Meanwhile the GoP should improve its National Transmission Network and hand over the Distribution part to provincial companies for resolving stability issues in case of substantial renewable feed (intermittent energy). Sufficient local industry is installed. The capacity charges come down from 70% to 30%. Curtailment of wind projects comes down to ZERO.Ends
