- November 14, 2023
- Posted by: Muhammad Afzaal
- Category: RBS News
According to the latest information, the Executive Committee (EC) of the Special Investment Facilitation Council (SIFOC) has issued instructions to establish an inter-ministerial panel tasked with evaluating renewable energy (RE) projects.
This comprehensive review will encompass Category-III wind and solar PV projects, which comprise 13 projects. These projects are in an advanced stage, as well as other pending Letters of Intent. During a two-day series of meetings, the EC of SIFC deliberated on the challenges faced by these RE projects. This heard presentations from project sponsors expressing their perspectives on the issues.
The Special Investment Facilitation Council (SIFC) has twice issued directives to several key authorities, including the Minister for the Power Division, the Attorney General of Pakistan (AGP), the Secretary of the Law and Justice Ministry, the Secretary of the Power Division, the Managing Director of the Private Power and Infrastructure Board (PPIB), and the Chief Executive Officer (CEO) of the Central Power Purchasing Agency-Guaranteed (CPPA-G), instructing them to submit a report on Category-III projects within a 15-day timeframe.
Category-III Projects Secured By NEPRA
Sources within the power division have confirmed that over a hundred wind and solar projects are currently inactive. It cites various reasons for their lack of progress. Category-III projects are those that had not secured tariffs from NEPRA by the time of the CCoE’s decisions on February 27, 2019.
Furthermore, SIFC generation licenses are still awaiting processing through bidding by the former Alternative Energy Development Board. It was based on the IGCEP (Integrated Generation Capacity Expansion Plan) outputs and confirmation of Interconnection Ready Zones (IRZs) by NTDCL (National Transmission & Dispatch Company Limited). The IGCEP 2022 allows for the addition of 500 MW of wind. 3,120 MW of solar capacity by 2025 to streamline these projects.
It’s worth noting that Category-III projects encompass 31 wind projects totaling 2,139 MW. The 69 solar PV projects with a combined capacity of 4,193 MW. Among these, 22 wind projects and 28 solar projects with allocated landfall within IRZs.
In addition, the Punjab region hosts 100 MW wind projects and 1,010 MW solar PV projects, of which 1 wind project and 7 solar projects have received Letters of Intent (LoI) for land with IRZs. There are 21 LoIs for 490 MW wind projects and 4 LoIs for 590 MW solar projects in Sindh. However, in KPK, there are 250 MW solar projects with four LoIs, and in Balochistan, there are 1,190 MW wind projects and 2,500 MW solar projects.
The Power Division has recommended conducting competitive bidding for a total of 500 MW for wind projects and 820 MW for solar PV projects.
Key Observations OF PM After Several Meetings
The previous Prime Minister’s Committee, chaired by former Prime Minister Shahid Khaqan Abbasi, made the following observations after several meetings:
- A fast-track mechanism is needed to clear the backlog.
- Provinces have reservations about conducting competitive bidding.
- The existing policy has resulted in significant delays for all projects.
- Limited capacity can be obtained through competitive bidding from Category-III projects.
- There are drawbacks to LoI holders with a capacity of up to 50 MW compared to those with a capacity of 100 MW or more, owing to economies of scale.
The committee has presented the following recommendations:
- All future solar and wind projects should go through an international competitive bidding (ICB) process under the supervision of PPIB or Discos, in line with approved schemes.
- Category-III wind and solar PV projects should be allowed to proceed upon accepting an upfront tariff announced by NEPRA.
- The PPIB (formerly AEDB) should declare financial closing on a first come. First-served basis for a total capacity of 50 MW for wind projects and 2,500 MW for solar projects.
- Compliance with the Council of Common Interests (CCI) decisions should sought for processing Category-III projects based on an upfront tariff. Both the ARE Policy 2019 and National Electricity Policy (NEP) 2021 only allow competitive bidding.
- Sponsors should required to submit a Performance Guarantee of $10,000 per MW. It obtains a Letter of Support (LoS) to ensure commitment to financial closing by serious players.
Furthermore, the Ministry considers that Renewable Energy (RE) Projects should proceed in accordance with the terms of the CCI’s decision of August 6, 2020. The Power Division has also highlighted delays in RE projects due to administrative issues.
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