Govt opens energy market for Power Generation Companies: Omar Ayub

Omar for more jobs to local communities in development projects
File Photo

ISLAMABAD, Feb 24 (APP): Federal Minister for Power Division Omar Ayub Khan on Wednesday said the government plans to open the energy market for the competitive bidding process to be initiated this year soon after the approval of Indicative Generation Capacity Expansion Plan (IGCEP).

Addressing Financial Closure ceremony of 250 MW solar power projects, the minister expressed the hope that with the addition of clean and cheap renewable energy (RE) generation, they would be able to achieve the strategic objectives of affordable electricity for all whereas it would also support the sustainable economic growth in the country.

“Today we celebrate the achievement of Financial Closing of 100MW solar project of Zhenfa Energy Ltd. and 150MW (3x50MW) solar projects by SCATEC and NIZAM Energy.” he congratulated the projects, companies and Alternative Energy Development Board (AEDB) on achieving the milestone in a very short time

Renewable energy technologies have matured during the last one decade and Pakistan has started harnessing the immense potential of alternative and renewable energy resources available in the country, however, the development of RE has remained slow owing to no targets set in the initial policy and frequent policy level decision, he said.

The minister further said the government has now announced a new policy that sets a target of 20% RE capacity by 2025 and 30% by 2030. “Overall, the Government intends to have a share of more than 60% coming from clean technologies by 2030”, he added.

The ARE Policy 2019 envisages development of ARE projects in a well-coordinated and planned manner with active participate of all key public sector stakeholders.

He said proper planned induction of ARE projects through competitive bidding would ensure smooth implementation of projects without any delays as were faced by investors in case of unsolicited projects under the previous policy. All ARE induction would be based on the outputs of the IGCEP, he added.

He said a Steering Committee comprising of Power Division, AEDB and all four provinces and support by National Transmission and Dispatch Company (NTDC) and Central Power Purchasing Agency (CPPA-G) would be responsible for making annual procurement plans.

Power purchase and interconnection commitments from CPPA and NTDC would be in place before the bidding process, he added.

He said the past government abandoned 4000 MW RE projects and promoted projects based on imported fuel. Earlier, solar projects were awarded at Rs. 22 per unit and now the rate is around Rs.5.65 per unit.

The government only ensured transparency in awarding contracts of various power projects and will save Rs. 4000 billion in energy sector.

The consumption of electricity in industrial sector witnessed increase of 17 percent in January owing to incentive given by the government to the industrial sector, and overall 28 percent increase was registered in consumption of electricity because of terminating peak and off peak hours factor.

Omar Ayub said an investment of Rs. 47 billion has been made in the transmission system of NTDC during the last 2 and half years while Rs. 74 billion were invested in the distribution system.

He said 80 per cent feeders were already cleared from load-management while remaining 20 percent feeders were being cleared.

The minister said the government also auctioned 15 new blocks for exploration of new oil and gas reserves while the work is under process on Pak-Russia Gas Pipeline project.

Special Assistant to the PM on Power Tabish Gohar said negotiation are underway with the Independent Power Producers (IPPs) and over Rs. 700 billion would be saved once the process is completed while an amount of Rs. 850 billion was paid under the capacity payment in one year.

Gohar said that Professional and competent CEOs, Board of Directors and members were being hired through transparent manner in the distribution companies.

Punjab Energy Minister Akhtar Malik said the provincial government has a clear vision about the RE adding that clean and green energy is being added to the system.

He said the provincial government has shifted 10,500 government schools on solar energy and now all the basic health units are being switched to solar energy in next stage.

The minister said the Punjab government has a plan to shift all public sector universities on solar system besides converting all public connections on solar energy in near future.

He lauded the Zhenfa Pakistan New Energy Company for setting up 100 MW solar power plants in Layyah district and said that it would further expedite economic activities in the remote area.

In his welcome address, CEO AEDB Shahjahan Mirza said the four solar projects have achieved a financial closure in a record time which reflected the government commitment for promoting the RE in the country.

SAPM to PM on Petroleum Nadeem Babar, Secretary Power Ali Raza Bhutta, NEPRA senior officials, Ambassador of Norway and other dignitaries were also present in the ceremony.


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