K-Electric displeased as renewable energy projects omitted from IGCEP 2024

ISLAMABAD: K-Electric (KE) is reportedly dismayed by news suggesting that its five renewable energy projects (wind and hybrid) have not been included in the Indicative Generation Capacity Expansion Plan (IGCEP) 2024, which is currently nearing completion, according to Business Recorder.

The power utility has expressed its concerns to the Minister for Power, Sardar Awais Leghari, accompanied by previous correspondence detailing the status of its projects and discussions with the National Transmission and Dispatch Company (NTDC).

KE asserts that during its preliminary review of the draft IGCEP 2024 submitted to Nepra in April 2024, several key submissions from KE were overlooked. Furthermore, NTDC failed to share the draft IGCEP 2024 results with KE for review and approval prior to its submission to Nepra, despite KE’s repeated requests.

In its communication, KE reiterates its commitment to integrating renewable energy into its operations to mitigate fuel expenses and lower its overall generation costs. The company has invested significant effort in obtaining approval for its Request for Proposals (RFPs) related to renewable energy projects over the recent years.

Nepra approved the following RFPs in early 2024 after thorough discussions, numerous hearings, stakeholder consultations, and adherence to all regulatory guidelines:

1. 150MW Solar Projects at Winder and Bela sites – Approval date: February 24, 2024; reports submitted: August 28, 2024;

2. 200MW (AC Peak) Hybrid Power Project at Dhabeji – Approval date: March 15, 2024; reports submitted: October 26, 2024;

3. 150MW Solar Power Plant in Malir, Karachi – Approval date: February 29, 2024; reports submitted: November 7, 2024; and

4. 120MW Solar Power Plant in West Karachi – Approval date: February 29, 2024; reports submitted: December 9, 2024.

These projects were also endorsed by Nepra as firm projects under KE’s Power Acquisition Programme (PAP). Following these approvals, KE successfully executed the first tariff bidding process in Pakistan and the bidding for these five renewable energy projects located in Sindh and Balochistan.

KE considers these projects a significant milestone for Pakistan’s energy sector, boasting the lowest tariffs for renewable energy secured through competitive bidding. The utility estimates these projects will yield annual energy savings of around Rs 13 billion and foreign exchange savings of $87 million, thus reducing dependence on imported fuels.

Nevertheless, KE has persistently notified NTDC about its renewable energy initiatives and urged the inclusion of these projects in the IGCEP 2024. The company warns that their exclusion would not only negatively impact KE and its customers but also erode market confidence and deter potential investors. Additionally, it would render the entire regulatory process ineffective.

KE discovered during a recent Nepra hearing for the Winder and Bela Bid Evaluation Report on December 11, 2024, that these renewable projects remained absent from the draft IGCEP 2024, despite multiple revisions made since its initial submission in April 2024. NTDC has not provided or discussed any of these revised versions with KE for feedback.

 “These projects will not only lower energy costs but will also provide savings by displacing expensive fuels at both the KE level and for NTDC. They will also give the government crucial fiscal relief and significant foreign exchange savings, contributing positively to the economy,” stated KE in a letter.

 KE further argued that its renewable energy projects are considerably more advanced than some PC-1 projects designated as “Committed” in the IGCEP, which show limited actual progress. Consequently, KE believes its renewable projects deserve placement in IGCEP 2024 as “Committed” capacity to ensure timely benefits.