ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has raised concerns over the three-year investment plan of the National Transmission and Despatch Company (NTDC) that it has submitted to the regulator for approval.
The Nepra deems the plan as “unrealistic” in addressing the system constraints which have resulted in recurrent blackouts across the country.
The plan includes 99 projects with a total cost of Rs510 billion, including Rs180 billion as cost overrun due to project delays.
The Nepra, during a public hearing on Wednesday, emphasised that the blackout issue in the South was primarily related to the transmission lines. Therefore, the Nepra suggested that investments be strategically planned in areas, where the system constraints are prevalent, particularly in the South. However, the plan submitted by the NTDC appears to lack sufficient proposals for investment in the Southern region.
The power regulator questioned the NTDC’s planning during the public hearing, expressing reservations about the adequacy of the proposed investments to alleviate system constraints. The Nepra pointed out that the provincial governments had approached it regarding the constraints and stressed the importance of consulting with these governments in the formulation of the investment plan.
In the revised Transmission Investment Plan (TIP) for fiscal years 2023 to 2025, the NTDC outlined significant projects and allocations. The plan included 46 projects costing Rs178 billion in Punjab, accounting for 35 percent, 15 projects costing Rs43 billion in Sindh (nine percent), 18 projects costing Rs224 billion in KP (44 percent), and eight projects costing Rs12 billion in Balochistan (two percent of the total). The Nepra expressed concern over the low two percent investment in Balochistan, a region facing electricity shortages and darkness at night.
The Nepra raised the issue of past planning deficiencies related to constraint problems. The NTDC acknowledged that identified projects to address system constraints had not been implemented. The power regulator emphasised the importance of finalising the investment plan with consideration for system integrity, reliability, and sustainability to ensure an uninterrupted power supply.
The NTDC presented the Transmission of Electricity (Right of Way) Bill as a critical component of its strategy. This draft legislation, addressing issues such as crossings of railways, national highways, and motorways, is currently pending legislation and has been forwarded to the Ministry of Energy for presentation in the legislature.
The Transmission Investment Plan aligns closely with the Transmission System Expansion Plan (TSEP), with each project technically justified. The plan considers demand forecasts from the distribution companies (DISCO) and adheres to the stipulations of the Grid Code 2023.
The investment plan faces challenges related to the Right of Way (RoW), including resistance from Project Affected People (PAP), historical lack of compensation policies, and inadequate legal frameworks. Delays in project completion, penalties, loan issues with lenders, and increased project costs have resulted from these challenges.
The NTDC’s investment plan addresses constraint removal schemes, highlighting projects such as the 500kV Gatti, Muzaffargarh, Multan, and the 220kV Sarfaraz Nagar. It aims to tackle under-utilisation issues of HVDC and power plants in/from the South. The financial impact of these schemes is challenging to determine precisely due to operational dependencies like fuel cost variations and actual generation dispatch.
The NTDC is confronting a cost overrun of Rs180.382 billion in 42 projects, with the actual overrun claimed to be Rs27.6 billion after accounting for foreign exchange component indexation and PC-I revision. The causes for these overruns include significant dollar escalation and projected future expenditures on projects yet to start.
Currency devaluation, with a notable foreign exchange component in project costs, has substantially increased project costs over various time frames. This underscores the challenges NTDC faces in managing extensive infrastructure development plans in a volatile economic environment.