Power Division raises concerns over solarisation impact on national grid

ISLAMABAD: The Power Division on Friday expressed concern over the surge in solarisation, particularly net-metering.

The Power Division stated that it was straining the national power system and urged the government to introduce a new time-of-use (TOU) tariff for consumers.

During a Nepra public hearing on ex-Wapda distribution companies’ petition for additional fuel charges adjustments (FCA) of Rs2.94/unit for March 2024, a regulations on net metering, recognising its benefits.

According to authorities from the Power Division, there was a notable 7.5 percent decline in overall electricity demand compared to reference targets for March, indicating a significant reduction in nationwide power consumption.

Highlighting the impact of solar energy integration, the official emphasized a significant deviation in demand patterns and operational dynamics, particularly during sunset hours when there is a sudden surge in electricity load.

Officials underscored the necessity of evaluating evolving grid patterns to accommodate changing consumption behaviours and ensure grid stability to address anticipated future challenges.

Notably, on March 28 this year, during a public hearing for February’s FCA, a senior official of the National Transmission Despatch Company (NTDC) also attributed the increasing electricity costs in Pakistan to the growing shift of consumers to solar energy, coinciding with a significant drop in demand for grid-based power. The official stated, “Due to the increasing solarisation, electricity is becoming more expensive.”

During the proceedings, Nepra member Rafiq Sheikh raised a series of inquiries directed towards the Central Power Purchasing Agency (CPPA) and Power Division, seeking clarification on critical aspects of Pakistan’s energy landscape. He attributed the impending price hike to a decline in electricity sales in March and delayed consumer payments. The intricate adjustments in tariffs, particularly from thermal sources, further contribute to the impending increase.

Rafiq asked the CPPA/NTDC and Power Division what so far they had done to increase the electricity demand. They should have asked the government (Power Division) to devise a policy for increasing demand, especially for the industrial sector. “We will engage with the Ministry and explore avenues to boost demand and address regulatory hurdles,” responded officials when queried about potential collaborations with stakeholders.

On the asking of Rafiq Sheikh, the CPPA representative said that in March, the national grid procured 55 million units from net metering arrangements.

Experts said insights into power generation from Guddu 747-megawatt plants shed light on the nation’s electricity production landscape. Moreover, authorities highlighted the maintenance plan undertaken from March 1st to March 8th by the National Transmission and Despatch Company, stating its impact would also be reflected in the current billing cycle.

Seasonal impacts on the North-South transmission system were discussed, along with variations in production from hydropower and nuclear sources. The impact of LNG (liquefied natural gas) and diesel revenue on tariff adjustments was emphasized, alongside the increasing influence of solarisation on the energy grid.

Authorities detailed the peak hours of solar energy impact, spanning from 9am to 5pm, with subsequent load increases observed from 6pm to 9am, posing technical challenges to grid stability. To maintain grid stability, the RLNG-based power plants are kept active.

Meanwhile, the government is working to introduce gross metering instead of net metering for those domestic and commercial consumers who have gone to solar system ending the swap of electricity units. The upper and middle class have managed to get solar systems installed on their roofs but because of this action, those who are still unable to have the solar system are paying Rs3 per unit more to cope with the loss in revenue, a senior official of Energy Ministry told The News. “The idle capacity is increasing day by day because of self-generation of solar electricity and the burden is being passed on to those who have not got solar system. The country’s installed capacity has increased to close to 45,000 MW and consumers have to pay the capacity payments of Rs2.2 trillion this year.”

He said: “The solar plates of 6,825 MWs have been imported as of March 31, 2024. Currently, 3,000 MW of electricity is being produced through self-generation based on solarisation.”

The privileged people, the official said, who have managed solar system on their roofs are enjoying through swap of the electricity units under net-metering system, but the system is braving the loss in revenue, so the loss is being faced by those consumers who are without solar system and thrive 100 percent on national grid electricity. They are paying an extra Rs3 per unit in their electricity bills.

“Those who have recovered the cost of solar panels installed on their roofs would be transferred to the gross metering system. The government will properly bill through their meters for the electricity consumers use from national grid and likewise, it would pay for the electricity it gets from the consumers at Rs21 per unit. The differential in payments would be adjusted. The government will send the bills based on Rs50-60 per unit to consumers using solar system for the electricity they use from the grid during night hours and at times when solar system is not generating power up to the mark may be because of rainy days or cloudy weather.”

“There is another proposal that is under active consideration to reduce the power tariff of the solar electricity being generated on roofs to Rs11 per unit as the tariff of solar panels has decreased from 7 cents to 2.5 cents and to this effect the government would soon move Nepra.

So in the days to come, the government would purchase the solar electricity from the consumers at Rs11 per unit instead of Rs22 per unit and would sell them power from national grid at Rs50-60 per unit.”

To a question, the officials said that those consumers are making their minds to install the solar system on their roofs or they have got the system in past two months will be allowed to go on net metering to recover their cost. However, this would continue for the transitional period for 3-6 months.