KP optimising huge power generation from hydel, solar resources

ISLAMABAD: The government of Khyber Pakhtunkhwa (GoKP) is to announce today (Tuesday) in Peshawar its landmark achievements in energy sector during the last two-years, starting from three flagship hydro power projects of 802 MW and encouragement of solarization up to the opening of provincial power sector for competitive market.

The provincial government would also announce that PEDO (Pakhtunkhwa Energy Development Organization) is in the process of executing two hydropower projects of 245 MW in District Swat, which include 88 MW Gabral Kalam and 157 MW Madyan HPPs under the World Bank financing.

The new flagship hydro projects of 802 MW that include 300 MW Balakot, 96 MW Batakuni and 496 MW Lower Spat Gah are at an advance stage of construction. The Energy and Power department of KP government would today (Tuesday) make its two-year performance report 2018-20 public. The report available with The News unfolds the initiatives taken by the E&P department under which 1,028 mini hydropower projects are under construction and 8,000 schools,187 basic health units (BHUs) and 4,000 mosques are being solarized. Also, 300 mosques and 5,700 households have been solarized.

KP has identified 30,000 MW of hydropower potential, while 6,000 MW (33,000 GWH having generation cost Rs63 billion) have been developed and approximately 10,000 MW are at different stages of implementation amounting to Rs100 billion revenue per annum approximately. Similarly, out of the 27 oil and gas exploration blocks, only four are currently producing about 45,000 BPD of crude oil (50% of national production) worth Rs131 billion per annum, 490 MMCFD of gas (12pc of national production) having an estimated monetary value of Rs147 billion per annum and 850 TPD of LPG (40pc of national production) amounting to Rs19 billion per annum. The report claims that the KP government has established the LPG marketing department to provide LPG to northern and merged districts of KPK and maximize its outreach for domestic use. This would directly benefit around 32,000 families with increased availability of LPG.

On account of net hydel profit that KPK government wants the federal government to pay in the light of AGN Kazi formula, the KP Chief Minister Mehmood Khan has convinced the CCI (Council of Common Interests) on net hydel profit figure of Rs128 billion for KPK for 2016-17. The KP government, according to the report, has also managed to get Energy Purchase Agreements signed with Central Power Purchase Agency (CPPA) for 18 MW Pehur, 17 MW Ranolia and 36.6 MW Daral Khawar hydropower projects. This will result in getting a combined revenue of Rs2.1 billion annually. However, the KPK government has decided to shift the projects from a ‘take or pay’ model to a take and pay model. “This will reduce the burden of the federal government in the head of capacity payments,” says the report.

The KPK government has also auctioned and held wheeling of power model of 18MW Pehur hydro electric station, which is a success story for emulation across the country. It commenced on June 5, 2020 to supply cheap electricity at a strike rate of Rs7.5 per unit against the average national industrial tariff of Rs15 per unit, to five industrial consumers of KPK.

This historic step will offset the local disadvantage faced by the industrial sector of KP. Following the success of phase-I of wheeling model, the GoKP has indicated Phase-II which entails supply of 148 MW from Machai, Malakand-III, Ranolia, Daral Khwar, Karora and Jabori hydropower projects to the industrial consumers of KP. Till date, over 66 industries have applied for availing the facility in Phase-II.

About the World Bank funded projects of 245 MW, PEDO is executing two hydropower projects in District Swat, namely 88 MW Gabral Kalam and 157 MW Madyan HPPs with a cost of Rs142 billion. The World Bank will provide US$450 million while the share of GoKP will be US$151 million. Additionally, funding up to the tune of US$185 million will be arranged through commercial financing with the assistance of the World Bank. Revenue of approximately Rs10 billion per annum will be generated after their completion. Feasibility studies will also be conducted for 10 hydropower sites. The project includes a first-ever hybrid model in the country, wherein approximately 20 MW of solar power generation will be installed. In addition to revenue and employment generation, this project will also help in capacity building of PEDO through a foreign reputed consultant.

More importantly, the KPK cabinet, the report says, has approved comprehensive investment plan worth Rs20.5 billion from Accelerated Implementation Program (AIP) for the next three years. KPOGCL will be investing as Joint Venture Partner in 8 exploration blocks, yielding high returns to the GoKP in royalties and dividends.

Similarly, the cabinet has also approved the investment plan worth Rs15 billion for the next 10 years to be funded from oil & gas royalty. Accordingly, these royalty funds will be invested by KPOGCL in 12 exploration blocks of merged and settled districts of Khyber Pakhtunkhwa as JV partner.