New national electricity plan 2021 approved

ISLAMABAD: The government on Thursday approved a new national electricity plan 2021 and Indicative generation capacity expansion plan (IGCEP) for the next 10 years after abandoning its earlier plan for the next 27 years.

The cabinet committee on energy took the decision during a meeting presided over by Minister for Planning and Development Asad Umar.

Sources said the wholesale generation cost accounts for 80-85 percent of the end consumer cost therefore the generation planning needs a clear roadmap. The IGCEP is a 10-year plan updated on annual basis and required to be submitted by National Transmission and Despatch Company to the regulator by April 15 every year that limits the impact on end consumer tariffs by Central Power Purchasing Agency over the period of 10 years. Since the preparation of the plan for 27 years till 2047 has not yet reached its final stages, it is proposed that the exercise should be abandoned and a new exercise for the year 2021 should be initiated.

It was envisaged that projects that have achieved letter of support and are required commercial operations deadlines. The projects that are committed with specific timelines and G2G /multilateral agreements the plan would optimize their completion date and cost of energy. Renewable targets for new projects to be governed on the basis of cost principles as per Alternate Renewable Energy Policy 2019. Due to capacity advantage, Renewable Energy (RE) project additions shall be through utilizing hybrid RE resources (50 percent for hybrid vs 33 percent and 19 percent for wind and solar alone respectively.

Power Division presented the summaries of the National Electricity Plan 2021 and Indicative Generation Capacity Expansion Plan.

The Cabinet Committee on Energy endorsed and recommended the national electricity plan and indicative generation capacity expansion plan for presentation to the cabinet. The ministry of energy was advised to include the opinion of the law division on certain observations raised by the participants during the meeting.

Umar said the policy and the plan will provide the basis for a sustainable competitive electricity market in the country.

“We approved the national electricity policy, and key bases for the indicative generation capacity expansion plan,” Umar wrote on Twitter. “These will provide the bases for a sustainable competitive electricity market which promotes renewable energy and indigenous resources.”

Indicative generation capacity expansion plan envisages production based on commercial viability of various fuel categories.

Government planned to reduce carbon footprints by increasing the share of renewable energy in power generation to 30 percent by 2030 from the current four percent. With hydropower resources, the share of clean and green electricity generation is expected to cross 60 percent.

The installed power generation capacity of Pakistan as on 30th June, 2020 stood at 38,719MW as compared to 38,995MW on 30th June, 2019 showing a net decrease of 276MW, according to the National Electric Power Regulatory Authority. During FY2020, the total electricity generation in the country was 134,745.70 GWh compared to 136,532 GWh electricity generation during FY2019 showing a decrease of 1,786.30 GWh. Further, 513.74 GWh has also been imported from Iran during FY2020 as compared to 486.80 GWh imports during FY 2018-19 showing an increase of 26.94 GWh.

Per capita energy consumption of Pakistan is around 500 kilowatts, which is almost 700kW less than the region, 2,400kW less than China and more than 7,000kW less than developed countries.

The per capita energy consumption pattern in the country is indicating high demand in the near future, offering huge investment opportunities in power generation, transmission and distribution with competitive return on investment.