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ISLAMABAD: Hydel power can be generated at Rs 6 per kilowatt

* India offered to provide 500MW electricity at Rs 16 per kilowatt, which is expensive by Rs 10 if generated locally

Daily Times report by Zeeshan Javaid

The Indian authorities offered the Pakistani government to import 500 megawatts (MW) electricity from Amritsar to Lahore at the rate of Rs 16 per kilowatt during the recently held neighbourly meetings, while hydel power electricity can be generated locally at the rate of Rs 6 per kilowatt, showing a difference of Rs 10 per kilowatt.

The federal government has been purchasing hydel electric power on an average rate of Rs 1.50, thermal from independent power producers (IPPs) at the rate of Rs 17, alternative energy through wind resources up to Rs 19 to 22 per unit, while private sector involved in micro hydro power projects has been offering power tariff up to Rs 6 per unit, that could be more cheaper than thermal and other alternative resources.

However, the public sector is not willing to purchase up to 50 MW hydel power from the private sector due to which more than 45 small hydropower projects ready to be implemented and having accumulated power generation capacity of 3,000 MW have been out into hot waters.

Well-placed sources in the power sector informed that public sector power purchasing and distribution companies including main purchase, Central Power Purchase Agency (CPPA) are not ready to purchase electricity power from those private power generation companies, who have been interested to generate up to 50 MW small hydel power projects.

The sources said that more than 45 micro hydel power projects having accumulated capacity of 3,000 MW couldn’t be executed because of non-availability of public sector power purchasers including CPPA, which is also not ready to purchase hydropower from private sector.

Currently, Pakistan has been facing a treacherous energy crisis, where public sector power generation companies as well as IPPs involved in thermal power generation could not minimise the visible demand and supply gap.

According to statistics issued by the Ministry of Water and Power, accumulated power generation capacity of the country has been recorded up to 21,000 MW, while the average power generation in summer season has been observed at not more than 12,000 MW and in winter season up to nine to 10,500 MW.

Reasons for drastic power shortfall have been notified by energy managers including less availability of surplus water in major reservoirs, shortage of fuel for thermal power generation and severe financial constraint in the power sector.

While speaking with Daily Times, Hydro Electric Power Association (HEPA) President Zulfiqar Abbasi said that Energy Policy 1995, more transparent and proven as investor-friendly, was opposed and denied by the previous government and another policy was introduced in year 2002.

He suggested that Energy Policy 2002, be revised in the light of policy of 1995 to attract investors to contribute towards effective solutions for energy shortage in the country with an extra incentive to the small hydropower producers as well.

He demanded to establish a Federal Hydro / Coal Development Board consisting of experts, from all the provinces including Azad Jammu and Kashmir, assigning a target to generate 6,000 MW at least during the next five years through hydro and coal (through one window facility).

HEPA appealed to the federal government to ensure that the 18th Amendment should not obstruct future power generation ventures.

Abbasi suggested that all national banks, commercial banks, development finance institutions may be directed by the Ministry of Finance and State Bank of Pakistan to finance hydropower and coal-based projects on top priority basis, with less interest rates, so that end product may become competitively cheaper. At this moment banks are not willing to provide loans to hydropower and coal-based power projects.

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