Solar power projects: Nepra approves RfP amid strong reservations voiced by KP Member

    　The National Electric Power Regulatory Authority (Nepra) has approved Request for Proposal (RfP) documents for solar power projects with a unit-based benchmark tariff of Rs7.8449/kWh (3.4108 cents/kWh) for a 25-year control period, with a tariff indexation of 70% due to changes in exchange rate variations on a quarterly basis, despite strong reservations from a KP member.

　　The authority has also directed the Alternative Energy Development Board (AEDB) to consider and comply with the Authority's decisions, directions, and observations on each of the aforementioned issues.

　　In his dissenting note, Member KP Maqsood Anwar Khan stated that in the current case, AEDB has submitted the RFP for the development of a 600 MW Solar PV Power Project at Muzaffargarh before the Authority, under the federal government approved Framework Guidelines, 2022. which, in his opinion, is not an appropriate and legally sustainable framework as it appears as a parallel regime with the ARE Policy, 2019.

　　PM requests that renewable energy projects be completed as soon as possible.

　　As a result, he was of the considered opinion that developing solar PV projects under the Framework Guidelines, 2022 while ignoring the CCI approved and applicable ARE Policy, 2019 is tantamount to disregarding the CCI approved Policies and may have far-reaching consequences for Pakistan's power sector, adding: "Considering the background, in my individual capacity as member, I reverently disagree with the majority of members' decisions and my dissent may be made part of deliberation."

　　According to the sources, the AEDB also requested clarification from the Regulator on its decision regarding the benchmark tariff for solar projects.

　　The AEDB, in its letter has appreciated the provision of requisite clarifications on the issues of dedicated solar debit account and project cost/debt-equity ratio vide the referred letter.

　　However, the AEDB maintains that the provision of a one-time indexation of 30% tariff with the exchange rates at Financial Close/COD does not necessitate the filing of a review motion for decision in the matter.

　　According to the AEDB, the issue of providing a one-time 30% tariff adjustment is not a new one, as it was discussed during the public hearing on January 9. 2023. Several comments were made by attendees/stakeholders on this particular issue while discussing Nepra issue No. 8 pertaining to the indexation of 70% of the tariff.

　　With the foregoing in mind, the Authority has been asked to consider the issue of a one-time adjustment of 30% tariff with the exchange rates at Financial Close or at COD within the scope of the Authority's original decision of February 01. 2023 on the subject matter and provide its decision without a formal review motion in order to save time and enable the AEDB to begin the process of competitive bidding as soon as possible in the greater interest of the power sector.