ISLAMABAD: In order to meet the growing power requirements of the industry, government has decided to develop co-power generation plants on fast track basis. In this regard the government has exempted such power plants from the fulfilling of pre-qualification criteria, submission of feasibility study and obtaining of Letter of Intent (LOIs) from Private Power Infrastructure Board (PPIB).According to the guidelines prepared by PPIB for facilitating the setting up of co generation power plants in the country on fast track basis, the sugar industry will be issued Letter of Support (LOS) by PPIB after the tariff determination by National Electric Power Regulatory Authority (NEPRA). The tariff will be levelised for 30 years and will be available for 60 MWs or above the capacity based on 28 percent net thermal efficiency.
According to the guidelines, the existing standardised power purchase Agreement (PPA) and Implementation Agreement (IA) will be modified to provide Power co-generation specific projects. The incentives available to the Independent Power Producers for power generation projects 2002 would also be available to the power co-generation units of sugar mills.
The power generated by the sugar industry will be purchased by the National Transmission and Dispatch Company (NTDC) concerned at agreed/negotiated and competitive rates to be approved by NEPRA. Power Sale/Purchase Agreements, valid during the life of the power co-generation units will be signed with sugar mills on the lines of the agreements signed with IPPs. Bagasse and imported/local coal will be consumed as per requirement of the plant without any limitation of inter-changeability.
The sugar mills selected for power co-generation will be required to set up the plant on the fast track basis, not later than 36 months of issuance of Letter of Support (LOS). Power co-generation plants set up by sugar industry will not be treated as part of sugar industry but as a separate entity for tax purposes and the existing tariff rules and guidelines for the Independent Power Producers (IPPs) would be applicable for such power generation plants/units.
Government has announced guidelines for power co-generation plants to be set up by sugar industry that would be able to bridge the gap between supply and demand in the winter season by supplying power to national grid.
There are 83 sugar mills in the country having a potential to produce 3,000MW electricity to national grid in the coming years. Co-generation projects will be based on bagasse (sugarcane waste) during the cane-crushing season (November-February) as main fuel whereas from March to October on coal as the main fuel. Sugar industry will be able to supply power to national grid during winter season when the hydel generation is at its lowest ebb. Pakistan Sugar Mills Association (PSMA) has sought tariff determination of 60MW and above co-generation power projects for delivery of electricity and submitted tariff petition to National Electric Power Regulatory Authority (NEPRA) in this regard.
PSMA has submitted a typical two part tariff structure with an energy tariff of Rs 3.368/Kwh for the energy actually dispatched and a capacity tariff of Rs 4.506/Kwh based on contract capacity or tested capacity for a period of ten years. PSMA has also sought an energy charge of Rs 3.368 /Kwh tariff and Rs 1.377/Kwh capacity tariff for year 11 to 30 years.
This means that the number of stakeholders in the power sector are soon to increase requiring new processes to resolve mutual conflicts and ensure smooth supply of electricity. Good news any way!
Source: Zafar Bhutta, Daily Times, March 25, 2008
http://www.dailytimes.com.pk/default.asp?page=2008%5C03%5C25%5Cstory_25-3-2008_pg5_9
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