Introduction of High Voltage Direct Current Matiari-Lahore Transmission Line was established to efficiently transport electric power mainly from the southern region to the central and northern load centers over a distance of 886 km with capacity to transmit 4,000 MW of electric power. The project achieved COD on September 01, 2021 and significantly enhanced system’s capacity by allowing it to efficiently and economically handle heavier loads over greater distances.
However, the transmission line is not being fully utilized. In FY 2022-23, the average utilization of this crucial infrastructure remained at approximately 1,584 MW or 39.6% of its designed capacity.
Due to the ‘Take or Pay’ contract, the company is entitled to receive payment for the full capacity, even though it is not being fully utilized. This situation is adversely affecting the power sector and placing an additional burden on electricity consumers.
There are several contributing factors, including but not limited to inadequate AC systems at receiving end, negative sales growth etc. The significant gap between capacity payment obligation and practical usage of HVDC line requires a thorough reevaluation of the cost structure and operational efficiency of the line, ensuring a more judicious allocation of resources in future endeavors.
The government administers the effective uniform tariff that companies charge their consumers and compensates the DISCOs for the difference, commonly known as Tariff Differential Subsidy (TDS).
Companies with lower regulated tariffs than the notified ones are not permitted to pass on the benefits of the lower tariff to their consumers. Instead, they levy a Tariff Rationalizing Surcharge (TRS) on their consumers to align it. Consequently, consumers of relatively efficient DISCOs subsidize those of less efficient DISCOs.
This practice of cross-subsidization, where consumers of efficient DISCOs bear the financial burden of underperforming counterparts, inadvertently undermines efficiency and unintentionally fosters inefficiencies.
Dynamics call for urgent rectification and must be discouraged by deregulating the sector.
The existing interconnection capacity between NTDC and KE, which relies heavily on supplies from the National Grid, is limited to about 1,100 MW. With the operationalization of new generation facilities like K2 and K3 (operating on nuclear fuel) and plants utilizing imported coal (Port Qasim Electric, China Power Hub Generation, and Lucky Electric Power), there is a need to enhance interconnection capacity between the National Grid and KE by establishment of two 500 kV grid stations at KKI and Dhabeji. The capacity will then increase to over 1200MW.
FY 2022-23 net-metering consumers were 56,427 with accumulated generation by net-metering connections amounted to 481,863,365 kWh up from 150,669,148 kWh.
Laughable are the expert journalist opinions
Triggered by import of 6800 MW panel (brings back memory of Rs 70bn import between 2017 and 2022 identified in October 2022 audit by FBR. Quantum of money laundering would be between $2 – $2.5 bn during the past five years per Senator Musaddaq Malik last year), article in The News states that with winter demand of 10-12k MW and as result of this and existing solarisation quantum of 1938MWs, electricity required from grid will be only 3000MW!!!!!!!
Business Recorder states that solarization reached 2036 MW till April 30, 2024 as compared to 963 MW in June 2023. “Current trend of solarization indicates that every month an IPP is installed in the country. If this trend continues, who will consume generation from power plants?”
Efficiency at 23-25% actually means ~500MW available today in the day and is costing public at large consumer Rs 100bn or Rs 1.9 per unit and with 2250MW possibly Rs 500bn or Rs 9-10 per unit. Why elite in LESCO, IESCO, KE and MEPCO are to be subsidized?
The roof top installers surprisingly want treatment as an IPP and paid an exhorbitant tariff of Rs 21 per kwh (April EPP is Rs 9 and CPP is ~Rs 21 per kwh). Instead Gross Metering has to become the norm in the on grid network at < Rs 9 per unit with matching capacity availability during night by the DISCOs suggested at Rs 60 per unit.
The main disadvantage of net metering connections, especially in power sectors with surplus generation capacity, particularly on a ‘Take or Pay’ basis, is that other consumers may suffer due to underutilization of ‘Take or Pay’ capacity.
The main disadvantage of net-metering connections, especially in power sectors with surplus generation capacity, particularly on a ‘Take or Pay’ basis, is that other consumers may suffer due to underutilization of ‘Take or Pay’ capacity. However, as long as the EPP of the most expensive generator in the system remains higher than the purchase price of electricity from net-metering connections, it remains advantageous for all stakeholders.
Total installed capacity of renewable energy sources (hydropower, wind, solar, and bagasse/ biomass) in Pakistan’s power system exceeds 13,000 MW. Backup to these sources needs to be catered while approving investments in RE projects.
While RE sources significantly contributed to clean electricity generation, they came with their own set of challenges that need to be addressed for their widespread integration into the grid.
Unlike conventional power plants that can provide a constant output, the availability of energy from hydropower, wind, and solar depends on weather conditions and water flow provides intermittent power due their inherent variability which means that excess energy generated during periods of high availability may go unused.
Thus variability can lead to fluctuations in energy supply, making it challenging to match supply with demand in real-time and grid operators need to implement sophisticated forecasting and balancing mechanisms to ensure a stable and reliable power supply.
Effective energy storage solutions are therefore essential to capture and store surplus energy for later use, especially when demand is high and supply is low. Developing cost-effective and efficient energy storage technologies is crucial for maximizing the benefits of intermittent power sources. These investments need to be catered for in the tariff.
Geographical location of these sources pose logistical challenges e.g Baluchistan, Central Punjab and KP which necessitates development of extensive transmission infrastructure to transport the energy from where it is generated to where it is needed. Investment in building and accounting for a robust and interconnected grid is crucial for efficiently harnessing the potential of intermittent power sources.
The price of panels have decreased and integration of RE may displace fossil fuel-based energy, conserve foreign exchange reserves due import of gas and coal and aiding reduction greenhouse gas emissions.
Distributed and off grid RE power plants could potentially offer the most cost-effective solution for the power sector, actualization of substantial RE power projects has faced several obstacles need removal and entrepreneurs need to be encouraged.
Should solar and wind induction be limited to a % of provincial demand, what is to be the base load fuel and how intermittency is to be priced and dealt with are questions needing answers?
Further more, whether Pakistan should have power, gas and LPG delivery infrastructures needs determination as we move into next decade.
In conclusion, intelligent tackling of the issues related to variability, energy storage, and transmission infrastructure will be key to realizing the full potential of hydropower, wind, and solar energy in pursuit of a sustainable energy future. Integration of RE power in Pakistan should be executed after meticulous analysis, taking into costs associated with intermittency and potential under-utilization of generation and transmission facilities, among others.
At present, fixed charges billed to electricity consumers range from approximately Rs. 200 to Rs. 500 per kW/month, determined by their Actual Maximum Demand (MDI) for the month or 50% of sanctioned load, whichever is higher.
In contrast, capacity charges billed to DISCOs by CPPA-G remain consistently over Rs. 4,000 per kW/month. This highlights that only around 3% to 4% of the fixed costs is accounted for as fixed charges, while the rest is billed based on variable charges depending on energy consumption.
In summary, ending of cross subsidization among DISCOs; reducing transmission and transformation losses to enhance overall efficiency and sustainability of the grid especially to understand and cater to impact of solar duck curve and EVs induction as solarization and micro grids necessitate balancing of network and Battery Energy Storage Systems
NPAK Energy Ltd, a subsidiary of the industrial and infrastructure development arm of the Aga Khan Fund for Economic Development, is investing $6m in Duiker and Nasirabad Solar Power Plants of 3.6 MWp with 2 MWp storage capacities. Project financing blends equity, sustainable debt, and grants. Provincial Grid companies should follow in the footsteps of AKFED.
An additional $14m has been secured from development partners for the enhancement of the region’s energy infrastructure.