ISLAMABAD: A group of experts from the energy sector has opposed the draft Alternative and Renewable Energy (ARE) policy saying that it is not structured, is deficient and contradictory to various regulations and codes and does not provide a clear roadmap for the renewable energy development.
A panel of 10-member experts, including former heads of companies and energy regulators from the public and private sector, and representatives of provincial governments in letters to federal ministries and relevant agencies asked them to announce a viable policy that could attract new investments with clear objectives. .
They noted that the document finalized by the federal government appeared to be a conceptual draft of work rather than a complete procurement policy, on which interested parties, developers and investors and implementing agencies could join the efforts of the Center for an immediate bankable business model.
The panel was composed of the former managing director of the National Transmission and Dispatch Company (NTDC), Dr. Fiaz Chaudhry, former MD of the Board of Infrastructure and Private Energy (PPIB) NA Zuberi, former deputy MD of State Petroleum from Pakistan (PSO) Sohail Butta, former director of the National Electric Power Regulatory Authority (Nepra) Naveed Siddique and consultants and lawyers in the energy sector Dr. Shahid Rahim, Sultan Farooque, Irfan Ahmad and Dr. Uneeb.
Center warned against "transfer" of delegated powers in the 18th Amendment
"This draft ARE policy cannot be implemented, because it is an unstructured, deficient and contradictory structure with various regulations and codes and does not provide any clear roadmap for the development of the sector," said a report jointly finalized by these experts
They noted that the rights of the provinces with respect to the installation of power plants proposed in the draft policy were confusing and were in conflict with the provisions of the Constitution. "The role of the provinces in the issuance of letters of intent (LOI) has been completely circumscribed and the provinces have limited themselves to the development of projects" to sell energy within their own limits.
Experts said that if the reason was to grant full powers for planning and approval of projects to the federal government as the sole purchaser of energy, then, instead of excluding the provinces from the process, the new policy should require the issuance of tripartite consultations and agreements between the federal government. and provincial governments and investors, as was currently the case with Azad Jammu and Kashmir.
In addition, the provinces are currently required under Section 13 of the 2015 Energy Policy to coordinate with the PPIB on hydroelectric projects, a principle that must also be followed in the case of ARE projects as part of the National Energy Policy that must approve the Common Interest Council (JRC).
The experts were of the opinion that the federal government should retain regulatory control over the integration of provincial actions in the development of energy sources and the provinces should retain administrative authority to develop their own ARE resources.
"The delegated powers in the 18th Amendment should not be transferred due to the provincial sensitivities involved," they wrote, adding that the 2006 Renewable Energy Policy that is in use for more than 11 years must continue as a base document, with clauses Revised and additional to accommodate the federals The government's desire to contract the ARE project in a form of government-to-government acquisition for remote areas.
The report says that the provinces should receive objectives to develop renewable projects of various technologies in line with the proposed national energy policy and ensure that the provinces meet their objectives and deadlines. The provinces must detail the ARE areas according to the availability of resources.
Given the current status of the draft of the ARE policy, the experts stressed the need to restructure certain acquisitions, objectives, business models and mode of agreement and share it with the provinces before the ICC adopted it for approval and implementation as a document Finandable
They said the current policy draft conceptualized several business models, but the respective domains were not clearly defined, and were not mutually exclusive and were making interested parties concerned. The policy project also lived up to show an indicative figure for new generation capacity. In addition, the policy did not indicate a maximum or minimum capacity addition limit in terms of technology annually.
Experts said the proposed policy was not clear for the developer to determine its competitive advantage in the seller's market and, therefore, did not take into account the development of the competitive market, which was a key mandate of the energy regulator, Central energy purchases and the national network company. as the parliament emphasized in recent amendments to the Nepra Law, 1997. As such, the procurement policy did not align with the national network code and modified the Nepra Law 2018.
The policy did not provide annual participation or a floor and limit for the private sector and the treatment of government-to-government project treatment made it very difficult for the private sector to develop a business plan for the Pakistan market. Nor was there competitive bidding for G2G projects in the policy that was a seriously undesirable defect. “The current approach may fail in the new ARE policy if it is approved in the same unwanted way. The developers would consider uncertainties and missing information (criteria, capacity objectives, schedules, rates, deadlines, etc.) and increase the competitive price of the offers, ”he said.
Posted on Dawn, September 2, 2019