ISLAMABAD: The Council of Common Interests (CCI) approved the model indicative plan for the extension of production capacity (IGCEP) on the basis of least cost (open call for tenders), the Minister of Energy.
“The IGCEP model only allows for adding power generation when needed (supply and demand projections) and on a least cost basis (open tendering),” Hammad said. Azhar, Minister of Energy in a series of tweets.
The Indicative Generation Capacity Expansion Plan – IGCEP 2021-30, an indicative annual plan prepared by the National Transmission and Dispatch Company (NTDC) in accordance with the National Electricity Policy (NEP) was approved last month by the Committee of the Energy Cabinet (CCOE). Minister Azhar said the model has been on hold since 2005. “The IGCEP model which allows adding power generation only when needed (supply and demand projections) and issues such as excess capacity and costly and non-transparent power contracts will be avoided in the future as a result, ”he said.
Over the years, the country has added additional generation to counter shortages – but little attention has been paid to energy infrastructure, efficiency and improving the collection of electricity charges – one of the main reasons for Pakistan’s huge accumulation of circular debt.
At the same time, the new added generation has been mainly based on fossil fuels. The government appears to be slowing down ongoing power projects, but it will still need to increase generation capacity by 35-40%, from around 34,501 MW to 57,204 MW by 2030.
Azhar said that the IGCEP model has been in place in the past, that circular debt and many other problems could be avoided. “Problems such as excess capacity and expensive and non-transparent electricity contracts would thus be avoided in the future.” Circular debt in the electricity sector reached Rs 2,327 trillion as of June 30, 2021.
According to some estimates, the country has had to pay a capacity charge of 850 billion rupees per year in recent years, a figure expected to exceed 1.45 billion rupees by 2023. IGCEP is considering commissioning a portfolio of new generation projects comprising numerous hydroelectric projects, Thar coal projects, K-3 nuclear power plant and more than 4,000 MW of solar and wind renewable energy projects.
Under the approved IGCEP, the 2022 generation mix, dominated by fossil fuels, will switch to clean energy (hydel, solar, wind, nuclear) by 2030.
In addition, for the same period, local fuel-based production relative to imported fuel-based production will increase from 69 percent to 87 percent of total fuel-based production.
About 88% of the total capacity increased from 2022 to 2030, which will come from indigenous fuel and the balance relates only to projects that were initiated before this government came to power. Fossil fuels currently represent more than 50 percent of production capacity, however, over the period 2022-2030, the share of fossil fuels will only be 25 percent. Thus, therefore, all new project commitments are based on indigenous fuel.