National Electric Power Regulatory Authority Islamic Republic of Pakistan
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National Electric Power Regulatory Authority Islamic Republic of Pakistan NEPRA Tower, Ataturk Avenue (East) G-511, Islamabad Ph: +92-51-9206500, Fax: +92-51-2600021 Registrar Web: www.nepra.org.pk, E-mail: [email protected] No. NEPRA/R/LAG-235/ 7/67— 7 June 26, 2014 Mr. Asim Ahmed Buksh Director Buksh Energy (Private) Limited 54, D-1, Sir Syed Road, Gulberg-III, Lahore Phone: 042-35716401-406 Subject: Generation Licence No. SPGL/06/2014 Licence Application No. LAG-235 Buksh Enemy (Private) Limited Reference: Your letter No. nil, dated February 04, 2013 Enclosed please find herewith Determination of the Authority in the matter of Generation Licence Application of Buksh Energy (Private) Limited (BEPL) along with Generation Licence No. SPGL/06/2014 annexed to this determination granted by the National Electric Power Regulatory Authority to BEPL for its 11.664 MWp Solar power plant located near Fort Marot at Cholistan, District Bahawalnagar, Punjab, pursuant to Section 15 of the Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997). 2. Please quote above mentioned Generation Licence No. for future correspondence. Enclosure: Generation Licence . 0 (SPGL/06/2014) i ifli 'REciaSTRAR 3-' illli ( L (Syed Safeer Hussain) Copy to: Chief Executive Officer, Alternative Energy Development Board (AEDB), 2nd Floor, OPF Building, G-5/2, Islamabad. 2. Chief Executive Officer, NTDC, 414-WAPDA House, Lahore 3. Chief Operating Officer, CPPA, 107-WAPDA House, Lahore 4. Chief Executive Officer, Multan Electric Power Company (MECO), MEPCO Complex, WAPDA Colony, Khanewal Road, Multan 5. Director General, Pakistan Environmental Protection Agency, Plot No. 41, Street No. 6, H-8/2, Islamabad. National Electric Power Regulatory Authority (NEPRA ) Determination of the Authority in the Matter of Generation Licence Application of Buksh Energy (Private) Limited June 23, 2014 Application No. LAG-235 (A). Background (i). Government of Pakistan has set up Alternative Energy Development Board (AEDB) for development of Renewable Energy (RE) resources in the Country. AEDB has issued Letter of Intent (Lol) to various RE developers for setting up projects in the country. (ii). AEDB issued an Lol to Buksh Energy (Private) Limited (BEPL) for setting up a 10.00 MW Solar Photo Voltaic (PV) Power Generation Project in District Bahawalpur/Lodhran in the Province of Punjab. According to the terms and conditions of the Lol, the sponsors were required to carry out a detailed Feasibility Study (FS) for the project. The Sponsors hired different consulting firms for completing the FS. These included Suggur Energy Limited, U.K., Power Planner International U.K. and Engineers Guild Lahore. BEPL completed the FS and submitted the same to AEDB for the approval of its Panel of Experts (PoEs). (iii). The Authority through its Determination No. NEPRA/UTS-01/777-779, dated January 21, 2014 announced an Upfront Tariff for setting up PV Solar Power Plants in the Country. BEPL decided to unconditionally accept the above mentioned Up-Front Tariff on the standard terms and conditions as given in the said Determination. Further, BEPL also decided to approach the Authority for the grant of Generation Licence. (B). Filing of Generation Licence Application (i). In accordance with Section 15 of Regulation of Generation, Transmission and Distribution of Electric Power Act 1997 (the NEPRA Act), BEPL filed an application on February 11, 2013, requesting for the grant of Generation Licence. (ii). The Registrar examined the application to confirm its compliance with the NEPRA Licensing (Application and Modification Procedure) Regulations, 1999 (the "Regulations"). The Registrar observed that the application of BEPL was not compliant with the provisions of the Regulations. Accordingly, BEPL was directed for submitting the missing information. BEPL submitted the missing information in piece meal and the latest information was received on July 04, 2013. (iii). After the completion of the information as stipulated in the Regulations, the Authority admitted the application of BEPL under Regulation 7 of the Regulations on August 23, 2013 for consideration of grant of a Generation Licence. The Authority also approved the Notice of Admission (NoA) to be published in daily newspapers, for seeking comments of the general public as stipulated in Regulation 8 of the Regulations. (iv). The Authority also approved the list of interested/affected parties for inviting comments or otherwise assisting the Authority in the matter as stipulated in Regulation 9 of the Regulations. Accordingly, NoA was published in one Urdu and one English National Newspaper on August 27, 2013. Further, separate notices were also sent to Individual Experts/Government Ministries/Representative Organizations etc. on August 28, 2013 for submitting their views/comments in the matter. Page 2 of 5 (c). Comments of Stakeholders (i). In reply to the above, the Authority received comments from one (01) stakeholder. This included Central Power Purchasing Agency (CPPA) of National Transmission and Despatch Company Limited (NTDC). (ii). The salient points of the comments offered by the above stakeholder are summarized in the following paragraphs: - (a). CPPA remarked that the proposed project would be based on RE resource and would be beneficial to the customers as well as society at large. Therefore, the grant of Generation Licence to BEPL is supported subject to the fulfilling of the regulatory and Policy requirements. However, BEPL would have to ensure that proposed plant would comply with the latest version of Grid Code to be approved by NEPRA. In view of the very small capacity of the project i.e. 10 MW, the project is to be connected at 11 kV level and the Power Purchaser will be the concerned DISCO i.e. MEPCO. (iii). The perspective of BEPL on the aforesaid position of CPPA was sought. In its rejoinder. BEPL submitted that its representative attend the last meeting on the invitation of Chairman Grid Code review panel, held on September 20, 2013. BEPL agrees to the proposed addendum to the Grid Code for injecting the solar power to National Grid as decided in the said meeting. Further, BEPL confirmed that its Proposed Plant would comply with latest Grid Code to be approved by the Authority. (iv). The Authority considered the comments of the stakeholders and the rejoinder of AEPL in its Regulatory Meeting (RM-14-227), held on April 23, 2014 and found the same satisfactory. In view of the said, the Authority considered it Page 3 of 5 appropriate to process the application of AEPL for the grant of Generation Licence as stipulated in the Regulations and NEPRA Licensing (Generation) Rules 2000. (D). Grant of Generation Licence (i). Energy, especially Electricity is considered the lifeblood for the Economy of any Country. The sustainable and affordable energy is a key prerequisite for socio-economic development of any Country. In fact, the Economic Growth of any Country is directly linked with the availability of safe, secure, reliable and cheaper supply of electricity. In view of the said reasons, the Authority is of the considered opinion that for sustainable development, all indigenous power generation resources including RE must be developed on priority basis. (ii). The existing energy mix of the country is heavily skewed towards the costlier thermal power plants, mainly operating on imported furnace oil. The continuously increasing trend in fuel prices is not only creating pressure on the precious foreign exchange reserves of the country but is also an environmental concern. Therefore, in order to achieve sustainable development it is imperative that indigenous RE resources are given priority for power generation and their development is encouraged. The Energy Security Action Plan 2005 (ESAP) approved by the Government of Pakistan, duly recognizes this very aspect of power generation through RE and envisages that at least 5% of total national power generation capacity (i.e. 9700 MW) is to be met through RE resources by 2030. The Authority considers that the proposed project of BEPL is consistent with the provisions of ESAP. The project will help in diversifying the energy portfolio of the country. Further, it will not only enhance the energy security of the country by reducing the dependence on imported furnace oil but will also help reduction in carbon emission by generating clean electricity, thus improving the environment. (iii). The term of a Generation Licence under the Rules is to be commensurate with the maximum expected useful life of the units comprised in a generating facility. According to the Determination of the Up-Front Tariff, the Control Period for the Project for Solar Projects has been estimated to twenty five Page 4 of 5 (25) years from Commercial Operation Date (COD) of the Project. It is envisaged that based on the Up-Front Tariff, BEPL will be negotiating an Energy Purchaser Agreement (EPA) with the Power Purchaser, commensurate with the said Control Period. Therefore, the Authority fixes the term of the Generation Licence of BEPL to twenty five (25) years from COD of the Project. (iv). In view of the above, the Authority hereby decides to approve the grant of Generation Licence to BEPL on the terms set out in the Generation Licence annexed to this determination. The grant of Generation Licence will be subject to the provisions contained in the NEPRA Act, relevant rules and regulations framed there under. Authority Maj. (R) Haroon Rashid Member • Khawaja Muhammad Naeem Member