Solar Power Plant/Solar Farm at Rakh Mankera, Tehsil Mankera, District Bhakkhar in the Province of Punjab
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National Electric Power Regulatory Authority 4. Islamic Republic of Pakistan NEPRA Tower, Attaturk Avenue (East), G-511, Islamabad Ph: +92-51-9206500, Fax: +92-51-2600026 Registrar Web: www.nepra.org.pk, E-mail: [email protected] No. NEPRA/R/DL/LAG-450/0?"-- January 10, 2020 Mr. Charles Anton Milner, Director, 2- T.-a (44-4 quAi Lahore 54000. Subject: Grant of Generation Licence No. SPGL/32/2020 Licence Application No. LAG-450 K1 Solar Power Lahore (Private) Limited (K1SPLPL) Reference: KISPLPL's application vide letter dated nil (received on April 11, 2019). Enclosed please find herewith Determination of the Authority in the matter of Application of "K1 Solar Power Lahore (Private) Limited (KISPLPL)" for grant of Generation Licence along with Generation Licence No. SPGL/32/2020 annexed to this determination granted by the National Electric Power Regulatory Authority (NEPRA) to KISPLPL for its 15.00 MW Solar Power Plant located at Lot No. 302, New Chak No. 3, Rakh Mankera, Tehsil Mankera & District Bhakkhar, in the province of Punjab, pursuant to Section 14-B of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997/Amendment Act, 2018. 2. Please quote above mentioned Generation Licence No. for future correspondence. \NER Rtc Enclosure: Generation Licence (SPGL/32/2020) REGISTRAR (Syed Safeer Hussain) 10 0 12v Copy to: NEPO 1. Secretary, Ministry of Energy, Power Division, A-Block, Pak Secretariat, Islamabad. 2. Chief Executive Officer, NTDC, 414-WAPDA House, Lahore. 3. Chief Executive Officer, CPPA-G, ENERCON Building, Sector G-5/2, Islamabad. 4. Chief Executive Officer, Alternative Energy Development Board (AEDB), 2nd Floor, OPF Building, G-5/2, Islamabad 5. Chief Executive Officer, Faisalabad Electric Supply Company (FESCO), Abdullahpur, Canal Bank Road, Faisalabad. 6. Director General, Environment Protection Department, Government of Punjab, National Hockey Stadium, Ferozepur Road, Lahore. National Electric Power Regulatory Authority (NEPRA) Determination of the Authority in the Matter of Application of K1 Solar Power Lahore (Private) Limited for the Grant of Generation Licence January 4°, 2020 Case No. LAG-450 (A). Background (i). In order to harness the potential of Renewable Energy (RE) resources in the country, the Government of Pakistan (GoP) formulated a policy titled Policy for Development of Renewable Energy for Power Generation 2006 (the "RE Policy"). The said policy had been in field since 2006 under which both Federal Government and the Provincial Governments had been supporting the implementation of RE projects in the country. (ii). In consideration of the above, the Federal and Provincial Governments had been issuing Letter of Intent (Lol) to various developers for setting up different type of RE projects across the country. In this regard, Govt. of Punjab (GoPb) through Punjab Power Development Board (PPDB) issued Lol to a consortium of ib Vogt GmbH and Milner Vermogensverwaltungs GmbH /the Sponsor(s) for setting up an approximately 15.00 MW solar based generation facility/Solar Power Plant/Solar Farm at Rakh Mankera, Tehsil Mankera, District Bhakkhar in the province of Punjab. In order to implement the project, the Sponsors got incorporated a Special Purpose Vehicle (SPV) in the name of K1 Solar Power Lahore (Private) Limited (K1SPLPL). (iii). According to the terms and conditions of the Lol, the Sponsors were required to carry out and complete the feasibility study of the project at internationally acceptable standards. In consideration of the said, the Sponsors hired the services of different consultants and completed the feasibility study of the project which was approved by the Panel of Exp appointed by Page 1 of 17 PPDB. After the said, K1SPLPL decided to approach the Authority for the grant of generation licence. (B). Filing of Application (i). K1SPLPL submitted an application on April 11, 2019 for the grant of generation licence in terms of Section-14B/Section-15 of Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (the "NEPRA Act") read with the relevant provisions of the NEPRA Licensing (Application and Modification Procedure) Regulations, 1999 (the "Licensing Regulations"). (ii). The Registrar examined the submitted application to confirm its compliance with the Licensing Regulations and observed that the application lacked some of the required information/documentation. Accordingly, K1SPLPL was directed for submitting the missing information/documentation and the same was received on April 12, 2019. The Registrar submitted the application for the consideration of the Authority to decide the admission of the same or otherwise. The Authority considered the matter and found the form and content of the application in substantial compliance with Regulation-3 of the Licensing Regulations. Accordingly, the Authority admitted the application on May 23, 2019 for consideration of the grant of the generation licence as stipulated in Regulation- 7 of the Licensing Regulations. The Authority also approved a notice of admission to be published in the press for inviting comments of general public, interested and affected persons in the matter as stipulated in Regulation-8 of the Licensing Regulations. Accordingly, the said notices were published in one (01) Urdu and one (01) English newspapers on May 28, 2019. (iii). In addition to the above, the Authority also approved a list of stakeholders for seeking their comments for assistance of the Authority in the matter in terms of Regulation-9(2) of the Licensing Regulations. Accordingly, letters were sent to different stakeholders as per the approved list on May 28, 2019, soliciting their comments for assistance of the Authority. Page 2 of 17 (C). Comments of Stakeholders (i). In reply to the above, the Authority received comments from two (02) stakeholders including Ministry of Science and Technology (MoST) and Central Power Purchasing Agency (Guarantee) Limited (CPPAGL). The salient points of the comments offered by the said stakeholders are summarized in the paragraphs as mentioned below:- (a). MoST submitted that company is planning to set up a Photovoltaic (PV) based generation facility/Solar Power Plant/Solar Farm with a cumulative installed capacity of 15.00 MW near Mankera, district Bhakkar which will help to prevent/overcome the shortfall of electricity. The type of technology for the PV cells being deployed is Mono Crystalline which is recommended. It is recommended that Tier-I manufacturer of the PV Cells should be selected for the project which should be IEC and UL certified; and (b). CPPAGL stated that it has neither issued any consent nor any Power Acquisition Request (PAR) in respect of the project being set up by the company. As per PC-4 (the Planning Code of the Grid Code), NTDC is required to prepare and submit to the Authority/NEPRA each year, a Ten-Year "Indicative Generation Capacity Expansion Plan (IGCEP)" covering 0-10 Year timeframe. The said plan identifies new capacity requirements, location and commissioning date which should satisfy Loss of Load Probability criteria, load growth forecast, operating reserve requirements, and other planning criteria. The Authority is required to be cognizant of the above provisions of the Grid Code while considering new addition of capacity into the national grid. The Cabinet Committee on Energy ("CCoE") has already decided that "...all projects based on wind, )iv Page 3 of 17 solar, small hydel and bagasse energy will be awarded through competitive bidding after the allocation of quota of RE by the Grid Code Review Panel. Accordingly, for any induction of additional capacity into the national grid, due consideration must be carried out at the NEPRA level prior to the grant of a generation license to the project. At present, any increase in capacity will place additional burden on the network as well as increase the financial impact on the end consumers. CPPAGL wishes to consider the induction of the proposed project into the system in view of the aforementioned. In light of the said, it is considered that the Authority must consider the application for grant of generation licence duly considering the demand vs. supply situation alongwith with the quantum of RE to be inducted in the National Grid. (ii). The Authority reviewed the above comments of the stakeholders and in view of the observations of MoST and CPPAGL, considered it appropriate to seek the perspective of K1SPLPL. On the observations of MoST, it was submitted that the Lol issued to the company, envisaged setting up an approximately 15.00 MWp project. The size of the project have been optimized to 14.96 MWp keeping in view of the constraints pertaining to nearby located 66/11 kV grid station of Mankera to which the generation facility will be connected. The company confirmed that the proposed PV cells would be Tier-I. (iii). About the comments of CPPAGL, it was stated the company is following the due process to get the consent of the Power Purchaser/CPPAGL and for filing PAR for which award of Generation Licence and award of tariff is a pre requisite. The Indicative generation plan and future demand forecast is the subject of Planning Department of NTDC which is to be approved by the Authority. The Govt. of Pakistan is considering the share of RE from existing 5% to 30% by 2030 in the total energy mix which will result in affordable electricity to the National Grid and reduction in burden to the end .:• er fuel adjust U./ REGISTRAR 4,05 S,•• Page 4 of 17 charges for solar, no imported fuel cost). The Lol under discussion was awarded to the consortium after participation in the bidding of fifty (50) public sites announced by PPDB in 2015. The sponsor/consortium was awarded the pre- qualification letter after competing with other companies through PPDB bidding process of time. The consortium fulfilled all the pre-requisites of Lol, but public land at Lahore near Manawan was not awarded because the board of PPDB decided that cost of the land is too high in the area.