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Solar Power Plant /Solar Farm of Roshan Power (Private) Limited (RPPL)

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Solar Power Plant /Solar Farm of Roshan Power (Private) Limited (RPPL) National Electric Power Regulatory Authority Islamic Republic of Pakistan NEPRA Tower, Ataturk 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/LAG-263/ /t/ / 3 November 06, 2014 Rao Mahmud Ilahi Director Energy Projects Roshan Power (Private) Limited 10-11 Gurumangat Road, Gulberg-III, Lahore Subject: Generation Licence No. SPGL/08/2014 Licence Application No. LAG-263 Roshan Power (Private) Limited (RPPL) Reference: Your letter No. RPL/14/I/003 dated February 10, 2014. Enclosed please find herewith Determination of the Authority in the matter of Generation Licence Application of Roshan Power (Private) Limited (RPPL) along with Generation Licence No. SPGL/08/2014 annexed to this determination granted by the National Electric Power Regulatory Authority to RPPL for its 11.00 MW Solar Generation Facility located at Village Kundian Khas, District Kasur, 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 (SPGL/08/2014) (Syed Safeer Hussain) Copy to: 1. Managing Director, Punjab Power Development Board, 1st Floor, Central Design Building, Old Anarkali, Lahore 2. Chief Executive Officer, NTDC, 414-WAPDA House, Lahore 3. Chief Operating Officer, CPPA, 107-WAPDA House, Lahore 4. Chief Executive Officer, Lahore Electric Supply Company (LESCO), 22-A, Queens Road, Lahore 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 Roshan Power (Private) Limited October 30, 2014 Application No. LAG-263 (A). Background (i). Government of Pakistan has set up Alternative Energy Development Board (AEDB) for harnessing 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). Apart from AEDB, all the four Provincial Governments are also authorized to issue Lol to prospective private investors. Govt. of Punjab (GoPb) through Punjab Power Development Board (PPDB) issued an Lol in favor of BPS (Pvt.) Limited for setting up an approximately 10.00 MW Solar Power Plant (SPP)/Solar Farm (SF)/Generation Facility in District Kasur in the Province of Punjab. For the purpose of the implementation of the projects, the Sponsor(s) incorporated special Purpose Vehicle in Pakistan in the name of Roshan Power (Private) Limited (RPPL) under the Companies Ordinance 1984. (iii). The Authority through its Determination No. No. NEPRA/UTS-01/777- 779, dated January 21, 2014 announced an Up-Front Tariff for setting up SPP/SF in the Country. RPPL decided to unconditionally accept the above mentioned Up- Front Tariff on the standard terms and conditions as given in the said Determination. Further, RPPL also decided to approach the Authority for the grant of Generation Licence. Page 1 of 9 (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), RPPL filed an application on February 12, 2014, requesting for the grant of Generation Licence. (ii). The Registrar examined the submitted application to confirm its compliance with the NEPRA Licensing (Application and Modification Procedure) Regulations, 1999 (the "Regulations"). It was observed that some of required information/documentation was missing. Accordingly, Registrar directed RPPL for submitting the missing information/documentation. RPPL completed the missing information/documentation on March 31, 2014. The Authority considered the matter in its Regulatory Meeting (RM-14-249), held on April 24, 2014 and decided to return the application of RPPL on the pretext that the 50.00 MW cap for the SPP/SF under the existing Tariff Determination has already been exhausted. The Authority decided that RPPL may submit a fresh application for the grant of Generation Licence without linking its application for the grant of Generation Licence with the Up-Front Tariff. Before, returning the application, RPPL through its correspondence of May 29, 2014 submitted that its current application may be de-linked with the Up-Front Tariff of SPP/SF and may be treated as a regular application for the grant of Generation Licence. The Authority considered the said submissions of RPPL and admitted the application of RPPL under Regulation 7 of the Regulations on June 26, 2014 for consideration of grant of a Generation Licence. The Authority approved the advertisement about the Notice of Admission (NoA) to be published in daily newspapers, seeking comments of the general public as stipulated in Regulation 8 of the Regulations. 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. Page 2 of 9 (iii). Accordingly, NoA was published in one Urdu and one English National Newspaper on July 03-04, 2014. Further, separate notices were also sent to Individual Experts/Government Ministries/Representative Organizations etc. on July 07, 2014 for submitting their views/comments in the matter for the assistance of the Authority to arrive at an informed decision. (C). Comments of Stakeholders (i). In reply to the above, the Authority received comments from six (06) stakeholders. These included Central Power Purchasing Agency (CPPA) of National Transmission & Despatch Company Limited (NTDC), Pakistan Council of Renewable Energy Technologies (PCoRET), Board of Investment (Bol), Ministry of Science & Technology (MoST), PPDB and Ministry of Water & Power (MoW&P). (ii). The salient points of the comments offered by the above stakeholder are summarized in the following paragraphs: - (a). CPPA supported the grant of Generation Licence to RPPL subject to fulfillment of the relevant policy and other regulatory requirements. However, CPPA stressed that RPPL must comply with the requirements of the Grid Code for SPP/SF. Further, CPPA also proposed that Lahore Electric Supply Company Limited (LESCO) being the proposed Power Purchaser may be asked to comment on the Interconnection Arrangement for the Project of RPPL; (b). PCoRET in its comments expressed its No Objection to the grant of Generation Licence to RPPL; (c). Bol commented that affordable and smooth supply of energy is backbone for industrial growth as well as for attracting FDI in the country. Therefore, the grant of Generation Licence to RPPL is supported; (d). MoST endorsed the comments of PCoRET; (e). PPDB confirmed the issuance of Lol for the project in terms of the Punjab Power Policy 2006 (as amended in the year 2009). It was also confirmed that the sponsors of RPPL carried out a Feasibility Study (FS) of the project which was submitted to PPDB on March 22, 2012. The FS was presented to Panel of Experts (PoE), duly represented by all the stakeholders including LESCO. The provisional approval of FS subject to the approval of Interconnection Study by LESCO was given in the meeting of the PoE held on November 28, 2012. PPDB clarified that sponsors had remained in constant touch with LESCO for resolving the issue of the approval of the Interconnection Study of the project but no positive response was received from LESCO. After long follow up, LESCO desired for revision of Interconnection study for dispersal of power at 132 kV line, instead of 11 kV. The sponsor submitted revised Interconnection Study at 132 KV to LESCO on January 28, 2013. LESCO delayed the approval for another Nine (09) months and finally, LESCO through its letter dated November 01, 2013 asked the sponsor to approach CPPA, for purchase of power from the project of RPPL; and M. MoW&P submitted that the Authority may process the application of RPPL as per provisions of NEPRA Act, rules and guidelines of the Govt. in the matter. (iii). The Authority examined the above comments of the stakeholders and found to be supportive generally except to the observations on Interconnection Arrangement and compliance on Grid Code. In view of the said, the Authority considered it appropriate seeking perspective of LESCO and RPPL in the matter. (iv). LESCO in its comments stated that the proposed site of SPP/SF is at 20 KM from 132 KV Khudian Grid Station and Interconnection cost comes out to be more than Rs. 214 Million (including 132 KV Transmission Line, Line Bays excluding crop compensation charges on actual basis). Further, upfront tariff of SPP/SF is very high as compared to the average power purchase price on which LESCO is procuring power from CPPA/NTDC. It was submitted that the power from RPPL would be available in off-peak hours only. Therefore, the purchase of power from RPPL would increase its consumer end tariff. LESCO suggested that CPPA/NTDC may purchase power from RPPL for main basket. (v). Whereas, RPPL on the observations of NTDC confirmed that the Project would comply with the requirements of the Grid Code for SPP/SF. The Authority considered the above submission of LESCO and RPPL and decided to proceed further for the consideration of the Generation Licence as stipulated in the Regulations and NEPRA Licensing (Generation) Rules 2000 (the Rules) and Policy for Development of Renewable Energy for Power Generation 2006 (the Policy). (D). Grant of Generation Licence (i). Energy is fundamental input to economic activity, and thus to human welfare and progress. The importance of electricity in the development of the economy of any country is beyond any doubt. 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 Coal, Hydel, Wind, Solar and other RE resources must be developed on priority basis in the public and private sector.
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