ISLAMABAD: Contesting objections by the federal entities, the Khyber Pakhtunkhwa government is pushing for a transmission and grid system licence to ensure evacuation of about 7,300MW of its power generation lined up through substantial local and foreign investment.

The National Transmission and Disptach Company (NTDC) and Central Power Purchase Agency (CPPA) had last month opposed the grant of transmission licence to the Pakhtunkhwa Transmission & Grid System Company (KPT&GSC), saying the existing law allowed only one system operator in the country and the matter fell under Article 154 of the Constitution and hence a policy decision had to originate from the forum of Council of Common Interests (CCI).

The KP government has, however, contested these assertions on legal, technical and financial basis of the evolving power market, saying KPT&GSC has to be established sooner than later as a support for the country’s ailing power market and helping stabilise the national grid in events like the recent countrywide power breakdown.

It said the federal entities were apparently creating a deliberate confusion about functions and powers of the CCI for the fact that the council was empowered to formulate and regulate policies relating to matters enumerated in Part-II of the Federal Legislative List (including electricity), but it could not legislate —an absolute right of parliament under Article 70 of the Constitution.

Federal entities say law allows only one system operator in country

Under these supreme and unfettered powers, parliament had made amendments to the Nepra Act which permitted the establishment of a provincial grid company and empowered the National Electric Power Regulatory Authority to issue a transmission and grid licence. The KP government said the federal entities were taking a “misguided contention” that functionality of Section 18A of the Nepra Act had to take place once the government announced a new policy.

It argued that based on the contention of NTDC and CPPA, the licence of NTDC should be suspended until such a policy was formulated as without formulation of the policy, NTDC was operating transmission lines and was integrated with the transmission system of Sindh Transmission and Dispatch Company (STDC) which was a provincial entity. Also, the transmission system of NTDC was connected to the transmission network of K-Electric which was a private company.

The KP government has written to the regulator that various hydropower projects currently in various stages of implementation in the province would make available about 7,320MW of cheaper electricity over the next 10-15 years. These plants are located in Chitral, Dir, Kohistan, Swat and Mansehra.

The evacuation of half of the power (nearly 3500MW) mainly from Chitral and Swat regions is a great challenge for KP as the commercial operation dates (CODs) will stand matured by 2027.

However, the KP government has unfortunately encountered indefinite delays from NTDC which had its own impediments. Firstly, NTDC was focused towards electricity evacuation as dictated by indicative generation capacity expansion plans (IGCEPs) that were further tied up with the government directives and priorities. Secondly, difficult northern terrains to find suitable transmission corridors also delayed the mega hydropower projects on the national level, besides internal limitations of NTDC.

The KP government said the federal government wanted hydropower and other renewable sources to get rid of the expensive thermal ones, but strangely the IGCEP committed 215MW evacuation from the province till 2030 and pushed the remaining 3,300MW mature projects beyond 2045-47.

As for the system operator is concerned, the KP government has contended that various power networks can be operated in integrated and discrete fashions as in other countries. For example, Kuwait, Saudi Arab, Qatar and Bahrain have different system voltages, frequencies and system operators and yet have been operating in an integrated manner for decades for import and export of electricity in a mutually agreed grid code and with no system disturbances.

Also, K-electric with its own generation, transmission and dispatch is linked through a mutually agreed “common connecting node” with NTDC for 600-700MW. A similar arrangement can be made between NTDC and KPT&GC on the northern side.

The KP government criticised NTDC for securing a system operator licence in 2003 but failing to meet its responsibility of having judicious network expansion, control and dispatch mechanism to meet emergencies and market challenges.

Citing the recent countrywide blackout, the KP government said that had KPT&GSC been fully operational, even the half of 7,322MW on bars would have averted the breakdown with the help of latest technology by isolating its network to ‘island mode’ and help early restoration.

It asserted that the delay in evacuation of power under the NTDC’s plans would cause a big blow to KP’s power expansion plans as hundreds of millions of dollars of investment injected by investors would turn non-productive and provide zero return to the investors for years and deprive the province of about Rs2 trillion in revenue in 20-25 years. On top of that, the presence of multiple grid companies would develop the competitive electricity market, instilling an element of competition to NTDC instead of living in old ages, it argued.

Published in Dawn, February 8th, 2021