ISLAMABAD: Amid provincial concerns, the Cabinet Committee on Energy (CCoE) on Thursday approved the Indicative Generation Capacity Expansion Plan (IGCEP) 2021-30 with the focus on pursuing renewable and nuclear energy projects.

A meeting of the CCoC, presided over by Planning Minister Asad Umar prevailed over the agitating provincial representatives while approving the IGCEP for submission to the Council of Common Interests (CCI) with the promise that the provinces’ projects currently under implementation would be completed as per the commitments.

The power division put on record that if projects being pushed by the provincial governments, particularly Sindh and Khyber Pakhtunkhwa, and the Strategic Plan Division (SPD) were included in the 10-year plan, the federal exchequer would have to bear an additional burden of Rs1.353 trillion and electricity tariff would have to be increased by about Rs1.30 per unit.

It was, therefore, agreed with consensus to follow “the principle of least cost based capacity addition” as originally advocated by the National Transmission and Dispatch Company and consented to by the federal cabinet in April this year. “Such planning will target optimum future capacity addition at the most affordable cost, ensuring the cheapest electricity for consumers”, an official statement said.

Focus will be on pursuing renewable, nuclear energy projects

It said the IGCEP envisioned “the commissioning of a portfolio of new generation projects including many hydropower projects, Thar coal-based projects, K-3 nuclear power plant, and over 4,000MW of solar and wind-based renewable energy projects”.

Informed sources said the SPD was advocating three new nuclear power plants for future under government-to-government arrangement with China but these could not be accommodated for completion in this round, except for K-3 currently under implementation. The power division insisted that the original set of IGCEP assumptions approved by the federal cabinet on April 27 should form the basis of its approval by the CCI.

The Planning Commission said the IGCEP approved on Thursday would mean that 88 per cent of the total capacity addition from 2022 to 2030 would come from indigenous fuel and the remaining 12pc from those projects which were committed before the Pakistan Tehreek-i-Insaf came to power. “Fossil fuel has more than 50pc share of generation capacity right now, however, in the 2022-2030 period the share of fossil will be only 25pc,” the Planning Commission said, adding all new project commitments were based on indigenous fuel.

Under the approved IGCEP, the generation mix of 2022, which is dominated by fossil fuel, will shift to clean energy (hydel, solar, wind, nuclear) by the year 2030. Moreover, during the same period, indigenous fuel-based generation against imported fuel-based generation is going to improve from 69pc to 87pc of total fuel-based generation.

Informed sources said Khyber Pakhtunkhwa Finance Minister Taimoor Jhagra was protesting till the end of the meeting that KP’s hydropower projects had not been accommodated but then Sindh representatives said that their province had relaxed its stance in the larger interest and KP should also not push for project-specific debates.

Minister Asad Umar told the KP finance minister that the federal government had facilitated his province to a maximum possible level.

The meeting was told that the IGCEP would now be a yearly iterative process and the concerns of the provinces regarding their projects would continue to be discussed for the next iteration of the IGCEP and hence the current document should be cleared with further debate to secure World Bank loan next month. It was also explained that the methodology and criteria for strategic projects would be finalised in consultation with the provinces under the national electricity policy within two months.

The CCoE also decided that apart from the least cost principle, the projects only approved by the Executive Committee of the National Economic Council would be included in the rolling IGCEP in future. This was based on the power division’s strong position that “provincial public sector projects with secured financing be included in committed projects subject to agreement of the planning commission”.

Published in Dawn, August 27th, 2021