KARACHI: The National Electric Power Regulatory Authority (NEPRA) on Friday approved and determined new benchmark tariffs of $6.7467 per kilowatt-hour (kWh) and $ 7.7342/kWh for power generation through wind power, according to a document.
NEPRA in its order states that it has determined and approved the benchmark leveled tariff for competitive bidding by relevant agencies for wind power generation, for delivery of electricity to the power purchaser as the new benchmark leveled tariff on 100% foreign financing discounted at 10% per annum works out to US cents 6.7467/kWh while on local financing, benchmark leveled tariff works out to US cents 7.7342/kWh.
The last upfront tariff for wind power generation was determined by NEPRA in June 2015 which was valid till June 2016. In order to decide whether to continue the upfront tariff regime or to shift towards a competitive bidding mode, the authority initiated suo moto proceedings.
During the proceedings, the majority of interveners were of the view that to ensure transparent and competitive bidding, one of the most important factor is the creation of level playing field for all the potential investors which is not presently the case in Pakistan. A number of projects have been issued Letter of Intents (LOIs) which are at different stages of project development. These developers have in most cases installed wind masts and conducted detailed feasibility studies. Hence, introducing competitive bidding at this stage will result in losses to the investors and delays in the development of wind sector, the interveners added.
The participants further submitted that carrying out an effective competitive bidding process requires extensive planning, standard documentation, simple framework and clear policies and stated that in the absence of proper framework, initiating competitive bidding process would only cause uncertainty and delays. However, NEPRA was not inclined to accept their concerns that international prices are quoted less to win the project. The Authority further considers that the procurement of power under transparent competitive process is most appropriate as it can fetch realistic prices based on the prevailing conditions of the market.