KARACHI: The National Electric Power Regulatory Authority (Nepra) Friday has approved upfront tariff of Rs 7.82 per kilowatt-hour (kWh) for power generation through bagasse by existing sugar mills, said a document.
The authority said that the decision is being intimated to the federal government for the purpose of notification in the official gazette.
According to break up, the upfront tariffs for existing sugar mills are consisted of Rs 6.29 per kWh for fuel cost component and Rs 1.53 per kWh for fixed cost component, making total of Rs 7.82 per kWh.
Bagasse is the fibrous matter that remains after sugarcane or sorghum stalks are crushed to extract their juice and it is being used as a renewable power generation source nowadays.
In February 2016, the authority decided to initiate the suo-moto proceedings for determination of upfront tariff for existing sugar mills. After due consideration with stakeholders, the Nepra determined and approved the upfront tariffs, for generation of electricity from existing sugar mills, for delivery of electricity to the power purchaser on take and pay basis. Fuel cost component of tariff will be adjusted on account of variation in price of fuel (bagasse) on yearly basis in advance. The Nepra said there is a potential of 600-700 MW in the form of sugar mills which started crushing in the country during November to February the period when the hydel is on lower side.
As per Pakistan Sugar Mills, currently 86 sugar mills are working in Pakistan. Government of Pakistan in order to encourage generation on bagasse approved the framework in 2013 by including the bagasse / biomass in the renewable policy 2006.
Nepra has already announced the Upfront Tariff for Co-Generation Power Projects which are required to establish their power plants on new machines and as per terms and conditions laid down in the decision dated 29th May 2013.
Almost seven companies have opted the upfront tariff having capacity of 231 MW capacity. Out of which 139.7 MW are operational and around 92 MW is expected to be added in the system in 2016-17. Most of the sugar mills have their basic core business of sugar production. During this process electricity is generated which is not only sufficient to meet their own requirement but surplus energy can be added into the system. Keeping in view this potential which is expected around 600-700 MW.
Nepra has already allowed the distribution companies to procure electricity from the existing sugar mills in accordance with the procedure laid down in the law. Nepra in this regard has already approved the Power Acquisition Contract of different companies i.e. HESCO, PESCO, SEPCO, LESCO & MEPCO. Almost 24 sugar mills are providing around 125 MW electricity through the existing mechanism as per Nepra approved tariff and terms and conditions.