NEPRA Hearing: NTDC Admits Unjustified Projects Included in IGCEP 2021-30
ISLAMABAD: The revised draft of the Indicative Generation Capacity Expansion Plan (IGCEP) 2021-30 prepared by the National Transmission Dispatch Company (NTDC) has generated criticism for violating the grid code and criteria under the NEPRA Act which states that future projects will be made with the lowest cost generation, location and capacity in mind.
However, the NTDC has established its own 5-6 criteria for including 25-30 unjustified projects in the plan. One of the NTDC board members surprised all the players in the electricity sector, including the provinces when he acknowledged that he had established 5-6 criteria for project adaptation in the revised draft of the IGCEP due to the intervention of the Ministry of ‘Power.
All of this was developed here on Tuesday during the one-day hearing on the Indicative Generation Capacity Expansion Plan (IGCEP) 2021-30. Instead of being praised for the draft, NTDC drew criticism not only from NEPRA members but also from Sindh, KPK, and AJK governments and other interested parties
NTDC has established various criteria for staunched and indicative power projects that irritated NEPRA members a lot.
NTDC has created a team whereby projects have LOS from PPIB and are G2G and approved PC-1 will qualify for committed projects.
KPK criticizes the non-inclusion of its projects in the IGCEP 2021-30 plans despite these having requested approvals and funding commitments from PC-I and so much so that its projects also have generation and tariff licenses.
The Sindh government says its Dadu project was not included in the plan despite PC-I approval and has also pledged to fund the project.
However, under the 2021-30 IGCEP, the existing peak demand is 24,106 mw, which was projected to be 28,322 mw in 2025 and 34,377 mw in 2030.
However, the country’s installed capacity to generate electricity stands at 34,100 mw will be reduced up to 46,504 mw and will continue to increase to 53,315 mw in 2030.
Industrial energy sources after the hearing told The News that the most important plan prepared by NTDC for the Ministry of Energy was shrouded in mystery and controversy.
The indicative generation capacity expansion plan was prepared by NTDC’s planning division under the direction of a world-renowned consultant.
The IGCEP was based on strict rules issued by the Cabinet Energy Committee and was programmed in software called PLEXOS; The idea is that the most suitable power plants for the country are selected without any human intervention and without corruption.
The PLEXOS output was presented to the NTDC board of directors where, on instructions from the Ministry of Energy, manual changes were made to the output generated by the software to suit preferred power plants.
Mandarins, however, are unaware that PLEXOS stores all changes in its database. They said it is necessary to investigate why this fully computerized process has been modified by verbal instructions.
They said some ministry officials were behind the exclusion of many eligible projects from the list of committed projects.
They said the actual report had been moderated by the NTDC board on May 27 and then the NTDC submitted the revised document to NEPRA and the World Bank.
The Thar coal-based Oracle project was also not included in the 2021-23 IGCEP and its London sponsor said during the hearing that it is a baseload project that will not affect foreign exchange reserves.
“The state-owned company NTDC gave the wrong signal to foreign investors by not being part of the IGCEP,” he said.
However, during the hearing, the situation became tense when Dr Fiaz Chaudhry, head of the energy department of the LUMS, in his strong remarks said that state agencies first go to the execution and then start thinking about planning. He said the emphasis should have been on providing cheaper electricity to consumers.
He said NTDC does not have the power to reject committed projects.
He also pointed out that NTDC prepared the IGCEP document based on a pseudo simulation and also ignored the guidelines of the network code.
He also hired NTDC for including unfunded projects in the committed projects list. He said it appears the government agency hasn’t learned in the past three years and the government agency shouldn’t keep making mistakes.
He said the government is not adhering to the established planning procedure and has not conducted any assessment before making such a document.
He said this has been done without planning just for corruption. These remarks offended the NEPRA chairman who plugged off Dr. Fiaz who was on a video link during the hearing.
Dr. Fiaz Chaudhry had previously criticized the IGCEP document, saying that, if implemented, it will further aggravate the situation in terms of capacity payments and the country will fall into another capacity trap.