Pakistan’s Nepra mulls another 50 MW of solar

Pakistan’s National Electric Power Regulatory Authority (NEPRA) has received an application for a 50 MW generation license from Artistic Solar Energy (Private) Limited.

According to the documentation submitted, Artistic Solar intends to install a PV plant in Saleh Pat in the district of Sukkur, in the Sindh region. Should the plant be granted a license, it will start commercial operation by 2021 and the electricity generated will be sold to the Central Power Purchasing Agency (Guarantee) Limited.

The estimated project costs are $45 million, with $36 million provided by debt financing and $9 million as equity.

The energy tariff to be paid for the solar power generated has not been determined.

The Renewables Readiness Assessment: Pakistan report produced by the International Renewable Energy Agency (IRENA) in April predicted the nation’s renewables market will eventually widen to include unsolicited project applications to NEPRA but it has not done so yet. The regulator has set in motion a process to establish competitive bidding auctions.

Tariff options

For unsolicited projects, asset owners can opt for either “cost-plus” or “upfront tariffs”. In each instance NEPRA determines “the technical and financial parameters for capital and operating expenditures and applies a rate of return on equity”, according to the IRENA report. Under cost-plus, a project owner files a proposed tariff which the regulator will review and adjust if necessary. The upfront tariff involves NEPRA and other relevant agencies predetermining tariffs for specific project types and inviting industry representatives and experts to comment before setting a final feed-in payment. In each case the tariff will apply for 25 years.

In January, for example, the Javed Solar Park filed an application for the 25-year tariff for a 49.5 MW solar plant. The company proposed a tariff of $0.0855/kWh for the first 11 years, $0.0565 for the next two years and $0.02969 for the remainder of the contract. The levelized tariff would be $0.07145/kWh, according to an announcement made by NEPRA.

For projects with a generation capacity of 50-100 MW, the tariff has come down from $0.14/kWh to $0.05.

The global outlook report produced by PV industry body SolarPower Europe has predicted Pakistan will see close to 5 GW of solar generation capacity installed by 2022, up from around 1 GW at present.