KARACHI: It seems certain elements are not in favor of development of alternate energy particularly solar power in Pakistan while some fear whether some quarters were pursuing the agenda of derailing China Pakistan Economic Corridor (CPEC).
Sector analysts believe that victimization rather red-taping CPEC projects could shake the confidence of Chinese government as well as investors.
Foreign investors have expressed their dismay over government’s intentional delay in awarding upfront tariff for their solar power projects raising questions over the sovereignty of government institutions.
In order to spur investment growth in the renewable energy sector, National Electric Power Regulatory Authority (NEPRA) determined the upfront tariff
for solar power plants at $14.15 per kWh (unit) for the year 2015, which was significantly low from the 2014’s upfront tariff of $16.31 per unit.
For the year 2016, NEPRA has proposed the solar power upfront tariff at $9.25 per unit, which has not been finalized as yet.
A notification in July 2015 assured the investors and development firms that the upfront tariff of $14.15 per unit could be accepted by the end of December 2015.
A solar power developer informed after the subject notification they spent significant amount of money for completing all the paperwork and relevant
studies to secure the tariff notified for 2015.
“However, the authorities have employed delaying tactics and are not awarding the tariff to developers,” a solar power developer said.
“This $14.15 per unit is already the minimum feasible rate and any further reduction in this tariff would make it unfeasible for them to continue with
their projects,” he said.
Commenting on the situation, Minister of Electricity &Power, Khawaja Mohammad Asif said they were reviewing the situation. We are reviewing the
tariff and grid availability and after the review is complete, the tariff might be awarded to the intending companies.
Around five applications are lying with the NEPRA suggesting acceptance of solar power upfront tariff, of which one is also included in the China Pakistan Economic corridor (CPEC), and government’s apathy towards the worries of foreign investors would send a bad message to the international community.
The proposed tariff of 9.25 cents would be applicable from January 2016 and the companies who were awarded the existing tariff would have to accept the
revised tariff from 2016.
Representative of a solar power company attending the solar power conference here, said that the concerned authorities were acting against the ethics as the companies who had completed all requirements should be awarded tariff as “delaying the process on one pretext or another to pass the time was unethical and immoral.”
A local company working with a foreign developer said the conference would serve no purpose in attracting new investors adding that the companies who
already had received letter of intent were planning to leave.
Pakistan is feared to lose billions of dollars of investments in solar power projects in the face of a government plan to bring down the tariff on this renewable energy source.
Prospective foreign investors, who have planned to establish solar energy projects inthe country, are increasingly worried over the proposed reduction in tariff, as this would deprive them of the incentive.
They are also uncertain whether their projects would see the light of day after the tariff cut, though they have already invested millions of dollars in feasibility studies and other formalities.