Distributed generation continues on a steep growth trajectory

Javed Mirza Web Editor

02nd Oct, 2021. 03:53 pm

KARACHI: The National Electric Power Regulatory Authority (Nepra) has issued a total of 8,417 net-metering licences with the accumulated capacity of 146MW during FY21.

The growth of distributed generation in Pakistan reveals a very steep positive trend line; from 1MW in 2016 to 3MW in 2017, 10MW in 2018 and then a sudden big jump in 2019 with the addition of 32MW, registering a growth of 220 per cent from 2018/19.

“There has been a growing trend for net-metering, as well as distributed generation through solar plants for [the] sale to bulk power consumers given high electricity prices by the distribution companies,” the authority noted in its latest report.

The total installed capacity of net-metering consumers as of June 30, 2021 reached around 232MW. “[The] induction of distributed generation, either through net-metering or in isolated mode, is good for the power sector on several accounts,” Nepra noted.

The distribution companies; however, view the growing trend for net-metering and other distributed generation as a threat for their consumer base.

“DISCOs [distribution companies] need to realise that the power sector is gradually opening up for competition where retention of consumers will depend on improved quality of service and reduced cost for [the] end consumer.”

For a country like Pakistan, distributed generation offers not only one of the most promising solutions to advancing the clean energy transition but also an optimal opportunity to reliable supply access and energy access at lower prices than conventional energy.

Any significant growth in it will also contribute to achieving the sustainable development goals on energy and climate action.

Despite all challenges, the induction of cheap and environment-friendly renewable energy power plants to displace the costlier electricity is the need of the hour. The renewable energy resources are viewed as indigenously available cheap sources of electric power generation. However, since these plants cannot replace the base load plants due to intermittency; it is important to induct the appropriate share of the renewable energy in the generation mix.

The authority observes while the lack of generation capacity hampers the economic activities and social life of the people, the excess capacity, amid the “Take or Pay” and “Must Run” obligation, create an undesirable burden on the economy; a situation the country is currently going through.

“Therefore, a robust planning process needs to be put in place for integrated planning for expansion of generation capacity based on the accurate demand forecast, selection of best suitable location, technologies, optimum generation mix, gradual induction of new plant, while retiring the old inefficient plants without delay, concomitant transmission and distribution system upgradation and expansion, etc.”

Nepra stressed that the evaluation of the viability of inducting new power plants should not be limited to the extent of generation tariff but its impact on the tariff for the end-consumer should be kept in consideration.

To induct the new capacity to displace the costlier electricity, during FY21, Nepra granted generation licences to 27 companies for accumulated capacity of around 1,591MW. These licences include, four hydropower plants for accumulated capacity of around 294MW; 18 solar power plants with the accumulated capacity of around 49MW; two licences to bagasse/biomass power plants with the accumulated capacity of around 47MW; one to nuclear power plant with the capacity of 1,145MW; one licence to the coal-based power plant with the installed capacity of 55MW and one licence was granted to a 350kW hybrid (solar+biogas) power plant.

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