New Renewable Policy promises One Window Facility for Investors

Finally Renewable Energy Policy 2019 (now it may be called as Renewable Policy 2020) has been finally approved by Council of Common Interest (CCI) of Pakistan after a long debate amongst stake holders including provinces. I can say with confidence that this time consultation was much at larger stage than before and policy almost satisfies the stake holders interests. Policy will be better and better if it is renewed and continuous basis.

The policy has major features as under,

1. Policy has set very ambitious target of 20% by 2025 and 30% by 2030..

2. IGCEP ( Indicative Generation capacity Expansions Plan 2019) by NTDC will have priority in determining the addition, displacement and replacement of Alternate and Renewable Projects (AREPs).

3. Policy includes reliability, affordability, standards, Indigenous development, Transparency, Quality, displacement of projects with more efficiency projects and skill development.

4. Policy has put emphasis of changing the role of AEDB from passive to Pro-active roles.

5. Projects procurement under the policy will now be Auction based competitive bidding for all solicited projects. For Unsolicited and G2G projects, new technology and strategic importance and neglected areas will be the driving factors in decisions making for such projects. Provinces can propose Unsolicited and G2G projects.

6. Under Article 157 of the Constitution of Pakistan, provinces are allowed to develop their own generation projects, lay transmission lines and distribute energy and set their own tariff within the boundary of their provinces. Provinces are free to institute their own policies where neither the Power off-take is by a federal entity nor the interconnection is provided by NTDC/DISCO. The contract in such cases shall be directly between Provincial Government or its agencies without financial or contractual commitment of federal government or any of its entities

7. Provinces will have their share in Steering Committee which will be top policy making Committee so that decisions are acceptable to all provinces. Steering Committee will set up bidding procedures and documentations and Provinces Bidding Committee will complete tendering process and declare the winning party and then AEDB on behalf of Federal Government will execute contract signing and execute guarantees and warranties. Provincial Bidding Committee will have one members from AEDB.

8. Policy is investor friendly and one window operation has been promised in the policy.

9. Policy has put emphasis on Distributed Energy Generation along with On-grid systems deployments.

10. Local manufacturing has been given priority and incentives will be provided to boost the local manufacturing and AEDB will be watch dog for such incentives and will keep on eye where the incentives are required and will collaborate with EDB, FBR and Trade and Industry Chambers for such incentives.

11. In ON-grid systems deployment, policy incentives will not for Government Owned Utilities and DISCOs but for private Utilities also.

12. Policy has put emphasis on displacement of expensive thermal technologies where likelihood of the Generation cost is less as possible.

13. Tariffs will be determined in Pak Rupees and indexation formulas will be available for calculations and bidders also are allowed to suggest indexation of their own.

14. Policy includes new capacity additions, displacement and replacement projects.

Policy is the strategic document and for its translation and operationalization, Policy guideline, manuals and Leaflets should be developed to further explain the points given in the policy. 20% and 30% RE targets should be explained in Guideline with sector wise allocations ( solar, wind, hydro, Bio-energy, Tidal and geothermal) so that the performance is measurable. In background chapter of Policy, it Is missing that what has been achieved and what has not been achieved in RE policy 2006 and what are the reasons for not achieving the targets and similarly in next review of the Policy same background should be given and year of next review should be decided by the steering Committee.

AEDB should now promote this policy aggressively through media to stimulate the investor’s interests and compensate the previous delays occurred because of delay in new policy approval.

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