President Asif Ali Zardari on Friday directed the Ministries of Petroleum and Water and Power to take all steps for early implementation on all projects and plans in the pipeline to meet the rising energy requirements of the country. President presided over a meeting that took stock of the oil and gas situation in the country. The meeting was attended by the Ministers for Finance, Water and Power, Petroleum and other senior officials.
Unsatisfied
An official source said the President was not satisfied with the performance of the government in addressing the energy issues and was personally taking briefings and issuing directives to overcome the energy shortages. President was taking keen interest since the general elections are fast approaching and the political parties in the opposition aim to highlight the failure of the government in resolving the energy crisis as a major election campaign card. The source said the President was quite perturbed that despite ample investment opportunities in the power sector, no investment has been made during the last three and half years. He was annoyed that despite the keen interest of foreign investors in the wind power sector, no project has been implemented in that regard.
Foreign investor reservations
Pressure from the Presidency forced the government to seek feed in tariff for wind power projects, as the foreign investors had reservations over the reverse calculation methodology by NEPRA for determining wind tariff as impractical and expensive. President had also directed the Ministry of Water and Power to look into the bottlenecks that were delaying investment in the hydel power projects. The ministry was also directed to expedite implementation on the IPPs in the pipeline. Petroleum Minister Dr Asim Hussain briefed the meeting on the key issues facing the oil and gas sector. He explained the proposed short term measures during the current fiscal year and medium term for the next fiscal year along with long term efforts for enhancing oil and gas production in the country.
Enhancing oil and gas production
President earlier directed the Petroleum Ministry for taking measures for enhancing oil and gas production besides reactivation of abandoned and depleted gas fields. The Petroleum Minister briefed the committee on efforts to recover gas from abandoned and depleted wells. He also briefed the meeting on the progress made on President’s earlier directive for reactivation of abandoned gas fields in the country to improve much needed energy supplies.
Tapping renewable energy potential
In another development, the government has sought approval of the Council of Common Interests (CCI) for the new alternative and renewable energy policy 2011 to fast track investment of the private sector investment in the renewable energy projects to overcome the energy shortfall in the country. Minister for Water and Power Syed Naveed Qamar said this while presiding the board meeting of the Alternative Energy Development Board (AEDB). He said the development of alternative energy sector will share the burden of conventional sources of energy by strengthening and improving the power supply position and fueling rapid and environmentally sustainable economic growth particularly in rural areas.
Fast tracking wind energy projects
Keeping in view the success of feed in tariff globally, the government also decided to offer feed in tariff for wind projects. The feed in tariff recently determined by the National Electric Power Regulatory Authority (NEPRA) will be announced soon after completing formal procedures that will also facilitate fast tracking of the wind energy projects. The feed in tariff is initially for the first 1500 MW that will achieve financial closing by December 2012. The investors were demanding feed in tariff as it fast tracks development of renewable energy projects. NEPRA has approved Rs12.61 per kWh feed in tariff for foreign financed wind power projects while the locally financed projects have been offered Rs17.28 per kWh feed in tariff which will complete their financial close before December 2012. The Ministry of Water and Power will finally notify the tariff for implementation after approval of the CCI. However, the government has decided not to offer wind risk guarantee to investors as the required data will take 4 years for completion.
AEDB failure
In the 2004 Medium Term Development Plan, the government envisaged generating 900 MW of electricity from renewable energy by end of June 2010. The Alternate Energy Development Board (AEDB) was given the responsibility but the institution failed to add any single megawatt on the national gird. The interest shown by Turkish, Chinese, Norwegian investors forced the government to opt for the feed in tariff. The coastal areas of Balochistan and Sindh are termed ideal for wind power projects. The feed in tariff will also help attract investment for manufacturing wind turbines in Pakistan. The Minister also directed AEDB to expedite the process of pending issues of wind power projects and give a green signal to sponsors so that they move forward for setting up their projects. He also asked to finalise the standard of energy purchase agreement for wind power projects. The meeting also approved some administrative matters of the AEDB.