Projected capacity payments will decline during ongoing fiscal year.

ISLAMABAD  -  The electricity consumers are likely to save Rs 605.787 billion annually, on account of capacity payments, by switching from the existing clause of ‘Take or Pay’ to ‘Take & Pay’ in the contracts with independent power producers (IPPs) and government owned power plants.

The consumers can save over Rs 6 per unit from switching over from the current ‘Take or Pay’ clause to ‘Take &Pay’ in the existing contracts with local IPPs, government owned power plants and Fauji power plants, official documents revealed.

During the current fiscal, the consumers are projected to pay Rs 1916.194 billion to the remaining IPPs, government owned power plants, plants owned by Fauji and to nuclear power plants. Earlier, the projected capacity payments were Rs2.091 trillion for the Fiscal Year 2024-25.However, following the recent government agreement with five IPPs the projected capacity payments will decline during the ongoing fiscal year.

The existing projected per unit cost of the capacity payment is Rs19.21 per unit. The gross installed capacity of local, foreign, government owned, Fauji and nuclear power plants is 32,737MW. The gross/installed capacity of local IPPs is 11,260MW, foreign 6,572MW, government 10,882MW, Fauji 492MW and nuclear 3,530MW.

The capacity payments of the local IPPs are Rs593.600 billion (Rs 29.73/unit), foreign IPPs Rs 556.404 billion (Rs 25.89/unit), nuclear power plants Rs465.704 billion(Rs 18.57/unit), government owned power plants Rs277.905 billion (Rs8.76/unit) and Fauji Rs22.581 billion (Rs14.94/unit). The government is currently pursuing the local IPPs for switching in the contract clause of Take or Pay to Take and Pay. If the government was able to pursue local IPPs, government owned power plants, and Fauji plants, the consumers will get a relief of Rs 605.787 billion annually, on account of capacity payments. The capacity payments of local IPPs will be reduced by Rs 428.934 billion (Rs 21.49/unit), government owned IPPs by Rs 162.175 billion(Rs 5.11/unit) and Fauji plants by Rs 14.678 billion (Rs 9.71/unit). The contracts for foreign IPPs and nuclear will remain the same. However, the government is working on a plan to convert the imported coal power plants on the local coal, during the next four to five years, which will bring a saving of over Rs 2 per unit.