Islamabad-The Power Purchase Price (PPP) of electricity distribution companies (XWDISCOs) comprises capacity charges of Rs16.22/unit (or 71percent) alone, while Energy Purchase Price is only Rs6.73/unit (or 29percent) for the fiscal year 2023- 24.
In terms of average per unit PPP of XWDISCOs on unit purchased basis i.e. before adjustment of allowed T&D losses of XWDISCOs, capacity charges work out as Rs16.22/unit, whereas energy charges are Rs6.73/unit, totaling to Rs22.95/unit for the FY2023-24. The national average power purchase price works out as 22.42/unit, said NEPRA in its decision in the matter of setting up of Power Purchase Price (PPP) references for the FY 2023-24.
As per the NEPRA projections, the PPP for RLNG based electricity will be Rs51.42/unit, which is higher as compare to all the other fuels, which include Energy Purchase Prices of Rs23.56/unit and Rs27.86/unit will be capacity payments. The second highest cost of Rs48.56/unit is projected for furnace oil PPP which includes Energy Purchase Price of Rs23.74/unit and capacity charges of Rs24.82/unit. The PPP for hydel, local coal, gas, nuclear, imported from Iran, wind, bagasse and solar have been projected at Rs6.94/unit, Rs 23.97/unit, Rs13.02/unit, Rs18.38/unit, Rs24.73/unit, Rs14.83/unit and Rs15.04/unit, respectively.
The total Power Purchase Price of XWDISCOs for the FY2023- 24, (after excluding the share of KE), works out as Rs2,866, 159 million, which includes Rs840,462 million for fuel and variable O&M cost and Rs2,025,697 million as capacity charges including UoSC of NTDC & PMLTC and MoF of CPPA-G. The capacity charges translate into Rs6,460.81/kW/month based on projected average monthly MDI of 26,128MW. Thus, the capacity charges works out as around 71 percent of the total projected PPP of XWDISCOs, whereas energy cost is around 29 percent of the total projected PPP.
According to NEPRA , around 30 percent of total generation is expected from hydel, 17 percent from local coal, 12 percent from imported coal, 18 percent from nuclear, 10 percent from local gas, 5 percent from RLNG, 2 percent from FO and remaining around 6 percent would be contributed from renewables i.e. wind, solar and bagasse. The authority noted that generation mix has shown considerable improvement with around 63 percent generation being forecasted from indigenous resources plus around 18 percent from low fuel cost nuclear sources.
According the decision, the authority is cognisant of the fact that major component of the consumer-end tariff is the Power Purchase Price, which accounts for over 90 percent of total consumer-end tariff. Therefore, projection of PPP is of utmost importance, as all future monthly fuel charges adjustments as well as quarterly adjustments are worked out based on the projected notified PPP references. In view thereof, the authority by adopting a forward looking approach, has projected the revised PPP references keeping in view the ground realities and economic factors for the FY2023-24. For the purpose of determining the new PPP references, the authority has made projections of PPP references for the FY2023-24 by first projecting the total amount of generation that would be required and then estimating the plant wise generation along-with fuel prices and other assumptions etc, as discussed in detail in the ensuing paras.
The authority observed that as per IGCEP approved vide decision dated 01.02.2023, the total generation for long-term energy and demand forecast under normal growth scenario for the country including K-Electric for the FY2023-24 has been projected as 164,394 GWh, with peak demand of 29,054MW. It is pertinent to mention here that out of total projected energy of 164,394 GWh, KE’s own generation has been considered as 15,085 GWh in the IGCEP, thus, generation of National Grid (NG) would be 149,318 GWh.
The authority observed that Projected Generation from NG as per the IGCEP for the FY2023-24 is around 4.7 percent higher as compared to the projected generation of IGCEP for the FY2022-23. However, the actual/ provisional generation for the FY2022-23 (actual till May 2023 and provisional for June 2023) remained around 9 percent lower as compared to the projected generation for the FY2022-23. In view thereof, the authority in order to project a realistic generation for the FY2023-24, decided to incorporate the increase of around 7 percent on the actual provisional generation for the FY2022-23 i.e. 129,554 GWhs. Accordingly, the projected generation for the FY2023-24 has been worked out as 138,759 GWhs. After accounting for the allowed limit of T&T losses for both NTDC (2.63 percent) & PMLTC (4.3 percent) i.e. 4,236 GWhs, net energy available for XWDISCOs and KE would be around 134,523 GWhs. For the projected generation, plant wise and month wise generation has been obtained by running PLEXOS through CPPA-G.
It is pertinent to mention here that as per the approved IGCEP, 1,100MW export has been considered to K-Electric from NG. Thus, K-Electric would continuously be drawing 1,100MW from NG for the FY2023-24. The same in terms of GVThs, after accounting for the allowed level of NTDC and HVDC losses works out as 9,662 GWhs. Thus, out of total net projected generation of 134,523 GWhs, share of K-Electric would be 9,662 GWhs and the remaining generation of 124,860 GWhs would be for XWDISCOs, said the decision.