KP Govt is Against Building a 600MW Solar Power Plant in Punjab

On Monday, the Khyber Pakhtunkhwa (KP) government opposed a 600 MW solar power plant at Muzaffargarh Punjab. In a public hearing held by NEPRA to carry out competitive bidding for the 600 MW Solar PV Project at Muzaffargarh, the KP government’s Pakhtunkhwa Energy Development Organization (PEDO) highlighted three main objections. The representatives of PEDO said that the federal government has not consulted with the provinces and this project is not developed under the renewable energy policy, ARE 2019, even though the policy is duly approved by the council of common interest. The project is being carried out under the special framework guidelines 2022 approved by the federal government and exemption from ARE policy 2019. The representatives of PEDO also objected that the project hasn’t been transferred to provinces after completing its life tenure of 25 years under the BOOT model. The federal government intends to keep its project after 25 years. On the other hand, the CEO of the Alternative Energy Development Board (AEDB) said that it has a representation in every province, and KPK didn’t oppose any of its decisions when they were made. Chairman NEPRA also pointed out the National Transmission & Despatch Company’s (NTDC) role in purchasing land rather than other federal bodies who have core knowledge and handling. NEPRA was apparently unable to build investors’ confidence in a public hearing after too many legal battles between the AEDB as well as the implementation of the 600 MW project and the KPK government-owned department PEDO. NEPRA held a public hearing after AEDB submitted the RFP documents in pursuance of the authority’s competitive bidding tariff regulations for approval to carry out competitive bidding for the solar power project. The board has framed 16 issues for Public Hearing including whether the impact of income tax as proposed in the RFP is to be included in the benchmark tariff or otherwise. If yes, then should that be approved as a pass-through item or be made part of the tariff? With regard to the imposition of a 15% income tax, Chairman NEPRA has shown displeasure and said that it is inconsistent compared to early policies and that Income Tax has never been imposed in any renewable project before. In addition, It will discourage the promotion of green energy initiatives by the government, he added. It is pertinent to note that the German Government GIZ funded and prepared the technical feasibility of the 600 MW solar power plant. The federal government constituted a special task force under the chairmanship of Shahid K Abbasi to execute the prime minister’s initiative on green energy on a fast-track basis. The government of Pakistan wanted to transfer its electricity system to solar energy as the duration of plants run on furnace oil will expire this year.