Pakistan’s renewable energy mix is at risk of falling apart as the country’s top electricity regulator plans on charging fees for supplying electricity to WAPDA via net metering.
The National Electric Power Regulatory Authority (NEPRA) is looking to amend the Distributed Generation and Net Metering Regulations, 2015, to reduce the payment for distributor generators of net metering by nearly 30 percent.
Users supplying power to WAPDA via net metering would likely suffer a 20 percent loss, while some consumers may now be required to pay the bill.
The following are the salient features of the proposed amendments to solar energy:
- Single-stage, two-envelope bidding
- Straight-Line tariff
- 70 percent dollar indexation of tariff
- Benchmark tariff by NEPRA
- Guaranteed purchase of power
- Land and interconnection to be provided by the government
- Exemption on all import-related duties and taxes
- The existing Energy Purchase Agreement (EPA) and Implementation Agreement (IA) will be used
- COD within 12 months of EPA signing
- Term: 25 years on a BOOT basis
- 15 percent income tax
- Payment guaranteed on 60th day after invoice through Bank Debit
According to details, NEPRA has already requested public feedback on the proposed features until end-September, after which the law is expected to be finalized. The regulator’s move has discouraged both existing and prospective net metering applicants instead of incentivizing renewable energy into expensive imported fuel-based thermal generation systems.
Several dozen consumers have already complained to NEPRA to express their displeasure with the proposed amendment to its rules, which they describe as a disincentive to the use of solar energy in the country.
In principle, net metering essentially promulgates the concerned government regulating entities to pay consumers who inject electricity into the national grid. Net metering has the potential to lower electricity bills while also helping to alleviate power shortages.
Adopting capital-intensive technologies like solar energy, which has a high upfront cost but lower operating costs needs easy financing, but the above-mentioned proposed regulation ends it.