National Electric Power Regulatory Authority

Technical Department
******
September 14, 2021
Working Paper

Subject: INTERCONNECTION FACILITIES FOR POWER GENERATION

PROJECTS

BACKGROUND:

The Authority, during RM 21-377 (COR of Nandipur) held on 25.08.2021, discussed

delays by NTDC and DISCOs in construction of interconnections required to evacuate power
from generation projects due to DISCOs’ financial inability and lack of capabilities. The
Authority noted that existing provisions for construction of interconnections including
transmission lines in NEPRA’s Regulations/Guidelines only make NTDC and DISCOs
responsible to construct such facilities and in the event where NTDC or DISCOs show their
financial as well as manpower inability to construct such facilities, NO other provision exists in
the existing applicable documents to resolve such issues.

2. In view of the above, the Authority directed Technical Department to propose

amendments in existing NEPRA’s Interconnection Regulations, 2015 and Interconnection
Guidelines, 2015 for consideration of the Authority.

PROVISIONS IN THE EXISTING NEPRA’S APPLICABLE DOCUMENTS:

3. A brief of provisions in the existing regulatory framework for construction of

interconnection facilities are summarized below:

i. NEPRA (Sale of Electric Power by Renewable Energy Companies) Guidelines,

2015: As per clause 3 (F/B) of the Guidelines, either DISCO or NTDC shall be
responsible for financing, construction, operation and maintenance of interconnection
facilities as per following criterion:

Power
Voltage Level Responsibility of Interconnection
Purchaser
132 kV or below DISCO DISCO
NTDC or DISCO
132 kV CPPA-G
* In any case, DISCO shall operate & maintain
Below 132 kV CPPA-G DISCO
220 kV or above CPPA-G NTDC
 ii. NEPRA (Interconnection for Renewable Generation Facilities) Regulations 2015:
As per amendment in Interconnection Regulations vide SRO 730(I)/2018, the Authority
allowed renewable energy project to construct, own and operate specifically 33 kV and
66 kV transmission line after seeking Special Purpose Transmission License from
NEPRA. The subject amendment is reproduced below (F/C):

‘ 3A. Exception.— (1) Notwithstanding anything contained in Regulation 3 and any

Applicable Document, the Authority may allow interconnection at 33kV or 66kV where
the Simulation Study recommends one of these as the most feasible and cost-effective
option, for interconnection:

Provided that the renewable energy project shall construct, own, maintain and operate
the aforementioned transmission line and shall obtain a Special Purpose Transmission
license.’

PROVISIONS IN OTHER APPLICABLE DOCUMENTS:

4. In compliance with the above directions of the Authority, other relevant documents have
also been reviewed which revealed the following provisions in the subject matter:

i. Power Generation Policy 2015:

One of the core object of Power Generation Policy notified vide SRO 275(I)/2015 was to
encourage and ensure exploitation of indigenous resources. As clause 9 of the Power
Generation Policy 2015 (F/D) following two options for private sector participation
regarding construction of interconnection facilities have been provided and same are
reproduced below:

a. The transmission line & interconnection with the grid from the power complex to
the grid will be built by the company and transferred to the power purchaser,
who will then own and operate the transmission line.

b. The transmission line & interconnection with the grid from the power complex to
the grid will be built by the power purchaser and the Sponsors jointly and will
then be transferred to the power purchaser, who will then own and operate the
transmission line;

ii. PPIB’s Policy Frame Work for Private Sector Transmission Line Projects, 2015:
PPIB notified Policy Framework for investors interested for investment in the field of AC
and DC Extra High Voltage (EHV) Power Transmission Lines, Substations and convertor
 stations. Whereas EHV is defined to mean 220 kV and above voltage level. The salient
features of Policy Framework are listed below (F/E):

a. The list of EHV transmission line projects to be offered to private sector for
bidding will be prepared by GOP.
b. The transmission line projects would be offered in BOOT basis for 25 years term
after which they will be transferred to NTDC.
c. International Competitive Bidding (ICB) will be carried out for processing and
award of projects.

OBSERVATIONS:

5. While reviewing the aforementioned relevant documents, the following has been
observed:

i. As per Section 18B of NEPRA Act, the Provincial Grid Companies (PGCs) are
authorized to provide transmission interconnection services to national grid company and
others wherever necessary. The Section 18B is reproduced below:

Without prejudice to the foregoing responsibilities, the provincial grid company

shall—
provide transmission and inter-connection services to the national grid company and to
others, wherever necessary, at such rates, charges and terms and conditions as the
Authority may determine;

ii. NEPRA (Interconnection for Renewable Generation Facilities) Regulations 2015 allows
renewable energy projects to construct, own, operate and maintain interconnection lines
of 33 kV and 66 kV after getting SPTL from NEPRA.

iii. Power Generation Policy 2015 also provides options for construction of interconnection
facilities either by power Generation Company or by Power Purchaser & Sponsors
jointly.

iv. PPIBs policy frame work for private sector transmission lines is applicable for
construction of transmission lines operating at 220 kV AC/DC and above voltage levels.
However, list of such lines offered to private sector shall prepared by GOP and awarded
to investor through International Competitive Bidding.

RECOMMENDATIONS:
6. In view of foregoing, it is proposed that following amendments in NEPRA
(Interconnection for Renewable Generation Facilities) Regulations, 2015 and NEPRA
Interconnection Guidelines, 2015 are proposed for construction of interconnection facilities:

i. The interconnection facilities including transmission lines may be constructed

either by power generation company or power purchaser or jointly by power
Generation Company and power purchaser on (i) mutually agreed terms and
conditions OR (ii) NEPRA’s determined rates, charges and terms & conditions in
the generation tariff for power Generation Company.

Provided that wherever the interconnection facilities and transmission lines will
be constructed by power Generation Company, the same shall be transferred to
power purchaser for operation and maintenance.

ii. The Provincial Grid Company, under Section 18B, may provide interconnection
and transmission services to the National Grid Company and others, wherever
necessary, at NEPRA’s determined rates, charges and terms & conditions.

DECISION SOLICITED:

7. The Authority is requested to allow the Technical Department to make amendments

As recommended above in the existing Interconnection Regulations and Guidelines please.

(Mohammad Ramzan) (Shahzad Anwar)

Dy. Director (Tech.) Addl. Director (Tech.)

(Irfan Yousuf)
Consultant (RE)