Central Power Purchasing Agency (CPPA)

NTDC Internship Program 2014

23rd June 2014

National Transmission and Dispatch Company (NTDC)

 Today’s Agenda
1. Background
2. CPPA - An Overview
3. A Snapshot of Major Functions
4. Up to Date Progress on Wind Power
Projects
5. Status of Solar Power Projects
6. Roadmap to the Future
7. Questions and Answers

3 CPPA
CPPA
1. Background
 Restructuring of Power Sector

5 CPPA
Major Objectives of Corporatization
1. Move towards competitive power market by
eliminating government’s monopoly
2. Manage an efficient, stable and economical power
system through transparent operations.
3. Attract foreign investment in the power generation by
providing equal opportunities to IPPs
4. Make power sector profitable for all stakeholders

6 CPPA
 Components of NTDC

Central Power
System
Purchase
Operator
National Agency (CPPA)
Transmission
and Dispatch
Company Contracts
Transmission (NTDC) Registrar &
Network Power
Operator Exchange
Administrator

7 CPPA
 Important Milestones
Expected in
Autonomous functioning of CPPA
near future

Jan. 2009 CPPA registered with Pakistan Security Exchange

Feb. 2004 Launching of CPPA as a function of NTDC

Dec. 1998 Initiation of commercial operation by NTDC

Mar. 1958 Establishment of WAPDA

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CPPA
2. CPPA An Overview
 Important Facts
1. CPPA was created by Government of Pakistan
under Restructuring of Power Sector in 1992.
2. Working as an agent of NTDC, CPPA is mandated
to buy each unit of generated electricity for DISCOs.
3. It is a seller of electrical energy to whole sale
purchasers i.e. DISCOs and Bulk Power Consumers
including KESC.
4. CPPA is an entity with Zero Asset and Zero Liability;
it manages its business through wheeling charges.

10 CPPA
 Existing Organizational Structure
Managing Director
Staff Officer
Technical
Chief Operating Officer/
General Manager

Chief Engineer Chief Engineer Director General Deputy G. M.

Settlement Procurement IT Finance

Manager Tech Manager Tech Manager IT Manager Manager HR&A Manager L&CA
(3) (2) (2) (4) (1) (1)

D.M (5) D.M (4) D.M (4) D.M (7) D.M (2)
A.M (5) A.M (4) A.M (4) A.M (13) A.M (2)

11 Central Power Purchasing Agency (CPPA) CPPA

 Vision
Pakistan has the immense potential to emerge,
sustain and be acknowledged as the best
electric power market, in South Asia,
facilitating win-win-win situation for investors,
customers and utility professionals.

12 CPPA
 Mission
We undertake to procure each
unit of electricity produced by
different sources and to sell it to
DISCOs and bulk consumers for
easing out the prevailing scarce
supply of electricity to the
consumers.

13 CPPA
 Strategic Goal
CPPA to be acknowledged as a
trusted, professional and efficient
agency owing to its internationally
accepted working procedures, non-
discriminatory and transparent
business operations, and excellent
performance standards.

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14 CPPA
Central Power Purchasing Agency
 Objectives
1. Ensure verification of invoices from generators
(IPPs, GENCOs and WAPDA Hydel plants)
2. Execute settlement functions
(Billing to DISCOs and bulk consumers including
KESC under NEPRA determined mechanism)
3. Monitor functioning of different role players
(Generators, NTDC and Purchasers);
suggest changes in the SOPs

15 CPPA
 Core Responsibility

CPPA is primarily responsible

for purchasing power from all Hydel

generators located throughout

Pakistan excluding Karachi
and selling it to all DISCOs
and bulk consumers including
KESC.

16 CPPA
CPPA
3. A Snapshot of
Major Functions
 CPPA’s Functions
1. Manage CDPs network for collection of energy data
2. Monitor functioning of meters installed at CDPs with
grid users (GENCOs, IPPs and DISCOs)
3. Undertake corrective measures for metering systems
errors
4. Establish Operating Committees, Metering Committees
and Interconnection Committees for IPPs
5. Reconcile and process energy data received from
Metering Committees (NTDC, IPPs and DISCOs)
6. Monitor compliance with respective PPA

18 CPPA
 CPPA’s Functions (Continued)
7. Negotiate and enter into Energy Purchase Agreements
with RE Power Project Sponsors
8. Monitor compliance on the EPAs by both parties
9. Setup teams to witness generators’ Commissioning
Tests and Annual Dependable Capacity Tests
10.Process and execute necessary amendments to PPAs
11.Co-ordinate with Planning Power for technical studies
12.Participate in NEPRA public hearings
13.Co-ordinate with various NTDC departments for
arrangement of interconnection facilities

19 Central Power Purchasing Agency (CPPA) CPPA

 Renewable Perspective
1. Coordinate NEPRA for:
• Issuance of Generation Licenses
• Tariff determination
2. Maintain close liaison with AEDB on:
• Capacity building on Renewable Energy technologies
• Actualizing of CER for RE Projects
3. Development of Renewable Energy (RE) projects
4. Support DISCOs, Punjab Power Development Board and
AJK Power Development Board for developing of small
hydro power projects
5. Draft and negotiate PPAs/EPAs with sponsors
6. Manage PPAs/EPAs of completed projects

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I would put my money on the sun & wind energy.
What a source of power!... Thomas Edison

CPPA
4. Up to Date Progress
on Wind Power Projects
 Status of Wind Power Projects
1. 27 IPPs with 1,898 MW of Wind Energy are on the way.

2. 19 IPPs have so far acquired Generation Licenses.

3. CPPA is currently negotiating EPA with 3 sponsors.

4. NEPRA has approved upfront tariff for 4 IPPs.

5. NEPRA has approved tariff for 12 IPPs.

6. EPA signed with 9 IPPs as of June 2014.

7. COD of 3 WPPs (150 MW) expected in 2014.

22 Central Power Purchasing Agency (CPPA) CPPA

 Existing Wind Power Projects
• A total of 105.9 MW wind power from M/s FFC and
M/s Zorlu Enerji is available to national grid.
• Three more wind power projects (FWEL-I, FWEL-II
and TGF) are expected to be commissioned within
next six months to make the total of 255.9 MW wind
power in the system.

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 NEPRA Determined Tariff for WPPs
Capacity Tariff Commercial
# IPP Name
(MW) (US$ C/kWh) Opr. Date

1 Fauji Fertilizer Company 49.5 16.109 May 2013

2 Zorlu Enerji Pakistan 56.4 13.3456 Jul 2013

3 Foundation Wind Energy – I 50.0 14.1164 Oct 2014

4 Foundation Wind Energy – II 50.0 14.1164 Jul 2014

5 Three Gorges First Wind Farm 49.5 13.9399 Oct 2014

6 Dawood Power Ltd. 50.0 11.870 -

7 Arabian Sea Wind Energy 49.5 11.920 -

8 Gul Ahmed Wind Power Ltd. 50.0 14.6098 -

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 NEPRA Determined Tariff for WPPs
Capacity Tariff Commercial
# IPP Name
(MW) (US$ C/kWh) Opr. Date
9 Metro Wind Power Ltd. 50.0 14.5236 -

10 Zaphyr Power Ltd. 50.0 15.9135 -

11 Master Wind Energy 50.0 14.5320 -

12 Sachal Energy Development 50.0 14.8618 -

13 Yunus Energy 49.5 16.2926 -

14 Saphire Wind Power Ltd. 50 13.1998 -

15 Tapal Wind Power Ltd. 50.0 16.2926 -

16 United Energ Pakistan Ltd. 100.0 13.1998 -

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EPAs Signed for Wind Power Projects
Sr. Gross Expected
No. Project Name Location
Capacity COD
1. Fauji Fertilizer Company Energy Limited Jhimpir 49.5 MW May 2013

2. Zorlu Energy Pakistan Ltd. Jhimpir 56.4 MW Jul 2013

3. Foundation Wind Energy Ltd - I Gharo 50 MW Jul. 2014

4. Foundation Wind Energy Ltd - II Gharo 50 MW Oct. 2014

5. Three Gorges First (TGF) Jhimpir 50 MW Oct. 2014

6. Sapphire Wind Power Co. (Pvt.) Limited * Jhimpir 50 MW Dec. 2015

7. Metro Power Co. (Pvt.) Limited * Jhimpir 50 MW Dec. 2015

8. Sachal Energy Development (Pvt.) Ltd. * Jhimpir 50 MW Dec. 2015

9. Yunus Energy Limited * Jhimpir 50 MW Dec. 2015

Total Capacity 455.9 MW

* Subject to Financial Close in June-2014

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 Summarized Status of All WPPS
Inter-
Capacity Individual Expected
Sponsor Name Status of WPP Connection
Addition Capacity COD
availability
Fauji Fertilizer Company 50 Commissioned Commissioned Available

Zorlu Enerji 56 Commissioned Commissioned Available

256 MW
Found. Wind Energy II 50 Construction in Progress Jul-14 Jun-14

Found. Wind Energy I 50 Construction in Progress Oct-14 Jun-14

Three Gorges First 50 Construction in Progress Oct-14 Apr-14

100 MW
Sapphire Wind Power 50 EPA Signed Dec-15 Jun-15

Sachal 50 EPA Signed Dec-15 Jun-15

Metro 50 EPA Signed Dec-15 Jun-15

UEPL 100 EPA negotiation in progress Dec-15 Jun-15

330 MW
Younas 50 EPA Finalized Dec-15 Jun-15

Devan 50 Upfront Tariff to be Determined Dec-15 Jun-15

Tapal 30 EPA negotiation in progress Dec-15 Jun-15

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 Summarized Status of All WPPS
Inter-
Capacity Individual Expected
Sponsor Name Status of WPP Connection
Addition Capacity COD
Availability
Dawood 50 Negotiating EPA with CPPA/NTDC Jul-16 Dec-15

Hawa 50 CPPA consented for Upfront Tariff Jul-16 Dec-15

Tenaga 50 CPPA consented for Upfront Tariff Jul-16 Dec-15

Fin Energi 50 CPPA consented for Upfront Tariff Jul-16 Dec-15

Gul Ahmad 50 CPPA consented for Upfront Tariff Jul-16 Dec-15

1120 MW Master 50 CPPA consented for Upfront Tariff Jul-16 Dec-15

China Sunec 50 LOI Issued Jul-16 Dec-15

Wind Eagle -I 50 CPPA consented for Upfront Tariff Jul-16 Dec-15

Wind Eagle -II 50 CPPA consented for Upfront Tariff Jul-16 Dec-15

Hartford 50 CPPA consented for Upfront Tariff Jul-16 Dec-15

NBT 500 LOI has been Expired by AEDB `

Total Anticipated Capacity = 1,756 MW

28 CPPA
 Grid Reinforcements for WPPs
• 220/132 kV Jhimir Substation of
750 MVA
• 220/132 kV Gharo Substation of
500 MVA
• Addition of 450 MVA Transformer
at Jamshoro 500/220 kV
• 155 km of 220 kV Transmission
Lines
• 192 km of 132 kV Transmission
Lines
Total Cost Estimate = Rs. 14,542 M

29 CPPA
 CPPA
5. Status of Solar Power
Projects in Pakistan
 Phase 1: Quaid-e-Azam Solar Park
1000 MW Power Evacuation Plan from Quaid-e-Azam Solar Park

• 100 MW Power Evacuation at 132 kV

• Interconnection Scope:
4 Km in-out of 132kV T/line from BWP – Lal Suhanra
T/line
• Estimated Cost: Rs. 54 million
• Phase I will be executed by MEPCO

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 Phase 2: Quaid-e-Azam Solar Park
1000 MW Power Evacuation Plan from Quaid-e-Azam Solar Park

• 300 MW Power Evacuation at 132 kV

• Interconnection Scope:
i. 132 kV T/Line, approx. 8 km, for connecting with
existing BWP Cantt. – Lal Suhanra T/Line.
ii. 132 kV T/Line, approx. 4 km, for connecting with
existing BWP – Lal Suhanra T/Line.
iii. 132 kV T/Line , approx. 40 km, from Bahawalpur 220
kV G/S to Lodharan.
• Estimated Cost: Rs. 702 million
• Phase I & Phase II will be executed by MEPCO

32 CPPA
 Phase 3: Quaid-e-Azam Solar Park
1000 MW Power Evacuation Plan from Quaid-e-Azam Solar Park

• 600 MW Power Evacuation at 220 kV

• Interconnection Scope:
i. A new 220/132 kV G/S at Quaid-e-Azam Solar Park
near Lal-Suhanra.
ii. 220 kV T/Line, approx. 40 km, from Quaid-e-Azam Solar
Park to Bahawalpur.
iii. Three 132 kV T/Lines, each approx. 8 km, for
connecting individual solar projects to 220 kV G/S
within Quaid-e-Azam Solar Park
• Estimated Cost: Rs. 3,303 million
• Phase-III will be executed by NTDC
33 CPPA
Other Solar Power Projects (310.75 MW)
#. Sponsor Location Capacity DISCO Status

1 DACC Power Generation Co. Cholistan 50.0 MEPCO Interconnection Study

2 Welt Konnect Cholistan 50.0 MEPCO Interconnection Study

3 Quaid-e-Azam Solar PP Bahwalpur 100.0 MEPCO Applied for Gen. Licence

4 3W Power SA + AEG PPs Cholistan 50.0 MEPCO Under Process at PPDB

5 Buksh Energy (Pvt) Ltd. Lodhran 10.0 MEPCO Tariff Granted by NEPRA

6 Safe Solar Power (Pvt) Ltd. Punjab 10.0 MEPCO Tariff Granted by NEPRA

7 Access Solar Power (Pvt) Ltd. Pind D.Khan 10.0 IESCO Tariff Granted by NEPRA

8 Roshan Power (Pvt) Ltd. Kasur 10.0 LESCO Under Process at PPDB

9 Techaccess FZ LLC Pind D.Khan 10.0 IESCO Under Process at PPDB

10 Sanjwal Solar Power (Pvt) Ltd Sanwajwal 5.04 IESCO Tariff Granted by NEPRA

11 Engro Powergen Qadirpur Ltd. Deharki 0.36 SEPCO Applied for Gen. Licence

12 Pakistan Engineering Council Islamabad 0.356 IESCO Applied for Gen. Licence

13 Wah Industries Ltd. Sanjhwal 5.0 IESCO L.O.I issued by AEDB

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CPPA
4. Some of Our
Business Processes
 Flow of Revenue Cycle

Verify bills from generators & compute payments

1
Evaluate price chargeable to DISCOs & bulk consumers
2
Bill to DISCOs, KESC and bulk consumers
3
Collection of funds against bills issued by CPPA
4
Monthly disbursal of funds to the generators
5

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 IPPs’ Invoices Verification Process
Verification of Monthly Energy
Purchase Price (EPP) Invoices

Verification of Monthly Capacity

Purchase Price (CPP) Invoices

Verification of Monthly Supplementary

Invoices (Markup, WPPF, WWF, etc.)

Preparation of Liquidated Damage

Invoices

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 GENCOs & WAPDA Hydel Invoicing

Verification of Energy Purchase Price Invoices (EPP)

Verification of Capacity Purchase Price Invoices (CPP)

Supplementary Invoices claimed by the generators

38 Central Power Purchasing Agency (CPPA) CPPA

 Invoicing Process for DISCOs & IPPs
Calculation of Energy Transfer Rate
(ETR) & Capacity Transfer Price (CTR)

Sale of electricity invoices to DISCOs

and KESC

Billing to IPPs against energy purchased

through NTDC network

Monitoring for recovery of amount billed

to DISCOs and KESC

39 Central Power Purchasing Agency (CPPA) CPPA

 Reconciliation & Disputes Resolution

Reconciliation of Energy with Generators

Reconciliation of Energy with DISCOs

Reconciliation of Financial Issues with IPPs

Resolve legal issues like arbitration proceedings

under Article XV of the PPA (Dispute Procedure)

Resolve disputes/issues with IPPs under PPA

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 Resource Potential of Wind Power
• The Pakistan Wind Map was developed by National
Renewable Energy Laboratory (NREL), USA in
collaboration with USAID.

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 Resource Potential of Wind Power

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Target for Wind Power Development
• Keeping in view the huge potential and the
anticipated future energy needs, the GOP has
set a target of at least 5% of the total national
power generation capacity to be generated
through wind power.
• Study is being conducted by NTDC to ascertain
the share of renewable energy which can be
reliably connected to national grid.

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CPPA
Incentives for Wind Power Development
GoP offers following incentives for setting up Wind Power Projects:
• Wind Risk (risk of variability of wind speed)
• Guaranteed Electricity Purchase
• Grid provision is the responsibility of the purchaser
• Protection against political risk
• Attractive Tariff (Cost plus 17% ROE), indexed to inflation and
exchange rate variation (Rupee / Dollar)
• Euro / Dollar Parity allowed
• Carbon Credits available
• No Import Duties on Equipment
• Repatriation of Equity along with dividends freely allowed
• Permission to issue corporate registered bonds

44 CPPA
 CPPA
6. Roadmap to the Future
 Plan Should be Realistic

Most people are more comfortable with old

problems than with new solutions.
Anonymous

46 CPPA
 Join the Less Travelled Path

Not
EXCUSES My
Job

IDEAS SHARING ACTIONS

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 Importance of Contemplated Roles

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 Changing the Lens & Perceptions

Think differently, Think out of the box

49 CPPA
 CPPA Performance Expectations
• Maintain absolute clarity of purpose
• Own your actions and then expect from people to do so
• Respect others while maintaining self respect
• Have complete faith in Allah Almighty with NO doubt
• Be brave to own your mistakes and flop ideas
• Reassess before delivering your ideas and thoughts
• Manage your resources well – first of all humans
• Acknowledge others’ performance specially the juniors
• Negate negative ideas, approaches and decisions
• Exhibit highest level of commitment with your goal
• Aim to stay at top and keep excelling – nothing less

50 CPPA
 The Way Forward
1. Manage effective communication channel
2. Adopt true Corporatized Culture (Vision, Mission,
Goals, Objectives, Strategic Plan, Action Plan)
3. Capitalize on the outcome of each intervention
4. Proactively prepare for the change
5. Ensure close interaction among team members
6. Need to erase old practices and understandings.
7. All plans to be ambitious yet realistic.
8. No less than cutting edge performance
9. Value and strive for team efforts

51 CPPA
 Objectives As Autonomous Entity
1. Maintain highest level of transparency
2. Ensure effective accountability
3. Exhibit non-discrimination among generators &
customers
4. Achieve highest efficiency through corporate culture
5. Build industry standard capacity to manage business
6. Prepare and execute business plan
7. Mitigate cash shortfall risks
8. Monitor functioning of different role players
9. Develop formalized business standards & procedures

52 CPPA
 CPPA
Your questions would certainly
add value to
our approach, operations and
performance
 Your Questions Would Add Value to
Our Approach, Tactics & Contribution.

Always Seek Knowledge (ASK)

 Phase 1 Interconnection Scheme

Cost Estimate
Phase-I Cost: Rs.54
milliont

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 Phase 2 Interconnection Scheme

Cost Estimate
Phase-II Cost: Rs.702
milliont

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 Phase 3 Interconnection Scheme

Cost Estimate
Phase-III Cost: Rs.3,303
million

57 CPPA