REPRESENTED TO:

Dr. Nazeer Abbas Zaidi

Subject : REPRESENTATERS ARE:

ENERGY MANAGEMENT AND Muhammad Shakeel 1076-2021

Muhammad Arslan 2065-2021
POLICY
Muhammad Adeel 1075-2021
HAMDARD UNUVERSTY CITY
Syed Anas 1870-2020
CAMPUS KARACHI
 TOPIC ENERGY POLICIES OF PAKISTAN

List of power policies in Pakistan

Policy 1994
Hydel Power Policy 1995
Power Policy 2002
Power Policy 1998
Policy for Development of Renewable Energy for Power Generation
National Power Policy 2013
Power Generation Policy, 2015
 Pakistan power history since 1994

Energy generation capacity in 1947 was 60Mw for 31.5 M people

WAPDA was established in 1958 and generation increased to 119mw

1994-1995 WAPDA increase production upto 2500MW

In 19970 production was 1331

1980 production increased to 3000 after installation of thermal and hydel Power plants

1990-1991 production was 67oo MW

 Power policy of Pakistan 1994
Presently the total installed capacity in the country is 10,800 MW. This capacity is
insufficient to meet the demand on a year round basis, as such at different times of the
year particularly during the period of low river flows, consumers have to be subjected to
load shedding (forced power cuts). The magnitude of this shortage is around 2,000 MW
during peak load hours. Electricity is available to only 40% of the population and per
capita consumption of electricity per annum at 300 kWh is extremely low.
The system is characterized by a high degree of suppressed demand. Conservative
projections for annual average increase in the demand are nearly 8% per annum for the
next 25 years, which means that approximately 54,000 MW of additional generation
capacity will be needed upto year 2018. Minimum annual additional capacity
requirements are of the order of 900 MW in year 1994, increasing to 1,300 MW in year
2000 and 5,000 MW in year 2018.
 CHOICE OF
SITE, FUEL

VALIDITY
TARIFF
PERIOD

Features of
the policy

SUPPLY
FINANCING AND
IMPORT

SUPPLY
AND
IMPORT
 1. CHOICE OF SITE and FUEL
The investors are free to propose the site and opt for the technology and fuel including residual furnace oil,
diesel oil, natural gas, LPG etc. for the project depending upon the availability of fuel, cooling water,
infrastructure, environmental impacts and economics of the tariff. Investors may also propose projects based
on hydro, or other renewable and/or nonconventional sources of energy such as solar, wind, geothermal etc.
2. TARIFF
The Government of Pakistan offers a Bulk Power Tariff of US Cents 6.5/kWh (to be paid in Pak Rupees) as an
average for first ten years for sale of electricity to WAPDA/KESC. A levelized tariff of US Cents 5.9/kWh (Rs
1.776/kWh) over life of the project has also been calculated as a final parameter for acceptance of the tariff.
3. FINANCING ARRANGEMENTS
The minimum requirement for equity investment is 20% of the total capital cost of the project. The Government
has established a Private Sector Energy Development Fund (PSEDF) with the assistance of the World Bank,
USAID and other multi-lateral lending agencies, which may provide upto 40% of the Capital Costs of the
project, currently at a fixed interest rate of 14% per annum with a maturity period of upto 23 years including a
grace period of upto 8 years.
4. SUPPLY AND IMPORT OF FUEL
Private investors will be responsible for arrangements of fuel for their power plants. They
are free to opt either making their own importation and transportation of fuel (oil, LPG
and LNG) for their power plants.

5.VALIDITY PERIOD OF THE BULK POWER TARIFF

The Bulk Power Tariff will be applicable for the projects executing agreements between
January 1, 1994 to December 31, 1994. The premium of 0.25 Cents/kWh will be
applicable to the projects commissioned before the end of 1997. The tariff will be revised
on annual basis and the new Bulk Power Tariff will be announced for application from
January 1 to December 31 every year
Power policy of 1995
The Government of Pakistan in March 1994 announced the Policy Framework and
Package of Incentives for private sector power development in the country. It received
a tremendous response albeit for all Thermal Plants. GOP now intends to encourage
proposals for power generation based on indigenous resources namely its hydel
resources.

The need for a separate Hydel Power Policy

In Pakistan nearly all hydro potential results from discharges into the Indus River
basin.
Discharges result primarily from precipitation and snow-melt in the northern
mountainous ranges of the country. Discharges take place in small rivulets coming
further down to the bigger tributaries of River Indus and then to Indus River itself. The
development of hydropower projects however, is characterized by remote locations
and seasonal
variations.
Outcome of 1995 policy

Desired out
come of 1995
policy

Actual outcome
1995
 POWER POLICY OF 1998
INTRODUCTION

The total power demand in the country was expected to range between 19,000 and 25,500 MW by July
2008. The existing generation units and already committed additions to capacity in both the public and
private sector are expected to meet all the increases in the future demand up to the year 2002/2003.
Additional capacity, however, would be required beyond these years. The shortfall in the capacity, taking
into account seasonal variations in hydel and requirements for adequate system reserve margins by July
2008 is expected to range between 5,000 and 8,500 MW. It is the GOP's purpose to ask offers during
1998/1999 for hydel and indigenous coal-fired projects, which already have feasibility studies, and to
initiate feasibility study work on further hydels and indigenous coal-fired projects.
 Major Departure from Previous Policy

Pakistan has established a track record of successfully attracting IPPs in two successive policy
rounds.
The 1292 MW Hub Power Project in the private sector started construction in 1993.
The 1994 Private Power Policy Framework and the 1995 Hydel Power Policy Framework were based
on a tariff announced up-front by the government and attracted private investment for over 3000 MW
of capacity.

The new Power Policy framework being proposed now is based on setting a tariff as a result of a
competitive process through which private sector entrepreneurs will be invited to offer the lowest tariff.
Competitive Tariffs will comprise an Energy Purchase price and a Capacity Purchase Price with
adequate provisions for escalation The GOP will guarantee the terms of executed agreements
 INSTITUTIONAL ARRANGEMENTS
NEPRA
NEPRA has been recently established as an autonomous, independent regulatory authority, to
promote the establishment of a competitive and efficient power sector while safeguarding the
interest of both electricity consumers and power sector investors
PPIB
One window support at the Federal level will be provided by the Private Power and
Infrastructure Board (PPIB). It will include a representative from each province and AJK
Provincial and AJK PPCs
The Provincial or AJK PPC, in consultation with PPIB and the power purchaser, will issue pre-
qualification documents, pre-qualify the bidders, issue bidding documents (prepared by PPIB in
consultation with Provincial or AJK PPC) and evaluate the bids.
Tariff Structure
Capacity and Energy components
Bidders will be asked to quote their tariff in two parts:
(1) Energy Purchase Price and (2) Capacity Purchase Price.

The Capacity Purchase Price will be expressed in Rs/kW/month; the Energy Purchase Price in
Rs/KWh.
The tariff to be paid by the Power Purchaser under the Power Purchase Agreement will be bid and
paid for energy delivered at the point of delivery as indicated in the RFP.
The Energy component will be paid based upon the amount of KWh of energy dispatched.
 Policy For Power Generation Projects Year 2002

Objectives of the Power Policy

sufficient To provide sufficient capacity for power generation at the least cost, and to avoid
capacity capacity shortfalls

To encourage and ensure exploitation of indigenous resources, which include

indigenous renewable energy resources, human resources, participation of local engineering
resources and manufacturing capabilities

To ensure that all stakeholders are looked after in the process, i.e. a win-win
stakeholders situation for all.

environment To be attuned to safeguarding the environment

Scope of the Power Policy
The scope of the Policy covers:
Private sector projects;
Public sector projects;
Public-private partnership projects; and Projects developed by the public sector and then divested

Requirement of Future Generation Capacity

Presently, the combined generation capacity available in the public and private sector is
sufficient to meet the future power demand upto the year 2004-2005. However, it would require
augmentation during subsequent years
 THE
MINIMU PROPER
M FEASIBILI
LEVELIZE TY STUDY
D TARIFF

(EPP) PROJECTS
and IN
PRIVATE
(CPP)
SECTOR
 SPECIFIC PROVISIONS FOR HYDEL PROJECTS

• The load dispatch center shall dispatch plants in accordance with the most
economical dispatch criteria (without any bias), which will be on the basis of the
lowest energy cost component, transmission line losses, system stability and
reliability, and other economic considerations. Because of their very low
Load dispatch center variable cost, hydel plants are likely to be dispatched with the highest priority.

• The Water Use Charge will be paid by the Generation Company to the Provincial /AJK
Government for use of water by the power project to generate electricity. The Water Use
Water Use Charge per kWh will be fixed at the rate of Rs.0.15/kWh. The water use charge shall be
adjustable annually for inflation as per para 66.
Charge
Policy for Development of Renewable Energy for Power Generation

SURPLUS
ELECTRICIT
Y

INVESTMENT SMALL
FROM THE SCALE
PRIVATE SALIENT POWER
SECTOR PRODUCTION
FEATURE
S OF
POLICY

ELECTRICITY INVESTORS
PURCHASE GENERATE
Strategic Policy Objectives

Economic
Benefits

Energy
Security

Environmental
Protection
Policy Goals and Development Strategy

 Increase the deployment of renewable energy technologies (RETs) in Pakistan so that RE provides a higher
targeted proportion of the national energy supply mix, i.e., a minimum of 9,700 MW by 2030.
 Provide additional power supplies to help meet increasing national demand.
 Introduce investment-friendly incentives, and facilitate renewable energy markets to attract private sector
interest in RE projects,
 Optimize impact of RE deployment in underdeveloped areas by integrating energy solutions with provision of
other social infrastructure.
 Help in broad institutional, technical, and operational capacity building relevant to the renewable energy sector.
 Facilitate the establishment of a domestic RET manufacturing base in the country that can help lower costs,
improve service, create employment, and enhance local technical skills.
 Scope of Policy
 For the purposes of this policy statement, ‘renewable energy’ (or RE) includes the following technologies:
• Small hydro of 50 MW or less capacity1
• Solar photovoltaic (PV) and thermal energy for power generation
• Wind power generation.
 Road Map for Policy Development and Implementation
 Renewable energy development in Pakistan is conceived under a phased, evolutionary approach constituting a
strategic policy implementation roadmap. The initial short term phase will involve lenient policy measures and
incentives in order to attract investment in this relatively new business area, remove existing barriers to project
implementation, and ‘hand-hold’ reasonable-sized pioneering projects through to successful commercial operation
 Medium Term Based on past international and short term domestic RE policy experience, a more comprehensive
‘medium term’ policy framework will be prepared for the systematic implementation of RE technologies and
scaling up of capacity deployment.
 Long Term RE will be fully mainstreamed and integrated within the nation’s energy planning process. RE energy
producers will be gradually exposed to full competition from alternative sources—initially from other RETs and
then gradually from conventional sources as well—based on full-price,
National Power Policy, 2013
VISION
“Pakistan will develop the most efficient and consumer centric power generation, transmission, and distribution
system that meets the needs of its population and boosts its economy in a sustainable and affordable manner.”

GOALS
 Build a power generation capacity that can meet Pakistan’s energy needs in a sustainable manner.
 Create a culture of energy conservation and responsibility.
 Ensure the generation of inexpensive and affordable electricity for domestic, commercial, and industrial use by
using indigenous resources such as coal (Thar coal) and hydel.
 Minimize pilferage and adulteration in fuel supply.
 Promote world class efficiency in power generation.
 Create a cutting edge transmission network.
 Minimize inefficiencies in the distribution system.
 Minimize financial losses across the system.
 Align the ministries involved in the energy sector and improve the governance of all related federal and
provincial departments as well as regulators
National Power Policy, 2013
This Policy is produced by the Ministry of Water and
Power of the Government of Pakistan. It has been
adopted to provide an overall direction of energy
policy in Pakistan.
It identifies current challenges as follows:

Current supply-demand gap of 4,500-5,000 MW, which

has been continuously growing in the past 5 years
Expensive electricity price (PKR12 (USD0.11) per
unit) due to dependence over thermal fuel sources
Energy inefficiency due to power loss from
transmission and distribution (23-25%)
Subsidies and circular debt due to energy inefficiencies,
energy theft and high cost of generation.
National Power Policy, 2013
The Policy sets the following targets to achieve sustainable power generation, energy conservation, affordable
energy supply, energy efficiency and good governance:

 Decrease supply-demand gap to zero by 2017.

 Decrease cost of generation from PKR12 (USD0.11) per unit to PKR10 (USD0.09) per unit by 2017.
 Decrease transmission and distribution losses from 23-25% to 16% by 2017.
 Increase electricity payment rate from 85% to 95% by 2017.
 Decrease decision making processing time at the Ministry of Water and Power and related departments

 Basic principles laid out in the Policy are efficiency, competition and sustainability. Though
detailed implementation strategies are not indicated, basic strategies to achieve overall
goal are indicated. Strategies on energy supply, energy demand, affordable power,
supply-chain, generation, transmission, distribution, financial efficiency and governance
are listed.
Power Generation Policy, 2015
The policy aims to increase the generation capacity at the least cost, utilizing the indigenous resources with
safeguarding the environment and taking all the stakeholders on board.

Objectives
 To provide sufficient power generation capacity at the leas cost.
 To encourage and ensure exploitation of indigenous resources.
 To ensure that all stakeholders are looked after in the process;
 To be attuned to safeguarding the environment

Scope
 Private sector power projects
 Public sector power projects, where required by the project sponsor.
 Public-Private Partnership (PPP) power projects.
 Power projects developed by the Public sector and subsequently divested.
Power Generation Policy, 2015
Energy access priorities:
To provide sufficient power generation capacity at the leas cost.
RE priorities:
Being indigenous, cheap and clean resource, the development of hydropower projects is amongst the top priority of the GOP.
Energy environmental priorities:
To be attuned to safeguarding the environment.
Carbon markets: 
In case any power project earns income through credits of Clean Development Mechanism (CDM), sharing of this income
between the IPP and the Power Purchaser shall be in line with the mechanism prescribed in the National CDM Policy.
Energy pricing: 
Hydropower projects: Tariff will be determined as per NEPRA's or Provincial Regulator's Mechanism for Tariff Determination.
The Tariff will be offered in two parts:
(1) Energy Purchase Price (EPP): The EPP will comprise fuel cost/water use charge, variable O&M and any variable
component determined by NEPRA.
(2) Capacity Purchase Price (CPP): The CPP will comprise Fixed O&M, Return on Equity, Debt Servicing Insurance, Cost
of Working Capital, and any fixed component determined by NEPRA.
Power Generation Policy, 2015
Import taxes and fee exemptions:
Sponsors of the power project will be allowed to import plant and equipment not manufactured locally at a
concessionary rates of 5% custom duty.
Independent power producers:
The exemption from Income Tax under Clause 132 of Part-l of the Second Schedule to the Income Tax finance,
2001 shall be available to - the new IPPs and PPP project , and for any expansion of projects by IPPs that are
already in operation.
Public Private Partnerships:
The GoP encourages establishment of power projects in public-private partnership. In line with the scope of this
Policy, the incentive concessions available to private power projects will also be available to projects
implemented under PPP mode in accordance with the applicable laws.
 The policy gives top priority and maximum exploitation of raw hydropower sites and run of river for
being indigenous, cheap and clean resources. The policy also mentions to encourage the high
efficiency, environmentally compliant, indigenous and imported fuel based power plants in order to
diversify the fuel mix and inducting base load and peak power plants. The GoP also encourages the
Public-Private Partnership (PPP) by offering incentives to the investors on establishment of power
projects under PPP in accordance with the applicable laws