The Central Power Purchasing Agency (CPPA) is likely to announce policy for biomass power plants in the first week of November, said reliable sources. The sources said the decision of allowing high pressure technology for biomass-based power plants is pending with the CPPA over the last four months. The terms and conditions have already been agreed between the government and the interested parties but it has been stuck up at the final stage ie approval from the CPPA for installation of high pressure power plants.
This policy announcement will enable some 87 sugar mills to produce 8,700 megawatt electricity through biomass fuel, available in abundance within the country against the coal which the country is importing to fire coal-based power plants.
The sources said each sugar mill carries a generation capacity of 100 megawatt electricity through biomass. They pointed out that the sugar mills, having applied for high pressure technology power plants, have already spent Rs 200 to Rs 250 million each on their feasibility reports after agreeing on sharing 50 percent of equity with banks for installation of biomass-based power plants. So far, they added, some 15 sugar millers from Sindh have applied for a permission to install high pressure power plants. Chief Minister Sindh Syed Murad Ali Shah is also on record for criticizing the federal government in delaying the approvals. Similarly, some eight mills in Punjab and two in Khyber Pakhtunkhwa have also applied for permission.
The official sources pointed out that a delay in the announcement of policy was due to a report prepared by the former federal secretary for water and power Younas Dagha, which suggests that the country has sufficient capacity to produce electricity and there is no need for further production plants in the country.
However, the critics believe that the government should prefer biomass-based power plants, a raw material available within the county against coal-based power plants. So much so, they added, it is also not advisable to install LNG-based power plants, which is again being imported to meet the country's needs. Pakistan can face an emergency like situation in case the foreign reserves situation becomes further acute ahead and loses the comfort of importing coal and LNG due to the paucity of foreign exchange, they added.
It is also worth noting that the National Tariff Commission has approved Rs 12 per unit electricity cost for next 10 years to be produced through these power plants. Interestingly, the cost per unit was merely Rs 4 when Benazir Bhutto had introduced the policy back in late 80s and the then government had extended permission to sugar mills to install lower pressure power plants. Ashraf Sugar Mills, Shakarganj Sugar Mills and Fatima Sugar Mills were among the first few having applied and installed lower pressure power plants at that time.
Similarly, a good number of sugar mills had installed biomass power plants during General Pervez Musharraf era. Again, the sugar millers have planned to invest five billion rupees in this area but the investment plan is in dormant due to a delay in approval of policy from CPPA which is pursuing the report of former secretary water and power Dagha on power generation.
Copyright Business Recorder, 2017