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HomeLatest NewsBusinessNepra okays Rs392.4bn K-Electric investment plan for grid upgradation

Nepra okays Rs392.4bn K-Electric investment plan for grid upgradation


A view of the Ok-Electrical head workplace, with photo voltaic panels on the parking space, in Karachi, on January 24, 2023. — Reuters
  • KE seeks to attain 30% share of renewable power by 2030. 
  • Funds for use for bettering transmission, distribution effectivity.
  • Rs238.22bn to be spent on upgradation of transmission system.

ISLAMABAD: The Nationwide Electrical Energy Regulatory Authority (Nepra) has accepted Ok-Electrical’s (KE) Rs392.49 billion funding plan for grid upgradation, Prime Time News24 reported on Thursday.

The funding funds, accepted after thorough scrutiny and analysis, will probably be utilised within the subsequent seven years ranging from the fiscal yr 2023-24 to 2029-30.

The approval comes after Nepra, in January earlier this yr, renewed the ability distribution and provide licences of KE for 20 years after its earlier licence expired in July 2023.

Nepra’s approval of the funding funds comes after KE, which initially sought Rs484 billion, submitted its funding plan together with a loss evaluation to the regulatory physique on January 30, 2023, in accordance with the regulatory physique’s pointers and the NEPRA Act of 1997.

It’s to be famous that the approval provisions sure phrases and circumstances permitting it the only discretion to interpret the funding plan with petitioners and stakeholders directed to strategy the authority immediately in case of want of any clarification.

Additionally, the electrical energy provider is obligated to procure cost-effective supplies and companies for mission execution and should modify its transmission license for 500 kV property and guarantee zero deadly accidents and a secure working surroundings utilizing accepted investments.

Moreover, quarterly third-party audits of KE’s funding plans have been obligatory together with quarterly progress stories on funding utilisation and bodily progress, with the latter required to be submitted to Nepra’s on-line portal.

Moreover, petitioners, who additionally bear the danger of bills incurred with out clear provision are required to distinctly doc funding and upkeep initiatives, verified by third-party audits.

Final yr in March, the electrical energy provider had claimed a rise of Rs1.9 per unit in transmission tariff and Rs1.3 per unit in distribution tariff if the sought-out funding funds of Rs484 billion had been accepted.

This meant that there would’ve been a cumulative enhance of Rs3.2 (@206 USD/PKR) per unit.

Acknowledging the complexity of the scenario, Nepra had then deferred the choice on subsidies to the provision tariff proceedings and targeted solely on the funding plan’s approval.

The publication additional stated that this will have an effect of over Rs2.5 per unit enhance for the KE customers.

Here is an in-depth take a look at the KE’s seven-year funding plan.

Funding plan

As per the funding plan, the KE is required to allocate  Rs238.22 billion in direction of upgrading its transmission system and Rs136.76 billion in direction of enhancing its energy distribution infrastructure.

In the meantime, Rs17.31 billion are for use for assist initiatives, together with IT infrastructure and Enterprise Useful resource Planning (ERP) infrastructure with Rs12.85 billion, Defence, Safety, Threat Evaluation & Compliance Rs2.655 billion, and on property regularisation and workplace renovations Rs1.8 billion and can unfold throughout the seven years.

Transmission enhancement

The enhancement within the transmission community quantities to a notable chunk of the funding plans it provisions Rs79,694 billion for grid station improvement together with Rs41.112 billion for transmission line growth.

Additionally, funding expenditure amounting to Rs17.617 billion used for enhancing the infrastructure of the five hundred kV KKI Grid Station between 2017 to 2023, has been integrated into the lately accepted plan’s first yr (FY24).

The brand new funding plan additionally provisions for Rs14.253 billion for the upkeep and safety of the grid station together with Rs4.754 billion had been directed in direction of the upkeep and safety of transmission strains to make sure their longevity and performance.

In the meantime, Rs2.684 billion will probably be used for transmission security measures, emphasising the significance of safety and stability in transmission infrastructure.

Funds amounting to Rs8.149 billion will probably be used to cut back congestion and enhance community reliability, significantly for brand spanking new transmission strains assembly N-I contingency provisions, whereas Rs18.508 billion have been allotted to rehabilitating and augmenting current strains for N-I provision. Additionally, Rs11.847 billion have been put aside for replacements and different works.

These investments embody putting in a 3rd transformer on the 500 kV NKI Grid Station and a 220 kV D/C LILO line from NKI to Baldia/Surjani, every receiving Rs5.084 billion and Rs1.320 billion respectively.

Along with this, Rs2.556 billion have been allotted for transmission loss discount. In the meantime,  interconnection initiatives with the Nationwide Grid (NTDC) and photo voltaic vegetation, like the five hundred kV KKI Interconnection and 220 kV Dhabeji Interconnection, are additionally included, with Rs1.683 billion and Rs1.643 billion allotted.

Furthermore, initiatives geared toward integrating solar energy of 350 MW allotted Rs5.18 billion; 220 kV Gharo Step-up Grid Station for Interconnection of 600 MW Photo voltaic-WPPs Rs7.16 billion and for related transmission line Rs5.66 billion. The plan additionally consists of investments in a Present Limiting Reactor and SCADA & different automation gear, with budgets totalling Rs1.148 billion and Rs8.161 billion respectively.

Enhancing distribution effectivity

Funding plan’s approval, which totalled to Rs136.764 billion on this area, provisions funds for distribution progress initiatives amounting to Rs29.461 billion with Rs43,323 billion being allotted for the minimisation of losses throughout the distribution community.

In the meantime, investments in distribution upkeep, security measures, AMR and digitisation amounted to Rs29.919 billion, Rs20.546 billion, and Rs4.614 billion, respectively.

Whereas, Rs8.901 million are for use for the implementation of good community applied sciences.

Transmission and distribution losses

The regulatory physique additionally okayed Transmission and Distribution (T&D) losses for the electrical energy provider which primarily replicate a gradual discount over the fiscal years 2023-24 to 2029-30.

Distribution loss percentages lower from 13.46% in FY2023-24 to 11.48% in FY2029-30, whereas transmission losses stay fixed at 1.30% all through the interval. The general T&D loss goal decreases from 14.58% to 12.63% over the identical interval.

It’s to be famous that any extra discount in losses past the goal for a selected yr will probably be shared between customers and KE in a ratio of 75:25, respectively.

Reacting to Nepra’s approval of its funding plan, KE has stated that it’s reviewing the regulatory physique’s resolution and can “stay engaged Nepra, and as we transfer ahead, a sustainable and cost-reflective tariff stays vital for well timed execution of the funding plan.”

The funding plan, as per the corporate, enhances its Energy Acquisition Program by means of consists of the goal of reaching a 30% share of renewable power in its technology combine by 2030.

The electrical energy provider additionally famous that it has additionally obtained regulatory approval on RFPs of 640MW renewable initiatives which is one other vital hyperlink within the mission to allow entry to inexpensive power for all.

“Over the following seven years, we need to make investments $2 billion in Transmission and Distribution to handle the town’s wants by means of focused investments and tech-based interventions. I might prefer to acknowledge the efforts of all stakeholders who’ve been part of this journey and who will proceed to work with us to modernise our infrastructure and put together us for the long run,” KE CEO Moonis Alvi stated.

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