Key Takeaways
- Nepra Chairman Waseem Mukhtar questioned demand projections by ISMO, DISCOs and CPPA-G.
- He called for rational and transparent mechanisms to align future generation capacity with demand.
- Mukhtar highlighted transmission constraints and the need for efficient evacuation of low-cost electricity.
Chairman of the National Electric Power Regulatory Authority (Nepra), Waseem Mukhtar, has raised concerns over significant variations in demand projections by various stakeholders, emphasizing the need for a rational and transparent approach.
Mukhtar stated that the Integrated System Plan (ISP) 2025-35, approved by Nepra, warrants serious consideration of concerns raised by stakeholders regarding the risk of surplus generation capacity.
During a recent Fuel Charges Adjustment (FCA) hearing, ISMO indicated that daylight electricity demand had declined to approximately 12,000 MW, corresponding to generation from must-run plants.
Mukhtar highlighted that declining electricity sales and lower utilisation of generation assets have increased capacity charges on a per-unit basis, leading to higher costs for grid electricity.
He observed that this higher cost is suppressing demand as consumers increasingly shift towards alternative sources, creating a self-reinforcing cycle of declining grid demand and underutilised generation capacity.
Mukhtar stressed the need for concerted measures to reduce the cost of grid electricity and restore its competitiveness, encouraging consumers to remain connected to the national grid.
Transmission constraints were also highlighted by Mukhtar, noting that inadequate transmission capacity restricts the evacuation of low-cost electricity to load centres.
He called for transmission projects to be executed on a priority basis to facilitate efficient evacuation of low-cost generation, cautioning that such investments should remain appropriately aligned with prevailing and projected demand.
Mukhtar emphasized that the ISP should provide an integrated framework for generation and transmission expansion, assessing the likely impact of proposed investments and capacity additions on end-consumer tariffs.
