Latest news with #ISMO
Business Recorder
7 days ago
- Business
- Business Recorder
Denmark to launch 3-year SSC programme with Pak power sector
ISLAMABAD: Denmark is set to launch a new three-year Strategic Sector Cooperation (SSC) programme with Pakistan's power sector, aimed at strengthening the technical capacity of key national energy institutions. According to Danish Ambassador to Pakistan, Jakob Linulf, the initiative—implemented by the Danish Energy Agency (DEA)—will commence on January 1, 2026. The program is designed to support Pakistan's transition to a more efficient and sustainable energy system. The SSC program will focus on three key areas - long-term sector modelling and planning; integration of variable renewable energy; and energy efficiency in the industrial sector Energy sector: Minister, Danish envoy agree to enhance bilateral cooperation To formally initiate the partnership, a high-level Danish delegation led by Carl-Christian Munk-Nielsen, Director of Global Cooperation at the DEA, will visit Pakistan from August 18 to 22, 2025. The purpose of the visit is to engage with relevant stakeholders, introduce the SSC program, and better understand the structure, goals, and mandates of Pakistan's energy authorities—especially in light of recent institutional restructuring. These discussions will help shape future training sessions and workshops under the cooperation program. Referring to the unbundling of the National Transmission and Despatch Company (NTDC) into the National Grid Company (NGC), Independent System and Market Operator (ISMO), and Energy Infrastructure Development & Management Company (EIDMC), Ambassador Linulf noted that all three entities are seen as key partners in the new SSC initiative. In this regard, the Danish Embassy has requested that the relevant Pakistani authorities facilitate meetings between the visiting delegation and the management of NGC, ISMO, and EIDMC on August 18, 2025. The Danish Ambassador emphasized that these interactions will provide an opportunity to present the objectives of the SSC program and gather critical feedback to guide future collaboration. Copyright Business Recorder, 2025
Business Recorder
14-07-2025
- Business
- Business Recorder
KP asks centre to retain its two HPPs on IGCEP 2025-35
PESHAWAR: The KP government has asked the federal government to retain its two public sector energy projects i.e. Madyan Hydropower Project and Gabral Kalam HPP on Indicative Generation Capacity Expansion Plan (IGCEP 2025-35) prepared by the ISMO (System Operator). For this purpose, the Special Assistant to KP Government on Energy and Power Department, Tariq Saddozai has written a formal letter to the Federal Minister for Energy and Power, Sardar Owais Ahmad Leghari. The content of the letter said that the provincial government has expressed surprise over the unilateral altering of the criteria for 'committed projects' in IGCEP 2025-35 that has resulted in the exclusion of the KP government's projects. It said that as per the National Energy (NE) Plan, all projects declared committed under approved IGCEP 2021 shall be included as committed projects in subsequent iterations of the IGCEP. Therefore, the exclusion of the said projects is clearly in contravention of the NE Plan approved by the federal government pursuant to the NEPRA Act, 1997. It said that the revised criteria introduced by System Operator is contrary to the earlier prescribed approved criteria. The system operator cannot revise the criteria for committed projects during the currency of the current NE Plan. Furthermore, the retrospective application of such revised criteria is also contrary to the law as it amounts to changing the goal post during the game. Once a project is recognized and declared as committed project, it cannot be revaluated afresh through subsequent iterations and the revised criteria shall be applicable to the new projects that were not earlier present, not iterated projects or where the committed projects have been abandoned. Even the delays in the committed projects do not justify their exclusion rather the timelines for the commercial operations date are to be adjusted. It has further stated that the KP government projects have already demonstrated considerable physical and financial progress after attaining the status of 'Committed Projects' pursuant to the earlier IGCEPs. In consequence thereof, the KP government had also secured Generation Licenses from NEPRA, creating a vested right. Moreover, the provincial government also understand that once the project are declared committed, the criteria of least-cost, cannot be applied retrospectively to their further processing in their development cycle. Notwithstanding, the KP projects despite achievement of the status of 'Committed Projects' have been subjected to least-costs evaluation under the draft IGCEP 2025-35, which is contrary to the constitutional, statutory and regulatory framework. It has also highlighted that public sector projects of the federal government, previously declared as committed, namely Mohmand Dam, Dasu, Tarbela Extension-5 etc, continue to remain as committed in the draft IGCEP 2025-35. In stark contrast, the government of Khyber Pakhtunkhwa's 'Committed Projects' namely Madyan and Gabral-Kalam HPPs, have been excluded, which demonstrates discriminatory approach of the system operator which should accord equal treatment to the federal and provincial power projects developed through the public funds. On one hand the KP government projects have been approved by the federal government through the ECNEC of the Planning Commission and on the other hand, the system operator which is owned and controlled by the federal government is not recognizing the approval granted by the federal government. It further stated that the provincial government has secured concessional financing from the multilateral lender, that is, the World Bank through the Economic Affairs Division of the federal government, through multilateral lending framework, which is signed and guaranteed by the federal government in respect of loans extended by the World Bank to the province. The exclusion of KP projects would undermine this window of multilateral lending and would expose the government of Pakistan to the cancellation of loan/ lending and recovery of the financing charges, winding up costs, breakage costs, commitment fees etc. The exclusion will further prevent future lending to development projects in general and power projects in particular in KP beside giving highly negative signal to the current and potential investors in the province. Thus, the system operator being an entity of the federal government is failing to recognize the financing arrangement, for the development of the power projects, which financing has been incepted, financing and closed with the approval of the federal government. In light of the mentioned facts, grounds and circumstances, the KP government has requested the federal government to retain the projects of Madyan HPP and Gabral Kalam HPP as 'Committed Projects' in the IGCEP 2025-35; not allowing the System Operator to alter, modify, deviate or revise the criteria for inclusion of projects in the IGCEP in contravention of NE Plan, those approved unanimously by the Council of Common Interests vide its decision No. 2(8)/2021 CCI (48) dated September 13, 2021. Copyright Business Recorder, 2025
Business Recorder
18-06-2025
- Business
- Business Recorder
Short on commitment with SNGPL: Power sector uses 28pc less RLNG
ISLAMABAD: Pakistan's power sector consumed 28 percent less Regasified Liquefied Natural Gas (RLNG) in June 2025 compared to its committed volumes with Sui Northern Gas Pipelines Limited (SNGPL), creating operational and financial challenges for the gas supplier, sources told Business Recorder. According to sources, SNGPL has been persistently flagging the issue to both the Directorate General of Gas (Petroleum Division) and the Power Division. In a recent communication, SNGPL reiterated that the power sector is not consuming RLNG as per the committed demand of 550 million cubic feet per day (MMCFD) for June 2025. Actual average consumption has been around 396 MMCFD, leading to excess gas accumulation in the system. Power sector owes Rs165.256bn to SNGPL SNGPL warned that if RLNG offtake is not increased immediately to meet the agreed demand, high system pressures could disrupt re-gasification operations at both LNG terminals. This could delay cargo discharge and result in financial losses due to demurrage charges and take-or-pay obligations. As an alternative, the company may be forced to curtail supplies from local gas fields. SNGPL requested the Directorate General (Gas), Petroleum Division, to intervene urgently and engage the Power Division for immediate RLNG offtake as per commitments, along with recoupment of unutilized volumes. This is necessary to ensure smooth system operations. The National Power Control Centre (NPCC), now operating as the Independent System and Market Operator (ISMO), is responsible for dispatching power plants based on the Economic Merit Order (EMO). However, in several cases, ISMO has deviated from the EMO due to unforeseen or scheduled outages of various plants. ISMO maintains that partial loading of plants is in line with provisions of their respective Power Purchase Agreements (PPAs), and that operational decisions are made accordingly. Nevertheless, the NPCC's General Manager often faces criticism during NEPRA public hearings for bypassing cheaper, locally fueled power plants in favor of more expensive RLNG-fired units, especially to meet peak demand in Central Punjab. During these hearings, stakeholders proposed that ISMO publish real-time data on generation mix and associated fuel costs to enhance transparency and support informed decision-making. As per the Economic Coordination Committee (ECC) decision of March 19, 2025, the minimum take-or-pay obligation was revised to 50 percent starting January 1, 2025. This adjustment will be applied from May 2025 onwards, as agreed during a meeting of the Power Task Force. In his additional note on Distribution Companies' (Discos) Fuel Cost Adjustment (FCA) determination for April 2025, Member (Technical) Rafique Ahmad Shaikh highlighted that forced outages at cost-effective plants—such as Uch-I and EngroPowerGenQadirpur—during peak demand periods led to underutilization of economical, indigenous resources. He noted that this has increased reliance on expensive power generation and driven up overall fuel costs. While legally permissible, repeated forced outages negatively affect FCA calculations. To improve accountability, he recommended that the System Operator present a detailed financial impact assessment of these outages during FCA meetings, including a three-year history of forced and scheduled outages for each affected plant to evaluate operational performance. Shaikh also pointed out that Partial Load Adjustment Charges (PLAC) amounted to Rs. 2.92 billion ($10.39 million) in April 2025 alone, bringing the cumulative total for FY 2024–25 to Rs. 32.8 billion ($116.73 million). This rising cost is concerning and requires a detailed review. He urged the development of a mechanism to reduce PLAC through better demand-side management and system optimization. In related developments, Pakistan LNG Limited (PLL) has diverted six additional LNG cargoes—originally scheduled for delivery from Italian supplier ENI in July through December—to the international spot market. These diversions come under a 15-year agreement stipulating one cargo per month. Pakistan has also deferred the delivery of five LNG cargoes from Qatar — originally scheduled for 2025 —to 2026, citing reduced domestic demand. Copyright Business Recorder, 2025
Business Recorder
23-05-2025
- Business
- Business Recorder
Awais shares power sector reforms, plans with World Bank
ISLAMABAD: Federal Minister for Power, Sardar Awais Ahmad Khan Leghari on Thursday shared power sector reforms and future plans with delegation led by Anna Bjerde, Managing Director Operations of the World Bank. During the meeting, the minister shared that Pakistan is set to introduce a competitive electricity market in the near future. All preparatory work for this transition is being completed. He noted that an Independent System and Market Operator (ISMO) has been established to manage the market operations, and experienced professionals are being appointed to ensure its effective functioning. The government will no longer act as the sole purchaser of electricity. Highlighting key financial reforms in the power sector, the minister informed the delegation that there has been a significant improvement in revenue recovery. He emphasised the importance of ensuring that electricity subsidies are directed only to those who truly need them and requested the World Bank's support in implementing targeted subsidy mechanisms. Bjerde endorsed the minister's approach, affirming that the World Bank fully supports the idea of better targeted subsidies and is committed to assisting Pakistan's power sector in this regard. The minister also pointed out that Pakistan currently has a surplus of approximately 7,000 megawatts of electricity. He proposed that providing this excess power to industries, even at marginal rates would make it the cheapest industrial electricity in the region. He stressed the need for support from the World Bank and other development partners to capitalise on this opportunity, which could significantly boost industrial production in the country. Bjerde agreed with the proposal, noting that utilising surplus electricity at marginal cost is far more beneficial than allowing it to go unused. The minister mentioned that during the winter season, electricity was already supplied at these lower rates without any subsidy, and the goal now is to extend this model throughout the year. He added that the power sector is moving towards the implementation of digital and smart systems from the feeder to the transformer level, and emphasised the crucial role of World Bank support in this digital transformation. The delegation was also briefed on the ongoing privatisation efforts in the power sector. The minister shared that the privatisation process for three electricity distribution companies is currently underway and is expected to be concluded by the end of this year. He also discussed broader restructuring efforts within the sector, highlighting that procurement and tendering systems have been upgraded to meet international standards, enhancing transparency and merit. Additional measures have been introduced to expedite the completion of ongoing projects. Copyright Business Recorder, 2025
