Presentation on Status / Issues Impeding Fast Track ... · • At present, 86 Sugar Mills are operation in the country with a combined crushing capacity of 50 million tons of sugar

Presenter:

Sulman Ishaque Malik

In-Charge (Bioenergy)

Presentation on Status / Issues Impeding Fast Track Development of High Pressure Co-Generation Projects by Sugar Mills Under the Provisions of

Framework for Power Co-Generation 2013 (Bagasse/Biomass)

Salient Features of Policy Framework 2013

Issuance of Letter of Intent (LOI) on the basis of standard proposal with no requirement for a feasibility or firm costs in case of upfront tariff.

The Power Producer has been provided with the choice to establish the power project as part of existing sugar mill or as a separate entity.

Upfront tariff for bagasse / biomass based cogeneration projects has been announce by NEPRA which is based on per unit energy delivered to the grid.

Power Producers has been given the option to offer energy to the respective DISCOs at 11 kV or 132 kV, or to the CPPA at 132 kV, provided that the cost of interconnection, grid station upgrades, etc. for power evacuation shall be incurred by the respective DISCOs.

Mandatory Power Purchaser and evacuation of all energy offered.

Compensation for all un-evacuated energy (except Force Majeure events) through the concerned DISCO.

Financial and fiscal incentives available to renewable energy projects as per clause 8.6 of Renewable Energy Policy of 2006 shall be applicable to all the power projects implemented in terms hereof and shall be notified under relevant laws accordingly. For this purpose, power generation units of sugar mills shall be considered a separate entity. Clause 8.6.1(ii) of the Renewable Energy Policy 20 06 shall be applicable only to units of electricity sold to the grid.

Applicability of framework to all bagasse / biomass based projects commissioned after January 2013.

Wheeling option provided to Power Producers under provisions of Renewable Energy Policy 2006.

High Pressure Co-Generation Power Sector –Quick Overview

• At present, 86 Sugar Mills are operation in the country with a combined crushing capacity of 50 million tons of sugar cane per year, which yielded over 15 million tons of bagasse assuming 32% fiber on cane.

• The amount of bagasse produced by sugar mills has the potential to generate between 1,500 to 2,000 MW depending on plant parameters.

• Almost every mill has its own power plant (traditionally low pressure) which are now being replaced with high pressure Co Generation power plants.

• These power plants provide a reasonable spill over during winter season.

• The “Framework for Power Co-Generation (Bagasse/Biomass) was announced in mid of 2013 and just in 03 years, __ sugar mills are adding a cumulative capacity of ____ MW in to the national grid during crushing season and ___Mw in off season.

• Around ___MW of electricity is expected to be added in to the National Grid by ____

Letter of Intent Holders (2013)

S.No Project Company Gross Capacity

01 M/s JDW Sugar Mills Ltd (Unit-II) at Rahim Yar Khan, Punjab

26.35 MW

02 M/s JDW Sugar Mills Ltd (Unit-III) at Ghotiki 26.35 MW

03 M/s RYK Mill Limited, Rahim Yar Khan, Punjab 30 MW

04 M/s Hamza Sugar Mills Ltd, Rahim Yar Khan, Punjab 15 MW

Total: 97.70 MW


S. No

Project Company Gross Capacity

01 M/s Chiniot Power Limited, Chiniot, Punjab 62.40 MW

02 M/s Layyah Sugar Mills ltd, District Layyah, Punjab 41 MW

03 M/s Alliance Sugar Mills Ltd, Ubauro, District Ghotki, Sindh

30 MW

04 M/s Safina Sugar Mills Ltd, Lalian, District Chiniot, Punjab

20 MW

05 M/s M/s Almoiz Industries Ltd, District Mianwali, Punjab

36 MW

06 M/s Etihad Power Limited, District Rahim Yar Khan, Punjab

67 MW

07 M/s Shahtaj Sugar Mills Ltd at, Mandi Bahauddin, Punjab

32 MW

Total: 288.40 MW


Status

1 M/s JDW Sugar Mills Ltd (Unit-II) at Rahim Yar Khan, Punjab

26.35 MW Operational (COD June 12, 2014)

2 M/s JDW Sugar Mills Ltd (Unit-III) at Ghotiki

26.35 MW Operational

(COS October 03, 2014)

Total Capacity: 52.70 MW

Commercial Operations (2014)


S.

No Name of Project Company Gross Capacity

01 M/s Chanar Energy Limited, Faisalabad, Punjab 22 MW

02 M/s RYK Energy Limited, Rahim Yar Khan, Punjab 36 MW

Total 58 MW

Commercial Operations (2015)


Status

01 M/s Chiniot Power Limited, Chiniot, Punjab

62.40 MW Operational (COD-November28, 2015)

02 M/s RYK Mills Limited, Rahim Yar Khan, Punjab

30 MW Operational (COD- March 24, 2015 )

Total Capacity: 92.40 MW



01 M/s Sheikhoo Power Ltd, District Muzafargarh, Punjab. 30 MW

02 M/s Indus Energy Limited, Janpur, District Rajanpur, Punjab.

30 MW

03 M/s M/s Hamza Sugar Mills Ltd (Phase-II), Rahim Yar Khan, Punjab.

30 MW

Total 90 MW

Proposals Accepted for Issuance of LoI (2016)


01 M/s Ansari Powergen Company (Pvt.) Limited., Badin,

Sindh.

30 MW

02 M/s Bandhi Powergen Company (Pvt.) Limited,

Nawabshah, Sindh.

30 MW

03 M/s TAY Powergen Company (Pvt.) Limited, Tando

Allahyar, Sindh.

30 MW

05 M/s Shakargarj Mills Limited, Jhang, Punjab. 40 MW

06 M/s Shakarganj Mills Limited, Jhang, Punjab. 60 MW

07 M/s Agroserve Energy (Pvt.) Ltd, D.I Khan, Khyber

Pakhton Khwa.

49 MW

08 M/s Hunza Power (Pvt.) Ltd, Jhang, Punjab. 49.80 MW

Total capacity: 288 MW

New Proposals Under Review (2016)

S.No Name of Project Company Gross Capacity

01 M/s Mirpurkhas Energy Limited, District Mirpurkhas,

Sindh.

26.50 MW

02 M/s Mehran Energy Limited, District Mirpurkhas, Sindh. 26.50 MW

03 M/s Faran Energy Limited, District Tando Muhammad

Khan, Sindh.

26.50 MW

05 M/s Ittifaq Power Private Limited, District Bahawalpur,

Punjab.

31.20 MW

06 M/s Kashmir Power Private Limited, District Jhang, Punjab. 40 MW

07 M/s AMSK Limited, Faislabad, Punjab. 44 MW

08 M/s Radiant Power Private Limited, District Khoshab, Punjab.

30 MW

Total capacity 224.70 MW

Summary-LoI’s (2013 to date)

Activity Total No. Gross Capacity

A. Letter of Intents. 16 534.10 MW

B. Proposals accepted for issuance of LOI. 08 288 MW

C. Proposals under review. 08 224.70 MW

Expected Capacity (A+B+C) 1046 MW

DISCO Wise Summary

S.No

DISCO

No. of LOI’s

Cumulative

Gross Capacity

Commercial Operation

(Gross)

Remaining

(Gross)

01 MEPCO 09 305.35 MW 26.35 MW 279 MW

02 FESCO 04 140.40 MW 62.40 MW 78 MW

03 GEPCO 01 32 MW --- 32 MW

04 SEPCO 02 56.35 MW 26.35 MW 30 MW

Total 16 534.10 MW 145.10 MW 389 MW

S.No

.

No. of

Projects

Cumulative

Capacity (MW)

Status of the Project

1 05 171 Approval of Grid Interconnection Study

/consents is awaited (from CPPAs/DISCOs

wherever is applicable)

Status of projects under LoI:

Milestone Stipulated Time

Actual Time

Reasons for Delay

Letter Of Intent (LOI)

52 Days 20 days – 40 days

• Availability of PC members from respective departments like NTDCL, CPPA-G, DISCOs, Provincial Energy Department for review /evaluate the initial project proposal.

• Time consumed by relevant stakeholders for submission of comments /views on Minutes of the Meeting.

• Submission of clarification /remaining documents for review of PC.

• AEDB’s process for verification of bank guarantee issued by sugar mill.

Initial Environmental Examination/Environmental Impact Assessment (IEE/EIA)

NOT SPECIFIED BY EPA

15 DAYS – 395 DAYS

1. There is no stipulated timeline for EPA to issue the NOC.

2. Delay without explaining any plausible reasons

3. Lengthy procedure at Environment Protection Agency (EPA) Punjab

Bottlenecks in the HPC Approval Process (Based on feedback received from Sugar Mills)


Actual Time Reasons for Delay

Grid Interconnectivity Study

30 DAYS 32 DAYS – 630 DAYS (STILL WAITING FOR RESPONSE)

• Decision pending on CPPA/DISCO account

• Delay in review observed due to burden of work and shortage of staff at NTDC

• Communication delays with NTDC

• Distribution Companies do not issue any response on study submitted until NTDC issues its approval

Generation License 27 DAYS 98 DAYS –320 DAYS • The delay and ultimately decision for cancellation / return of generation license application is often due to delays in approval of Grid interconnection study by NTDC.

• Delay due to application review and other procedures

• Lengthy Procedure at NEPRA




Grid Interconnectivity Study

30 DAYS 32 DAYS – 630 DAYS (STILL WAITING FOR RESPONSE)

• Decision pending on CPPA/DISCO account

• Delay in review observed due to burden of work and shortage of staff at NTDC

• Communication delays with NTDC • Distribution Companies do not issue

any response on study submitted until NTDC issues its approval

Generation License

27 DAYS 98 DAYS –320 DAYS

• The delay and ultimately decision for cancellation / return of generation license application is often due to delays in approval of Grid interconnection study by NTDC.

• Delay due to application review and other procedures





Award Of Upfront Tariff

10 DAYS 76 DAYS – 474 DAYS

• Consent of CPPA required for filing the application for Upfront Tariff Acceptance which takes time. There is no stipulated timeline for CPPA to issue the consent letter.


Energy Purchase Agreement (EPA)

30 DAYS 22 DAYS –560 DAYS

• Extensive negotiations project proponents/sponsors/owners with CPPA

• Approval from BOD of AEDB takes time

• Late Approval of Interconnection Study Report and Lengthy Discussion of Technical Schedules.




Implementation Agreement (IA)

15 DAYS 4 - 100 DAYS • Delay on the part of AEDBs Administration in finalization of AEDB’s Legal Counsel for review/negotiation /finalization of Project Documents.

• Meeting date /time to review project documents between legal counsels of AEDB and Project Company

Financial Closure 120 DAYS (FROM ACCEPTANCE OF UPFRONT TARIFF)

137 DAYS • Delay on the part of AEDBs Administration in finalization of Legal Counsel for review/negotiation /finalization of Project Documents.


Shahtaj Sugar Mills Ltd which is developing a 32MW (Gross)

Cogeneration Power Project at Mandibahaudin, Punjab.

• On Nov 28, 2014, LoI issued, initially valid up to Nov 25, 2015;

• On Jan 03, 2015, company requested AEDB for revision in LOI capacity i.e. from 15MW (Spill over to the grid ) to 32MW (Gross) as advised by CPPA;

• On June 02, 2015, PoE decided to revised its LoI capacity i.e. from Spillover to Gross, accordingly on Sep 15, 2015, it was communicated to M/s SSM;

• On April 02, 2015, Company submitted its request to Environmental Protection Agency Govt of Punjab for obtaining NoC which is still pending;

• On Nov 23, 2015, on the recommendations of PoE and subsequent approval of competent authority, LoI extended from Nov 25, 2015 to March 04, 2016;

• On April 05, 2016, a PoE meeting was convened in which PoE approved the request of M/s SSM for extension in the validity of LoI. Accordingly, the LoI was extended up to July 07, 2016;

• On April 22, 2016, submitted request for grant of Letter of Consent (PAR) to CPPA;

• On June 23, 2016, a PoE meeting was convened in which PoE approved the request of M/s SSM for extension in the validity of LoI. Accordingly, the LoI was extended up to January 04, 2017;

• On June 08, 2016, Company has submitted its application to NERPA for grant of Generation Licence and acceptance of unconditional Upfront Tariff;

• On June 11, 2016, a reminder also issued however, approval is still awaited;

S.No Date Activity Status /Remarks

01 November 25, 2014

LoI issued LOI initially issued for 15MW (Spill over capacity)

02 January 03, 2015

Submission of request form M/s SSM to AEDB for revision in LoI capacity i.e. from 15MW to 32MW (Gross)

As advised by CPPA

03

May 31, 2016

Environmental Protection Agency (EPA) issued No Objection Certificate

December 09, 2014

Submission of Grid Interconnection Study

M/s Shahtaj Sugar Mills Ltd which is developing a 30MW (Gross) Cogeneration Power Project at Mandibahaudin, Punjab.

Crushing Capacity 10,000 TCD

Power Plant Size 32 MW

Location Mandi Bahauddin, Punjab

Milestones Achieved Letter of Intent, Initial Environmental

Examination, Grid Inter-Connectivity study

Current Status Request for Letter of Consent (PAR)

Submission date April 22, 2016

Reminder date June 11, 2016

Still to be received

Generation License

Submission date June 08, 2016

Still to be received

Shahtaj Sugar Mills



Location Rahim Yaar Khan, Punjab

Milestones Letter of Intent, Initial Environmental

Examination, Generation License

Current Status Grid Inter-connection Studies (GIS)

Submission date September 03, 2014

Re-Submit date November 26,2014

Still Pending on CPPA/MEPCO Account

Etihad Sugar Mills



Location Chiniot, Punjab

Milestones Achieved Letter of Intent, Generation License,

Current Status

Grid Inter-connection Studies (GIS)

April, 2015 to June 2016, 5 time

Submission in CPPA

Still to be approved

Safina Sugar Mills



Location Layyah, Punjab

Milestones Achieved Letter of Intent, Initial Environmental Examination,

Generation License, Grid Inter-connectivity Study (7

time Submission), Award of upfront tariff,

Issuance of Letter of Support, Energy Purchase

Agreement

Current Status

Implementation Agreement

The Company Legal counsel submitted IA on stated

date but still nothing have been communicated by

AEDB for meeting of legal counsels and financial

close. A reminder was sent on dated June 08,

2016

Layyah Sugar Mills

Crushing Capacity 8,000 TCD Sugarcane Plus 4,000 TPD Beet


Location Mianwali, Punjab


Generation License, Grid Inter-connectivity Study (3 time

Submission), Award of upfront tariff

Current Status

Letter of Support Issued by AEDB

Company had also qualified for issuance of

LOS through AEDB Letter No.

B/3/21/2013/Biomass/Almoiz dated May 18, 2016 and

Company has also submitted the

Performance Guarantee No. BAH/0002/110/2016 dated

May 19, 2016 amounting US$ 90,000/- (USD Ninety

Thousand only) for issuance of LOS through

letter dated May 19, 2016. The LoS was issued on 23rd

June 2016.

Al-Moiz-II

Chanar Sugar Mills/Chanar Energy

Capacity 7,200 TCD


Location Faisalabad, Punjab

Milestones Achieved Letter of Intent, Initial Environmental

Examination, Grid Inter-connectivity

Study

Current Status

Generation License

26 May, 2015 (First Submission)

18 May, 2015 (2nd Submission)

NEPRA in its meeting on 16 March,

2016 decided to cancel / return the

application on the basis of delay in

submission of required information.

Application is pending with

Authority.

Alliance Sugar Mills


Power Plant Size 30 MW Gross

Location Ubaro, Sindh

Milestones Achieved Letter of Intent, Generation License

Current Status

Generation License Submitted on May 12, 2014.

NTDC approved the report on July15, 2015

Relative DISCO ("SEPCO") has not provided

approval till date. SEPCO desired that the line for

the project be constructed by NTDC or by ASML.

The matter was also discussed in the

meeting with SEPCO and AEDB on June 06, 2016.



Location Rahim Yaar Khan, Punjab


Generation License, Grid Inter-connectivity Study,

Award of upfront tariff, Issuance of Letter of

Support, Energy Purchase Agreement,

Implementation Agreement, Financial Close

Declaration

Concerns Lengthy procedures of AEDB, EPA, NEPRA

and shortage of HR in NTDC

Hamza Sugar Mills

Ramzan Sugar Mills/Chiniot Power


Power Plant Size 62.4 MW

Location Chiniot, Punjab


Generation License, Grid Inter-connectivity Study,

Award of upfront tariff, Issuance of Letter of

Support, Energy Purchase Agreement,

Implementation Agreement, Financial Close

Declaration, Commissioning Date Operation

Concerns Lengthy procedures of AEDB, EPA, NEPRA

and shortage of HR in NTDC

Thank you