1. Electricity Basket Price & 2013 Power Policy Hammad Hashmi Advisor Technical (USAID) MWP

2. What is a Basket Price of Electrcity? The basket price of electricity may be defined as – “The price of energy mix from thermal, hydro, nuclear, wind, solar, or any other source by taking its weighted average cost.” It depends upon the economic and social conditions of a country or nation.

3. Different Technology Power Plant Comparison Power Plant Technology Plant efficiency Estimated Cost per KW Installation Time required for Installation & Commissioning Open Cycle Gas Turbine 33%-44%$500-6001 Year Combined Cycle Gas Turbines 47%-60%$1100-12002.5 Years Engine Based (Open cycle) 42%-45%$800-8501 Year Engine Based Heat Recovery 47%-49%$950-10002 years Steam Power Plant Super Critical Boiler HFO 44%-45%$1000-11003 – 4 years Coal Power Plant Sub-Critical 31%-33%$1200-12502.5 – 3 years Coal Power Plant Critical Boiler 38%-39%$1400-15003-4 years Coal Power Plant Super Critical 41%-43%$1600-17004-4.5 years Solar Power Plant NA$2500-27001 year Hydel Run of River with Diversion NA$2500-28002.5-3 years Hydel Run of River with Gate Structure NA$3000-35003-4 years Hydel with water storage NA$3500-40005-7 years Wind NA$1150-12501-1.5 years

4. Basket Price (Generation) Basket Price Calculations for Yearly Generation Addition in line with 2013 Power Policy Total MW Required/Year2300MW Power Plant Technology Average Price%age Share MW Required Installatio n Cost Plant Factor Unit Generation Per Unit Cost (NEPRA) Total Cost (Electricity) USD/KW MWMil USD GWh Cent/KW HMill USD Hydro3,20033%7592,42943%2,8596172 Solar2,5002%4611517%692114 Wind2,20013%29965835%91712110 Thermal Comb Cycle LNG1,20010%23027688%1,77313230 Thermal Heat Recovery HFO9505%11510985%85616137 Nuclear170013%29950882%2,1485107 Thermal Coal1,40024%55277382%3,9659.1361 Average Price1,896100%2,3004,868 12,5868.9911,132

5. Basket Price for End Consumer Average Generation Price8.891 Cents/KWh NTDC Losses3.1% NTDC Wheeling Charges.89 Cents/KWh Price for DISCO’s10.16 Cents/KWH Average Disco Losses17% Disco DM and Other1.1 Cents/KWH End Consumer Price12.987 Cents/KWh

6. System Augmentation Cost Average Cost for 1kW Generation$1989/KW The Cost of Transmission (IGTDP)$398/KW The Cost of Distribution (IGTDP)$ 328/KW Total Cost per kW Gen to Dist.$ 2715/KW

7. National Power Policy Specifications Standards Regulations Codes National Policy

8. Significant Points of 2013 Power Policy (Generation) Adequate Power Generation Capacity Cheap Generation and affordable Electrcity for all energy consumers Energy Efficiency Equipment and conservation culture Better usage of indigenous resources for power generation Efficient power plants induction

9. Significant Points of 2013 Power Policy (Distribution & Transmission) Create a cutting edge transmission network Minimize inefficiencies in the distribution system Minimize financial losses across the system Align the ministries involved in the energy sector and improve the governance of all related federal and provincial departments as well as regulators Reduction of theft culture

10. Targets of 2013 Power Policy Targets from 2013 to 2017 Reduction in demand & supply gap from 5000MW to 0 MW The end consumer price less than 10 cents/kWh The system line losses reduction from 21% to 16% Increase collection rate from 85% to 95%

11. Generation Strategy Better efficiency thermal power plants Renewable energy share which balances the end consumer price of less than 10 cent/kWh Privatization of public generation companies One window operation from PPIB

12. Transmission Strategy Reduction in transmission losses from 3.1% to 2.5% Primary transmission system from 500kV AC to ±500kV DC Bi-polar system Strengthening 220kV loop around major cities

13. Distribution Strategy Decrease in system losses from 17% to 12% Improvement in governance Induction of smart metering system Privatization of Distribution companies

14. Tariff of a Power Plant Two Part Tariff Variable Cost (Energy Charges) Fuel Cost or Water Cost, Variable O&M, Variable Costs Fixed Cost (Capacity Charges) Fixed O&M, Working Capital, Return on Equity, Debt Servicing, Insurance Charges

15. Tariff Structure

16. Thank You Q & A