Work on Neelum-Jhelum not to resume anytime soon
The work on the 969 megaWatt Neelum-Jhelum Hydropower Plant (NJHP) in Azad Jammu and Kashmjir (AJK), which has been stopped for over a year because of technical faults, is unlikely to resume in the next financial year 2025-26, according to a report submitted to the power regulator.
In the report submitted to the National Electric Power Regulatory Authority (Nepra), the Central Power Purchasing Agency (CPPA-G) has said that two power plants — Jamshoro Coal Power Plant and Shahtaj — have been considered for commissioning prior to the start of the fiscal year.
However, due to ongoing technical issues, the NJHP has not been included within the forecast horizon, it says. It is learnt that the government has already spent Rs500 billion to set up this plant. Because of the fault, the work shut down on May 1, 2024.
Furthermore, the NJHP — located at Nauseri near Line of Control (LoC) was damaged in Indian shelling on Wednesday. On Thursday, Water and Power Development Authority (Wapda) Chairman Sajjad Ghani visited the site to assess the damage to the structures and installations, and meet the staff.
Speaking on the occasion, the Wapda chief said that Indian attack that damaged the hydraulic power unit 1 of intake gates, structure at de-sander units and residential camp, was in violation of the international laws including the Geneva Conventions.
Electricity demand
Meanwhile, the CPPA-G has also submitted a forecast of electricity demand in upcoming financial year — a key determinant in setting the end-consumer tariffs, with any fluctuation having a direct impact on tariff adjustments.
It forecast the increase of 2.8 to 5 % in the electricity demand based on historical elasticity estimates, and GDP projections by the International Monetary Fund (IMF). The projections form the basis for the normal and high demand scenarios used in this analysis.
The report outlines seven scenarios, specifically demand, hydrology, fuel prices, and exchange rates. Across the analysed scenarios, indigenous fuels constitute between 55 to 58% of the overall energy mix, while clean fuels contribute between 52 and 56%.
To account for potential variability, two distinct demand scenarios have been developed based on extensive consultations with relevant stakeholders. The normal demand scenario reflects a projected 2.8% increase over Jan-Dec 2024, while the high demand scenario reflects a projected 5% increase.
Power tariffs
Fuel prices are a key driver of the fuel cost component within the Power Purchase Price (PPP). Accordingly, the forecast incorporates assumptions for normal fuel prices based on reputable data sources to ensure accuracy and relevance.
The CPPA-G has projected the PPP at Rs26.70 per unit based on a high exchange rate of Rs300 per dollar, low hydrology, standard fuel prices, and normal demand. Another scenario, which assumes normal demand and an exchange rate of Rs280 per dollar, results in a low PPP at Rs24.75 per kWh.
For imported fuels, price assumptions are based on market data from Argus Media and Plans, while local fuel prices are informed by inputs from NEPRA, the Oil and Gas Regulatory Authority (OGRA), and the Thar Coal and Energy Board (TCEB).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
3 hours ago
- Business Recorder
US Treasury chief Bessent accuses India of profiteering on Russian oil purchases
WASHINGTON: U.S. Treasury Secretary Scott Bessent on Tuesday accused India of profiteering from its sharply increased purchases of Russian oil during the war in Ukraine, saying Washington viewed the situation as unacceptable. Bessent told CNBC in an interview that Russian oil now accounted for 42% of India's total oil purchases, up from under 1% before the war, and contrasted that with longtime buyer China, whose Russian oil purchases had increased to 16% from 13%. 'India is just profiteering. They are reselling,' Bessent said. 'What I would call Indian arbitrage - buying cheap Russian oil, reselling it as product has just sprung up during the war - which is unacceptable,' he said. U.S. President Donald Trump this month announced an additional 25% tariff on Indian goods as a punishment for New Delhi's purchases of Russian oil, bringing the total additional tariffs announced since he took office to 50%. Trump has credited the Indian tariffs as piling pressure on Russian President Vladimir Putin to agree to work toward ending the war in Ukraine, but has stopped short of imposing similar tariffs on China over its purchases of Russian oil. US adviser Navarro says India's Russian crude buying has to stop Bessent, asked about the Trump administration's failure to move ahead with similar tariffs on China, said the situation was 'completely different' given that Beijing was a longtime buyer and had not engaged in the kind of 'arbitrage' done by India. U.S.-India relations have been strained by Trump's tariffs after months of forecasts by the U.S. president and other officials that they were close to reaching an agreement with Prime Minister Narendra Modi's government on a trade deal that would have lowered the tariff rate. India on Tuesday temporarily suspended an 11% import duty on cotton until September 30, a move seen as a signal to Washington that New Delhi is willing to address U.S. concerns on agricultural tariffs. It came after the abrupt cancellation of a planned visit by U.S. trade negotiators to New Delhi from August 25-29.
Business Recorder
9 hours ago
- Business Recorder
India PM to visit China: security chief
NEW DELHI: Indian Prime Minister Narendra Modi will visit China later in August, his security chief said Tuesday during talks with Beijing's foreign minister in New Delhi. Modi will attend the Shanghai Cooperation Organization summit opening on August 31 in Tianjin, his first visit to China since 2018, Ajit Doval said, in public comments at the start of a meeting with Beijing's Foreign Minister Wang Yi. 'Our prime minister will be visiting for the SCO summit,' Doval said, speaking of 'new energy' in diplomatic ties. China 'attaches great importance' to Modi's visit to the SCO summit, Wang said, according to an official translator. 'History and reality proves once again that a healthy and stable China-India relationship serves the fundamental and long term interests of both of our countries,' Wang added. Wang is due to meet Modi later on Tuesday. The world's two most populous nations are intense rivals competing for influence across South Asia, and fought a deadly border clash in 2020. India is also part of the Quad security alliance with the United States, Australia and Japan, which is seen as a counter to China. But caught in global trade and geopolitical turbulence triggered by US President Donald Trump's tariff war, the countries have moved to mend ties. Indian foreign minister meets China's Xi During talks on Monday with Subrahmanyam Jaishankar, India's foreign minister, Wang said the two countries should 'view each other as partners and opportunities, rather than adversaries or threats'.
Business Recorder
10 hours ago
- Business Recorder
India removes import duty on cotton in temporary relief for garment industry
NEW DELHI: India has exempted import duties on cotton from August 19 to September 30, fulfilling the demand of industry groups who said exemptions would help make the sector more competitive. The temporary suspension of the duty, announced in a government order late on Monday, is seen as a relief for India's garment industry, which is reeling from a steep 50% tariff on shipments to the United States. The US tariff comprises an existing 25% levy and an additional 25% set to take effect later this month, imposed as a penalty for India's purchases of Russian oil. The effective rate compares unfavourably with 20% for Bangladesh and Vietnam, and 30% for China. Industry bodies such as the Confederation of Indian Textile Industry (CITI) had urged the government to scrap the cotton import duty to help make the sector more competitive. Before the exemption, cotton imports were subject to an 11% duty. Industry officials now expect the government to extend duty-free cotton imports beyond September. Reuters earlier reported that some Indian exporters were scrambling to explore manufacturing options overseas to offset the impact of the higher tariffs. India's garment sector was already grappling with a labour crunch and limited production capacity. The prospect of exporters relocating production abroad poses a further challenge to the government's 'Make in India' manufacturing drive. India's tax restructuring a 'huge reform', will boost competitiveness, Maruti Suzuki chair says India aims to increase textile exports to $100 billion by 2030. The sharp rise in US tariffs comes just as India was emerging as a strong alternative for American garment buyers, with Bangladesh facing political uncertainty and companies seeking to diversify supply chains beyond China.
