Govt and bureaucracy in conflict over solar net metering

The federal government is facing a dilemma regarding the widespread adoption of solar power systems across the country. On one hand, the bureaucracy is portraying solar energy as catastrophic for the existing power sector. On the other hand, high-ranking politicians are not fully convinced by this narrative.

Discussions with bureaucrats and officials close to politicians have revealed that net metering, the process of integrating solar power into the grid, has become a major headache for the government in Islamabad.

The bureaucracy is advocating for an “Australian model” of net metering, proposing measures to curb its growth, such as reducing buyback rates or considering alternative approaches.

One active proposal being presented to Prime Minister Shehbaz Sharif is to net consumers’ bills instead of their units, which would result in consumers being charged higher rates. The plan is to have two separate invoices – one for imported electricity and another for the electricity exported from solar systems, with the export rate to be determined by the regulatory authority, Nepra.

However, these proposals are facing stiff political resistance. The Power Minister, Sardar Awais Leghari, has ordered an investigation into the leakage of information about solar power integration to the media.

The Power Division maintains that the rapid pace of solar system installation is effectively adding an Independent Power Producer (IPP) to the system. However, the current distribution network, especially the transformers, is overburdened due to the influx of power from domestic solar systems, requiring investment to upgrade the infrastructure.

Prime Minister Shehbaz Sharif has directed the Power Division and Nepra to finalize recommendations on rationalizing the net metering tariff. The Power Division has submitted its proposals to the Prime Minister, which include converting the existing net metering regime to a gross billing system, creating a separate tariff category, and revising the buyback rates.

According to sources, the Power Division’s finalized recommendations have not received an encouraging response from the top political office.

Furthermore, the System Operator, NPCC, has raised concerns about the impact of the large-scale solar generation that is expected under the upcoming Competitive Trading Bilateral Contract Market (CTBCM) framework. NPCC argues that the expectation that solar generation would completely offset thermal generation during the day is not accurate.

NPCC has highlighted operational challenges, such as the need to maintain minimum loading on captive coal-fired power plants and RLNG plants to ensure grid stability and compensate for the intermittency of solar power. Additionally, the constraints imposed by the gas supplier, SNGPL, on RLNG consumption rates during the day would require additional thermal generation, leading to increased ancillary charges that would be passed on to consumers.

NPCC has requested that the operational constraints be considered, along with the commercial and financial viability, when determining the upper limit of solar generation induction under bilateral contracts and the overall resource mix.