The Small Hydro Power Developers Association said yesterday that finally a transparent tariff setting process was in place for Non Conventional Renewable Energy (NCRE).
It particularly appreciated the initiative taken by the Public Utilities Commission in inviting stakeholders and the public to give views and critic the parameters and the tariff setting policy.
Previously it was a one-sided process. However, the association feels that some critical parameters, such as project costs, operational expenses of plants and the plant factors, on which their members made representations, were not adequately considered in the final tariff. Yet, it appreciated the opportunity given to put its views across.
They said the offered tariff for hydros was fairly progressive although it did not reflect the real cost base. The project development activities slowed down considerably in 2011 and 2012 with very low tariff offered in the previous announcement.
It is the whole country that suffers if NCRE small hydropower development slows down. Small hydros are not only the cheapest source of energy for the country but also help to save considerable foreign exchange flowing out of the country as they directly substitute oil and coal usage in power generation. Small hydros save more than Rs. 10 billion in foreign exchange every year and are the most environmentally friendly power generation source.
The present contribution from NCRE sources amounts to 7% of the national annual energy generation, the leading sector being small hydro power. There are 89 plants in total which are in operation with a combined capacity of over 200 mega watts.
The newly-published tariff will pave the way for the enhancement of this sector and the association expects an additional 100 mega watts to be added to the national grid within the next three years due to this positive move.
Last year tariff discouraged the developers in developing new plants especially in the light that existing projects were economically less viable due to difficulties in developing these projects.