Beware of a glut in hydel electricity

There’s going to be a glut of hydel-based electricity, and it won’t even remotely be cheap. “People think hydel electricity is sasta. That’s absolutely wrong. All run-of-the-river projects, except Dasu, will have 10-11 cents (per unit cost),” said Shahid Sattar, energy expert and executive director of the All Pakistan Textile Mills Association, while participating in a panel discussion on Thar energy projects on Monday. As much as 20,000 megawatts of hydel capacity is in the pipeline, with nearly all projects priced at 10-11 cents a unit, he said. “They’re all in IPP (independent power producer) mode. Where’s the room for expanding cheaper solar or Thar energy? You’ve already tied up the pie,” he said. The share of hydel in the power generation mix for the first half of 2022-23 was 32.2 per cent versus the 14pc of imported and local coal. “In the medium term, I don’t see any relief in energy costs. These take-or-pay contracts have to be honoured. Hydel projects are a must-run,” he said while noting that Pakistan will be bound to pay heavy capacity payments, which constitute about 99pc of the cost of hydel power.