January 14, 2019: Minister for Power, Omar Ayub Khan has said that the government is determined to meet the future energy needs of the country, therefore alternate power policy would be announced within next two months.
“At present, the energy and the capacity payment component is 60 percent and 40 percent respectively, and our institutions have to bear the capacity charges also because Pakistan is single buyer market and it is the government that purchases power from power producing companies” he said.
The minister explained that for the needs of industrial units, the government has to ensure availability of power in the system. Therefore, it has to pay the power producers the energy as well as the capacity charges.
The capacity payment includes charges like interest cost and fixed overhead that are paid to these companies to keep their machines prepared for generation under the merit order. The energy payment is made to ensure availability of fuel and lubricants, he explained.
He further stated that with installation of more plants, the component of capacity payment may further increase in the bill.