Energy sector of Pakistan, which is currently wrestling with a hefty debt of almost 2.3 trillion. As a result of this, a common man has to face hyped electricity prices. In Pakistan’s energy sector, the National Electric Power Regulatory Authority (NEPRA) has a crucial role. NEPRA (National Electric Power Regulatory Authority) was established under section 3 of the Electric Power Act, 1997. It is an independent regulatory body that is responsible for regulating the generation, transmission, and distribution of electric power in Pakistan.
NEPRA’s Functions & Responsibilities
NEPRA has a broad spectrum when it comes to its functions and responsibilities. It has an aim to create a stable, more efficient, and fair electricity market for consumers and distributors both. It issues generation licenses for transmission and distribution companies. Furthermore, tariffs are set by NEPRA that electricity consumers have to pay. To ensure the quality of services provided by NEPRA-approved companies, it plays a vital role. NEPRA also monitors the activities of power companies to ensure compliance with regulations and licenses. Last but not least, along with the protection of consumers’ rights, it also advises on power-related issues to the government.
What is a generation license?
At its core, a NEPRA Generation License is a formal authorization granted by the National Electric Power Regulatory Authority (NEPRA) to entities engaging in the production of electricity. This license makes companies eligible to generate power and inject it into the national grid or distribute it to consumers.
Types of Generation Licenses
On the basis of the source of energy, NEPRA categorizes generation licenses into the following categories.
- Thermal: This license is for power plants using fossil fuels like coal, natural gas, or oil.
- Hydroelectric: License issued for the power plants responsible for harnessing the energy of flowing water.
- Renewable: This includes licensing for power plants utilizing renewable energy sources, such as solar photovoltaic, wind turbines, biomass, and geothermal.
Why a Generation License is Mandatory?
Any party or entity that intends to generate and distribute electricity in Pakistan needs to get registered with NEPRA first. This license is a mandatory requirement that can not be neglected. This generation license allows NEPRA to properly analyze and regulate the power generation sector in Pakistan. Apart from that, it ensures that consumers get electricity on fair tariffs. Furthermore, regulating power generation helps maintain the stability and reliability of the national grid, preventing disruptions and ensuring a consistent power supply. For the NEPRA-approved vendor list, please visit here.
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