Dear Readers,

Power sector in the country has been passing through a challenging phase of reform and restructuring. During the regime of reforms and restructuring of power sector, which is in it’s transition phase, the quality of regulation is key to the investment climate. It determines the rules for investment finance and private participation. Effective regulation mobilizes investment finance at minimum cost and ensures good performance, the benefits of which can be passed on to consumers.  The NEPRA as the principal regulator has been playing a pro-active role in judiciously balancing the interests of the consumers as well as investors, which is a key factor for restoration of the investor’s confidence and the stakeholders are looking towards the Authority with optimism for fair and transparent regulation of the sector.

The other challenge in the coming years is to meet the increase in electricity demand in Pakistan and better power supply and demand side management. Currently power supply and demand gap is widening due to sharp increase in load growth and slow response in putting the adequate generation capacity in place. In this scenario, NEPRA has been facilitating the seminars, workshops, and discussions on the subject of energy conservation and load management. NEPRA has given its recommendations to federal government to take some steps to enforce energy conservation in the country.

The power demand is projected to grow at 7.9 % during the period of 2005-10 and will increase from 15500 MW in 2005 to about 21500 MW in 2010.  In order to meet the future power load requirement during 2005-10 government is encouraging investment in hydel and renewable energy projects to enhance the generation capacity along with other institutional reforms in power sectors. Government is encouraging the fast track power projects and NEPRA has been facilitating the potential power producers by processing the licence applications of fast track power projects with accuracy and timeliness. NEPRA also established the upfront tariff for various technologies including Wind farms licensing and tariff determinations of IPPs. Nevertheless, to meet the overall energy requirement there would be a need to explore the possibility of regional collaboration for integrated power infrastructure like power grids and gas pipelines. The options to import power from Iran and Central Asian states are under consideration.

Keeping in-view the changing economic conditions at national and international level and economic activities under the liberalization of economy, the energy resources will play a significant role as determinant factors of economic growth.  South Asia's growing energy demands can be met through harnessing energy resources. Therefore, creation of South Asian energy market and trade would provide diverse energy resources leading to sustainable energy resource and economic growth.

The year 2006-07 has been an eventful year for the NEPRA in terms of meeting its responsibilities under the statute. NEPRA issued licenses to several power projects (IPPs) of 1630 MWs including Wind, Thermal and Hydel technologies. The Grid Code has put in place a framework facilitating the operation, maintenance, development and planning of an economic and reliable national grid. NEPRA also started the monitoring phase of performance standards of generation, distribution and transmission companies. NEPRA issued several orders and regulations having long-term implication during 2006-07 with due regard to the demands of accountability, transparency and professionalism.

The year 2006-07 was beset with challenges of various kinds and the NEPRA with the active support of the Members, Officers and Staff and active cooperation and participation of the stakeholders discharged the responsibilities to their best ability. The NEPRA looks forward to the continued support of all stakeholders in its mission towards sustainable development of the power sector in Pakistan.