The Central Power Purchasing Agency-Guaranteed (CPPA-G) has forecast a reduction in the Power Purchase Price (PPP) for the fiscal year 2025-26, with the projected price range spanning from a decrease of Re 0.30 per unit to Rs 2.25 per unit, Business Recorder reported. Â
According to the CPPA-G’s report submitted to the National Electric Power Regulatory Authority (Nepra), the reduction is based on seven different scenarios, taking into account variables such as demand, hydrology, fuel prices, and exchange rates.
The forecast suggests that the PPP for 2025-26 will drop from the current rate of Rs 27.35 per unit to Rs 24.75 per unit. The report highlighted a number of potential scenarios, with indigenous fuels accounting for 55% to 58% of the energy mix, and clean fuels contributing between 52% and 56%.Â
Among the analyzed scenarios, Scenario 5, which assumes a high exchange rate of Rs 300/$, low hydrology, normal fuel prices, and standard demand, results in the highest PPP of Rs 26.70 per unit.Â
On the other hand, Scenario 4, which anticipates normal demand and an exchange rate of Rs 280/$, produces the lowest PPP at Rs 24.75 per unit due to reduced capacity charges.
CPPA-G’s report also includes detailed projections for the reduction in PPP across each scenario. Scenario 1 forecasts the largest reduction at Rs 2.25 per unit, while other scenarios predict decreases of Rs 0.96, Rs 1.12, Rs 0.67, Rs 0.30, Rs 0.45, and Rs 0.78 per unit respectively.
These projections were developed through extensive consultations and sensitivity analysis under the regulatory framework. The forecasts incorporate a range of assumptions, including expected demand growth, fuel price fluctuations, hydrological conditions, and exchange rate changes.Â
However, CPPA-G cautioned that these projections could change depending on variations in underlying assumptions, such as commissioning schedules, generation fleet changes, and other economic parameters.
