07 Oct


Pakistan has been facing acute energy crisis since last numerous years. The demand for energy is increasing rapidly in Pakistan. Energy is one of the most vital development priorities of Pakistan. The economy of Pakistan is mainly reliant on the electricity being produced by coal, oil, and natural gas. The total energy produced only makes up for a part of the total energy consumption. On the contrary, Pakistan possesses a huge potential for renewable energy sources like wind, solar, hydropower and biomass. Proper development and implementation of these alternative energy technologies can bring many benefits to the country in terms of energy, economy, environment and national security.

Pakistan's energy policy has gone in the opposite direction of global trends. Pakistan abandoned its earlier targets of 1235 megawatts of wind and 430 megawatts of solar, determined in the 2006 policy for development of Renewable Energy (RE) for power generation. The Alternative and Renewable Energy (ARE) policy adopted by this government in 2019 reset the target for energy from renewable sources by 2030 to 30 per cent excluding hydropower. This target was reduced further to 12pc by Indicative Generation Capacity Expansion Plan (IGCEP) approved in 2021. IGCEP committed to the 'least-cost option'; yet it has revisited the definition and included seasonally flowing hydropower in the RE category, that Alternative and Renewable Energy  (ARE) had not. This change of heart has effectively elbowed solar and wind energy out of the equation and paved the way for foreign investments in hydropower instead of solar that can be commissioned at one-fourth the cost and time, mostly with domestic financing. It has also accentuated  differences between the provinces who have more nuanced perspectives.

All this was happening at a time when solar power had become  the cheapest  electricity in history ---- cheaper than coal and gas in most major countries. The cost of electricity from solar photovoltaic (PV) panels has decreased by 90pc since 2009, according to the annual World Energy Outlook 2020, by the International Energy Agency. Instead of following the economic imperatives.

During this period, India attained the fourth global position in wind power and fifth in solar  installed capacity. Their renewable power generation capacity has recorded an annual growth rate of over 17pc. The Indian government had an initial target  of 20 gigawatt capacity for 2022 and that was achieved four years  ahead  of schedule. This quick success was enabled by importing Photovoltaic (PV) panels from China while  the 1000MW Quaid-e-Azam solar park floundered  and languished. In China, likewise, the RE capacity reached an estimated 40pc  of the total installed capacity, and about 26pc of total power generation. India and China are now both leading Asia on green energy  and have achieved an accelerated economic growth rate by reducing the cost of development.

The market for RE is created by 76pc since the Paris Agreement. forty-five countries have already  committed to no new coal power plants. Pakistan announced it would shelve two coal plants producing only 2600MW whereas, at the same time, Bangladesh declared the cancellation of 10 such planned plants of 8711 MW. Pakistan's announcements lacked both courage and homework.

No wonder the country has backtracked from the commitment made by the Ex-Prime Minister Imran Khan  at the Climate Action Summit in December 2020, where he had declared: "We will not have any more power based on coal." It has since been changed to no more 'imported' coal. He had also committed to liquification and gasification of indigenous coal. No plans for nine operating and another five almost completed projects have so far been announced. As it is a new romance that just started a few years ago, Pakistan has not yet consigned coal to history.

It is against this background that coal imports have been growing at an annual rate of 19.26pc. While the coal power plants were justified on the basis of low-graded Thar coal, in reality, the energy wheel is run by importing high-grade South African coal. In addition to the use for energy, coal is also imported for our fast-expanding cement industry, now propelled to fuel the housing construction to turn around the economic growth rate.

Once the cheapest source of energy, hydropower has now been superseded by solar and wind despite their energy storage batteries. Except for the Tarbela and Mangla dams, all other public-sector hydropower projects have witnessed delays and cost overruns. The average per unit cost at at the 969MW Neelum Jehlum Hydroelectric Project, for example, has escalated to 16-18 kilowatt per hour,  compared  to 4-5kWh from solar power plants. In the absence of any financial closing before starting construction, the envisioned large dams (Diamer-Bhasha, Mohmand) and 'run-of-the-river' ones (Dase, Kohala, Suki Kinari, Karot, Azad Pattan) will face similar cost  overruns. Their pricing  structure  will be multiple times more expensive. Clearly, water  storage  needs must be separated  from energy needs. Solar plants  can be installed  within  months and the State Bank can help further reduce their prices by cutting financing costs through simply extending  the longer tenure of loans to say 20 years, instead  of the present  seven to 10 years. 

While we have excess electricity production, the government does not always acknowledge  that 61 million people still have no access to electricity or suffer from poor quality of access. Almost 46pc of our rural population is living without  electricity. It is estimated that $20 billion required to upgrade the transmission network by 2040. Off-grid solutions can help reach the underserved areas rather than waiting decades for the upgradation of transmission lines.

Electricity can be provisioned  through solar  mini or micro-grids to bring light to their lives. In addition to getting urban population off-grid through solar home systems, solar energy can also be supplied to schools, health facilities, SMEs, etc, through microfinance facilities and models of rural energy  entrepreneurship. The National Electric Vehicles Policy  will become more meaningful if the charging infrastructure for the emerging Electric Vehicle (EV) market is supported by hybrid solar systems. It is imperative that Pakistan adopts pro-poor  approaches to energy production and supply to reduce the cost of economic development. After all, reliable, cheap, and clean energy is a right of all citizens.

Conclusion :

Pakistan has struggle to resolve its energy shortage problems for decades. As the country is now facing an unprecedented energy crisis the drive to find effective long-term energy solutions is stronger now than ever before. Renewable energy resources such as wind and solar energy are abundant in Pakistan and show significant  technical potential to meet  energy  needs; however, the development of renewable energy power projects is hindered by social, economic, technical, institutional and informational barriers.

The answer to strengthening the presence of renewable energy technologies in Pakistan does not lie in any one solution  to these  challenges; rather, a holistic approach must be employed. A number of approaches have been discussed to address the roadblocks which RETs face. The government of Pakistan  must take bold steps towards restructuring energy policy in order to increase energy security and move towards a sustainable energy future. Primarily, policies should focus on bridging the competitive gap between RETs and fossil fuels through measures such as subsidy transfers, feed-in  tariffs  and accounting for negative and positive externalities. Of course, increasing the competitiveness of RETs alone is not sufficient; issues such as poor infrastructure, financing and technology access must also be addressed. However, the biggest challenge lies in initially stimulating growth in renewable energy. Upon addressing the most significant challenges facing RETs, market penetration  will naturally develop and the support for addressing further RET  challenges will ensure.

The path towards a sustainable  energy future  in Pakistan  is by no means simple, but a solution certainly exist. Although a number of approaches have been presented to encourage the growth of renewable energy in Pakistan, all of these solutions will undoubtedly require significant effort and dedication on behalf of the government. Pakistan must consider the long-term social, economic and environmental benefits of renewable energy power generation for its people. Investing in sustainable energy technologies today will pave the road towards a secure energy future for tomorrow.

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