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Pakistan Plans to Increase Energy Generation by 300 percent and Phase out Thermal Power in 20 Years

If you want to know how Pakistan plans to increase energy generation capacity by 300 percent, this article is just for you.

According to recent reports in the energy sector, National Transmission and Despatch Company (NTDC) in consultation with public and private sector agencies and consultants have prepared an Indicative Generation Capacity Expansion Plan (IGCEP) 2018-40 which proposes to phase out almost all thermal power plants while increasing the energy generation capacity by 300 percent in the next 20 years.

The IGCEP 2018-40 states that the government of Pakistan (GOP) needs to increase the generation capacity based on three tentative economic growth (GDP) scenarios which are as follows:

Scenario 1: If Pakistan’s GDP growth rate is at 4.5 percent then the GOP needs increase generation capacity to 65,100 megawatts to generate 370,500 gigawatt-hour.

Scenario 2: If Pakistan’s GDP growth rate is at 5.5 percent then the GOP needs increase generation capacity to 80,500 megawatts to generate 458,000 gigawatt-hour.

Scenario 3: If Pakistan’s GDP growth rate is at 7 percent then the GOP needs increase generation capacity to 110,000 megawatts to generate 630,500 gigawatt-hour.

Current Energy Capacity and Mix

Please find the breakdown of Pakistan’s existing energy capacity:

  1. Total Installed Energy Capacity – 33,500 megawatts
  2. Available Energy Capacity – 29,000 megawatts
    1. Coal – 3,000 megawatts
    2. Hydro – 9,7000 megawatts 
    3. Thermal – 20,000 megawatts
    4. Nuclear – 1,945 megawatts
    5. Renewable – 1,900 megawatts
Proposed Energy Capacity and Mix

The IGCEP 2018-10 proposes the following additions in the total energy capacity:

  1. By 2025 – 17,300 megawatts
    1. Public Sector Investment   – 6,000 megawatts
    2. Private Sector Investment – 11,300 megawatts
  2. By 2030 – 8,600 megawatts
  3. By 2040 – 98,100 megawatts
    1. Hydro – 29,000 megawatts
    2. Local Coal – 20,000 megawatts
    3. Imported Coal – 5,000 megawatts
    4. Nuclear – 4,300 megawatts
    5. Renewable – 16,000 megawatts 

Note: The GOP plans to phase out oil based thermal power plants which would mean stricter contract renewal requirements. It makes us wonder how private oil based thermal power plant operators would negotiate their contracts with the GOP. 

The GOP also intends to reduce Regassified Liquid Natural (RLNG) projects by adding “take or pay basis” concept. 

IGCEP 2018-40 Objectives

The rationale behind IGCEP 2018-40 is to meet the rising energy demand by focusing on cost efficient energy generations options. We have deduced the exact objectives of IGCEP 2018-40 below.

  1. Increase affordability of local consumer by encouraging cost efficient projects.
  2. Focus on harnessing indigenous resources.
  3. Strengthening strategic China-Pakistan Economic Corridor (CPEC) based projects.
  4. Increase the difference between peak load requirements verses installed load requirements. 
  5. Be self sufficient and less dependent on foreign imports. 
  6. Increasing Pakistan’s economic security and sustainability. 
Conclusion

Keeping in view of GOP’s ambitious plans to improve the energy generation capacity by 300 percent by 2040, work will be challenging as various existing private sector investors will need to be given incentives and financial security. GDP growth would also need to be closely monitored along with the scenarios presented in the IGCEP 2018-40. 

A few questions arise, what if the GDP is below 4.5 percent, then what will happen? How will the plan be executed then and how will a local electricity consumer be effected? Keeping all our questions in mind let us hope that progress is carried out with dedication and selflessness.   

Read more news and articles on EnergizedPAK by clicking here.

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Top 5 Updates on Pakistan’s Renewable Energy Sector

Interested to find out the top 5 updates on Pakistan’s Renewable Energy Sector? This article will help you gain insight on the development of Pakistan’s Renewable Energy Sector.

Pakistan’s Renewable Energy Policy

Pakistan’s renewable energy policy defines Pakistan’s stance and commitment in improving its national electricity mix. Some goals are short term while other are middle and long term. These goals determine how Pakistan intends to contribute to  renewable energy on a global scale. 

Pakistan is blessed with tremendous Renewable Energy (RE) potential (Solar, Wind, Hydro, etc.) which can be utilized for power generation to meet its energy needs.

To increase development of Renewable Energy sector, the Government of Pakistan’s (GOP) Ministry to Energy (Power Division) in consultation with all relevant stakeholders developed a strategic policy implementation road-map in 2006.

Dealing with the immediate threat of the ‘Global Warming’ worldwide, Pakistan too faces the brunt of this extreme phenomenon either via excessive rise in temperature and irregular weather patterns

As awareness regarding ‘Global Warming’  is rising throughout the media and online platforms; most nations are waking up to this impending threat and are switching to Renewable Energy (RE) by continuously making updated policies which facilitate their populace through cheaper and cleaner alternative.

In the last decade, Renewable Energies (REs) have seen significant growth in different parts of the world in terms of research and deployment (R&D), technological advancements and cost competitiveness.

Experience under Renewable Energy (RE) Policy 2006 coupled with international best practices provides the GOP basis for more comprehensive and updated framework which is now known as the Renewable Energy (RE) Policy 2019. This policy’s sole purpose is to create a favorable environment for the sustainable growth of RE Sector in Pakistan.

The Salient features of Pakistan’s Draft Renewable Energy Policy (2019) are:

(A) Invites investment from the Private Sector (IPPs – for:

(a) sale of Power to Grid,

(b) Captive cum Grid Spill Over Projects – Self Use and Sale to Utility,

(c) Captive Power Producers – Dedicated use only,

(d) Isolated Grid Small/ Stand Alone Power Projects

(e) Apart from the IPP Category, the Projects would not require LOI, LOS or  IA from the Government.

(B) National Transmission & Dispatch Company (NTDC) and Central Power Purchasing Agency (CPPA) would buy the Electricity from the Projects:

(a) Wheeling Concept of Electricity Use.

(b) Allows Net Metering & Billing so that the Producer can sell surplus Electricity at one time and receive electricity from the grid at another time and settle accounts on net basis.

(c) Deregulate small scale (Micro, mini & Small) power production through Renewable Energy

(d) Simplified Tariff Determination

(e) Investor is protected from the variability Risk

(f) Facilitates Projects to obtain Carbon Credits

Tapping into Other Wind Corridors

Tapping Wind Corridors

The Alternative Energy Development Board (AEDB) on 25th January 2018 held a meeting to press ahead with the plan of exploiting the wind energy potential in Balochistan by undertaking a comprehensive resource assessment of potential areas in collaboration with the provincial government and the national transmission company.

According to the Wind Data Map the coastal areas like Gwadar and Pasni in Makran district provide good conditions and climate for installation and working with the wind turbines.

There has been no update regarding the survey and the feasibility which were supposed to be carried by AEDB in this regard to attract investors in these regions. No Investor has sought an LOI to Tap into Balochistan and Khyber Pakhtunkhwa as yet.

Focus of Government of Pakistan (GOP)

The government’s recent policy changes on renewable energy development shifting their attention from Renewable Energy to Coal have dealt a grievous blow to wind energy sector.

As mentioned earlier the GOP had an open door policy for Renewable Energy Investors that had promised a new dawn of clean and cheap power for an energy starved Pakistan. Advanced industrial nations like Germany and Denmark produce 42% and 14% of their electricity by wind alone whereas Pakistan is producing less than 1 percent.

AEDB & PPIB Merger

The administrative control of AEDB was transferred to Ministry of Water and Power (MoW&P) in In 2017, the MoW&P, in its summary requested approval to empower Private Power & Infrastructure Board (PPIB) to undertake functions of AEDB in addition to its existing functions. Although the matter was approved by the competent authority, no steps have yet been taken to implement this decision. Currently both Bodies are working Independently as per their previous Mandate (2006). It has been highlighted that due to the political situation of Pakistan implementation of the merger has been on Hold. Progress may be expected after the Elections are carried out in July 2018.

Renewable Energy Future

Regarding the Future of Renewable Energy in Pakistan, Ex-Federal Minister for Power Division Sardar Awais Ahmed Khan Leghari had stated in January 2018 that the Ministry of Energy was planning to establish a Renewable Energy Institute with an aim to conduct research, study existing potential and propose policy measures for government’s consideration.

Highlighting the potential of renewable energy in Pakistan, the minister pointed out that in order to tap such resources and pass on due benefits to consumers, the government had decided to hold competitive bidding for clean energy generation in the future.

The Ministry is currently in coordination with Asian Development Bank (ADB) & International Finance Corporation (IFC) to discuss their plan for the future.

As part of two day consultation meetings for finalization of Pakistan’s New Draft Alternative & Renewable Energy Policy 2019, the second session of consultative meetings with private sector stakeholders and multilateral donor agencies was held at Alternative Energy Development Board (AEDB) on August 25, 2019.

Participants of the meeting also gave their input regarding the draft renewable energy policy. The discussions and inputs received during the consultations will enable AEDB to finalize its draft for placing the same before Federal Cabinet for its approval to place it before Council of Common Interest for its final approval.

Read more about Pakistan’s Renewable Energy Goals at EnergizedPAK

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