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Category: Renewable Energy

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Japan to Discuss Investment in Pakistan’s Energy Sector

Japan to Discuss Investment in Pakistan's Energy Sector

Senior representatives from the Government of Pakistan (GOP) will be going to a conference in Japan on 24th September 2019 to discuss Japan’s interest in investing in Pakistan’s Energy Sector. This action taken by the GOP is based on its 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.

National Transmission and Despatch Company (NTDC) in consultation with public and private sector agencies and consultants have prepared an 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 to 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 to 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 to increase generation capacity to 110,000 megawatts to generate 630,500 gigawatt-hour.

Click GOP’s plans to improve the energy sector by 300 percent to read the details

Pakistan’s Energy History with Japan

Japan to Discuss Investment in Pakistan's Energy Sector - Japan

Pakistan’s energy history with Japan dates back to 1977. Japan has been assisting Pakistan in both energy generation projects and transmission infrastructure. Below you will find an overview of Japan’s support to Pakistan in the energy sector.

1992-1994: Bin Qasim Thermal Power Station Extension Project.

In order to meet the increasing demand for electricity, Japan provided Pakistan’s local distribution company (Karachi Electric Supply Company – KESC) with a loan worth Japanese Yen (JPY) 15.3 billion to install and develop Bin Qasim thermal power station which is located in Karachi. This lead to an addition of 410 megawatts to the total energy mix. 

1996-1997: Ghazi Barotha Hydro Power Project.

For this project, Japan provided Pakistan a loan of JPY 35 billion to construct a renewable energy complex (Hydro) and a barrage with a channel of 52 kilometers (km). This lead to an addition of 1450 megawatts to the total energy mix.

2005: Load Dispatch System Upgrade Project.

2006: Dadu-Khuzdar Transmission System Project

2008: Punjab Transmission Lines and Grid Stations Project

2010: NTDC Grid Station Strengthening Project

Pakistan received a loan worth JPY 42.78 billion to construct additional facilities of transmission lines and grid stations with the aim to reduce power shortage and transmission loss.

2010: Renewable Energy (Solar Energy) Project

For this project, Japan provided Pakistan with a grant worth JPY 480 million to replace outdated fossil fuel generation units with renewable energy power plants. The grant was also used to develop and implement the climate change policy of Pakistan.

By setting up of solar energy panels in the Ministry of Planniing Commission and Pakistan Engineering Council in Islamabad, this project promoted awareness and clean energy utilization.

Japan to Discuss Investment in Pakistan's Energy Sector - Pakistan
Japan to Discuss Investment in Pakistan’s Energy Sector

Mr. Omar Ayub Khan (Federal Minister of Energy) in a meeting with Japanese Ambassador Kuninori Matsuda on 17th September stated.

“Keeping in view the interest shown by the Japanese investors and companies in the energy sector of Pakistan, I will personally lead the Pakistani delegation at the conference.”

The minister emphasized on the making of an updated and new ‘renewable energy policy’ which will make renewable and alternative energy a major contributor in the total energy mix. The policy stands to give a lot of benefits to investors and consumers.

You can read the goals of the draft renewable energy policy by clicking here.

The Japanese Ambassador thanked Mr. Omar Ayub Khan for his personal intervention and said that Japan and Pakistan have close ties and Japanese companies are looking forward to Pakistan’s visit.

Conclusion

This is good news for both countries but Pakistan needs to be clear on what is really required. Pakistan faces a supply-demand parity, lack of rural electrification due to a low transmission and distribution network and grid proximity (70% of Pakistan is rural and overall grid connectivity stands at 42% to date), high cost of well-to-consumer for several reasons (dilapidated development infrastructure, shortage of investment, lack of essential resources, security, etc), rising fuel import bill and shortage of fuel transport civil linkages. 

Keeping this aspect in mind, Developing infrastructure is what’s required. Providing basic utilities to each and every citizen should be the ultimate goal and Pakistan has plenty of renewable energy resources to meet that goal. We all hope this meeting brings forth mutual benefit to both countries. 

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Historical Year (2019) for Renewable Energy As It Overtakes Coal in USA

2019 has been a historical year for the renewable energy sector as energy generation through renewables has surpassed energy generation from coal-fired power plants. In 2008, coal was the major contributor in USA’s energy generation mix, but since then, it has been reduced to 39 percent, the lowest level in 40 years. 

The future of USA’s energy generation industry is renewable energy according to a recent report published by the Institute For Energy Economics and Financial Analysis  (IEEFA). The report does not present an encouraging pictures for the struggling coal-fired energy generation industry.

Coal, which had a greater energy generation mix in USA had first been overtaken by Natural Gas in 2016, a relatively cleaner fossil fuel, now has succumbed by renewable energy mostly through wind and solar power.

According to a Federal Energy Regulatory Commission (FERC) report,  renewable energy sector has slightly more installed capacity than coal. The report also states that the total available installed energy generation capacity of coal remained at 257.48 gigawatts while renewable energy generation capacity climbed to 257.53 gigawatts.

The FERC report indicates that the analysis carried out has not taken the actual amount of power generated, instead it has measured capacity. An important factor to know about renewable energy is that it has a relatively lower capacity utilization than other conventional fuel sources. 

While looking at the energy sector, no new coal-fired energy generation plants were commissioned in the energy mix this year, while more than 3,000 megawatts renewable energy units were installed, comprising of 1,473 megawatts solar energy and 1,545 megawatts wind energy units.

This breakthrough is due to lower investment cost of renewable energy technology specially solar and wind energy products. Another main factor is also due to the growing concern of global warming and climate change. 

According to sources,

“We’re going to eventually see renewables surpass coal across the country.” –  Mathew Hoza of BTU Analytics

“Coal has no technology path. It’s got nowhere to go but extinction.” – Jeff McDermott of Greentech Capital Advisors

2019 Marks A Revolutionary Year for The Renewable Energy Sector As It Overtakes Coal in USA

USA has finally cut back on conventional fossil fuels specially coal despite updates provided by President Donald Trump encouraging coal in The Paris Agreement on Climate Change. Most Americans care about the environment and are supporting renewable energy. Now the its the government who has to decide either it should be reluctant or it should follow the needs of the public by accelerating and encouraging the renewable energy (clean) movement to progress rapidly. 

Rising demand of solar and wind energy

Energy produced through coal-fired plants face the problem of economics. Huge costs are involved in the coal based projects which include installation, managing the coal supply chain and operations and maintenance costs. With this perspective in mind more and more investors are shifting towards renewable energy. 

An average age of a coal-fired energy generating plant is about 40 years and according to experts coal-fired plants are phased out after 60 years. With each passing year these plants require more and more maintenance and constant equipment up-gradation. This to an average investor does not look like a lucrative deal. According to Energy Innovation, 74% of USA’s coal industry could be replaced by renewable energy if the U.S government encourages investors. 

According to Electric Reliability Council of Texas (ERCOT), the transmission operator running the system that supplies 90% of Texas electric load, wind and solar generation topped coal’s output in the first quarter of 2019, the first time that this has happened on a quarterly basis. Overall, wind and solar energy capacity generated 19.41 million megawatt-hour during the first quarter, beating the 18.97 million megawatt-hour pumped out by the state’s coal-fired plants.

Renewable Energy in American Politics

Renewable Energy in American Politics

Looking at President Trump’s statements and the stance of the Democratic party regarding climate change and renewable energy, seemingly indicates a rift between policies. But is the renewable energy transition actually a political struggle? Are efforts to shift from fossil fuels mainly due to economic reasons or has the renewable energy lobby in Washington grown stronger. 

According to a 2016 study by the Pew Research Center, it was found that 83 percent of conservative Republicans and 97 percent of liberal Democrats support solar energy farms. With the growing support for the renewable energy sector across the U.S, Conservative states are also as likely to support renewable energy and energy efficiency policies as liberal states, according to a 2016 study led by researchers at Vanderbilt University.

Support for renewable energy among Democrats largely stems from environmental concerns but reasoning behind Republicans’ support is less well understood.

Several surveys and interviews have been conducted by major companies to better understand the support for renewable energy among both conservatives and liberals. Among them, Horne and Kennedy conducted in-person interviews at the homes of 64 registered Democrats and Republicans across Washington state.

It was found that among conservatives, renewable energy is viewed as a financially viable option and an efficient way to use resources.  

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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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Top 10 Goals of Pakistan’s Renewable Energy Policy.

What are the goals of Pakistan’s renewable energy policy (2019) and how they will effect the country? This article provides a basic understanding on how these goals are part and parcel of Pakistan’s draft energy policy (2019).

Pakistan’s renewable energy policy goals 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 RE 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.

Although a new draft of the Renewable Energy policy is being prepared, this article lists 10 important goals of which are part of Pakistan’s Renewable Energy Policy.

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.

Renewable Energy

Renewable Energy

Photo by Mariana Proença on Unsplash

10 Goals of Pakistan’s Renewable Energy Policy

Below, we will briefly discuss 10 important goals you need to know about Pakistan’s Renewable Energy (RE) policy 2019.

SUSTAINED AND SYSTEMATIC DEVELOPMENT

The policy needs to create harmony and should be focused to achieve sustained and systematic deployment and growth of renewable energy technologies (RET) through improved federal and provincial coordination.

IMPROVED STRATEGIC OBJECTIVES

The policy should improve strategic objectives of energy security, economic benefits, environmental protection, sustainable growth, social equity, and gender mainstreaming. 

DEVELOPMENT OF ELECTRICAL POWER SYSTEM

Sustainable development of electrical power system which will be technically sound, financially viable and socioeconomically affordable.

REDUCED CARBON EMISSIONS

Promote clean energy for power generation  and environmentally sustainable development.

IMPROVED ENERGY SECURITY

The policy intends to improve energy security by including incentives and checks between national security and the availability of natural resources for energy consumption.

HIGHER ENERGY MIX

The renewable energy policy helps to increase a higher proportion of clean energy in the national energy mix and ensures complete access of electricity in all regions of the country.

IMPROVE INVESTOR FRIENDLY ENVIRONMENT

Introduce and maintain investor-friendly benefits and incentives to encourage private sector participation and investment in renewable energy projects with a view, among others, to lower renewable energy costs and prices through competition.

SUPPORTING PRIVATE SECTOR

Devise measures to support private sector in mobilizing financing and enabling public sector investment in the promotion and development of renewable energy projects.

INCREASED CAPACITY BUILDING

The policy encourages employment of renewable energy technologies in off-grid and general households by displacing their dependence upon conventional with renewable energy sources.

Facilitate in the establishment of domestic renewable energy products manufacturing to lower costs, improve service, create employment and enhance local technical skills without in any way impeding or discouraging foreign investment or collaboration.

Assist in the institutional, technical and operational capacity building of all parties involved in the renewable energy sector, including development of prototype contractual framework and business models.

POVERTY ALLEVIATION AND IMPROVED LIVELIHOOD

By giving special attention to the diverse energy needs of local communities, the Government of Pakistan intends to boost the livelihood of people living in underdeveloped areas through optimized renewable energy technologies.

Optimized solutions will help the people generate income through productive means thereby decreasing poverty and increasing the living standards.

CONCLUSION

We hope that the goals of the upcoming renewable energy policy (2019) are implemented in their true essence for the betterment of the people of Pakistan. 

Read our detailed article on  top 5 updates on Pakistan’s Renewable Energy Sector.

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