Pakistan - Renewable EnergyRenewable Energy
Overview
Pakistan’s energy sector remains one of the main obstacles to economic growth. Like other developing countries in the region, Pakistan facing acute energy deficit. It generates its power from an energy mix that includes oil, gas (natural gas and liquefied natural gas, LNG), coal, renewable sources (solar, wind and hydro energy), nuclear, and biomass. Pakistan’s 64% of energy comes from thermal (fossil fuels), 27% from hydro and 9% from renewable and nuclear. Country’s current demand and supply gap stands approximately 2000 MW in peak season as country’s demand has grown at an annual consumption growth rate of under 7 percent. According to International Energy Agency (IEA) estimates, 74 percent of the Pakistani population – around 154 million people – had access to electricity in 2017, whereas, 51 million people do not have access to electricity. In the current scenario, renewable energy (RE) resources can play an important role in closing the deficit. With current government’s tilt towards renewable energy, new energy policy for the next 25 years is in the making. It is envisioned that renewable energy will have 20% - 30% share in the total energy mix, by 2030. Over the last five years, 18 wind power projects of 937MW, six solar power projects of 418MW and six bagasse projects of total 201 MW achieved commercial operations and are providing electricity to the grid.
Alternate Energy Development Board (AEDB)
The GOP, in its efforts to diversify country’s energy mix and utilize untapped generation resources, is prioritizing development of Pakistan’s Alternative/Renewable Energy (ARE). AEDB, started in May 2010, has a development mandate for exploration and implementation of renewable commercial projects, involving both public and private sectors. In addition to AEDB, Pakistan Council of Renewable Energy Technologies (PCRET) has also been acquiring and updating technical expertise for the promotion and mass propagation of Renewable Energy Technologies in the field of solar, micro-hydel, and wind. The main function of PCRET is to develop, acquire, adapt, promote and disseminate renewable energy technologies within Pakistan.
Wind Energy
Pakistan has considerable potential for using wind energy in the coastal belt of Sindh and Baluchistan (in southern Pakistan). The GOP has developed a wind power energy corridor along the southern coastal regions of Sindh and Baluchistan. Wind data, provided by Pakistan’s Meteorological Department, measures Pakistan’s coastal belt at 60km (Gharo-Keti Bandar) and 180km long, with an exploitable potential of 50,000MW of electricity generation through wind turbines. Currently there are 23 private wind projects operating, producing approximately 1250MW. Five additional projects are anticipated to produce approximately 400MW by early next year. These projects offer potential for U.S. companies especially as some of the projects commissioned are using U.S. manufactured turbines.
Biogas
Pakistan produces a large amount of municipal waste (up to 50,000 tons/day) animal waste, and agricultural waste in the form of solid waste, livestock dung, cotton sticks, and rice husk. Converting this waste into energy can generate up to 5,000MW of power.
PCRET has installed 4015 biogas plants with net generation capacity of 17980 million cubic meters per day on a cost-sharing basis with the private sector throughout the country. In addition, the Council has installed 30 commercial size biogas plants ranging from 50-250 million cubic meters by providing technological support and plant designs to end users, which helped generate power for irrigation and domestic consumption.
To promote waste-to-energy generation, the regulator (NEPRA) has issued the first license of a 40 MW waste-to-energy generation plant to a Chinese company. The company plans to construct this plant in central Pakistan, utilizing 2000 tons of solid waste to generate electricity.
Small/Mini/Micro Hydroelectric
Besides large hydro, there are certain prospects of development of small-mini-micro hydro power. Small Hydropower is considered as one of the lucrative options for generation of electricity. This sector is mainly handled by the provincial governments. At present 128 MW of small hydro projects are operational, whereas, projects of 877 MW are under implementation.
Solar
Pakistan has an average of nine and a half hours of sunlight daily. Opportunities are unlimited in this sector but there are challenges. The biggest challenge to an on-grid solution is the unsolidified renewable energy policy and its implementation through an autonomous energy authority. An unpredictable Feed-in-Tariff and challenges to getting an LOI dampens enthusiasm for investment in this sector. However, scalable and off-grid solutions have huge potential. There have been some efforts to install and expand the use of solar energy at the national level. Quaid-e-Azam Solar Park – a photovoltaic power station - was established in 2016 with a designed capacity to generate 1000 MW. However, this project is currently producing only 400 MW with plans to enhance its generation capacity. In addition, 24 solar projects of different scale are producing 550 MW of power.
To support renewable energy in Pakistan, the World Bank has recently committed $100 million for solar energy projects in Sindh. This program would support independent power producers to develop 400 MW of new solar power projects and provide partial grants to private sector firms for the commercial provision of Solar Home Systems to 200,000 households.
With the rising costs of electricity in Pakistan and an unreliable grid supply, more industries and commercial organizations are turning to captive solar solutions. There has been a strong surge in domestic installation of rooftop photovoltaic panels in larger cities. For projects under 1 MW, net metering regulations came into effect in September 2015. This sector is trending toward significant growth soon as the GOP is targeting at least 1 million customers and adding approximately 3000 MW of solar power through net metering.
Bagasse
Millions of tons of biomass, consisting of bagasse, cotton and wheat stalks, rice husk, jute waste, other crop residues, and cow dung, are produced in Pakistan annually. This resource is not being fully utilized. Most of the biomass is used in rural areas as cooking fuel. The use of biomass in the rural sector is also very inefficient because of ineffective cook stoves. Studies are being undertaken to generate biomass-based electric power, primarily from thermal combustion and from biogas digesters. In particular, it has been identified that the bagasse available from sugar mills can be used to generate up to 2,000 MW of electricity. In 2017, regulator has determined feed-in tariffs for new bagasse co-generation plants to sell electricity directly to the grid at U.S. $.06 per Kilowatt Hour for 1-10 years and $.04 per Kilowatt for 11-30 years.
Leading Sub-Sectors
U.S. companies are competing with Chinese and European companies in the renewable energy market. Chinese companies, due to low prices, continue to dominate. However, foreign-owned portion of the local renewable energy power generation market offers significant opportunities to U.S. companies.
Opportunities
The most promising sub-sectors within this sector are:
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Solar Panels / Photovoltaic Panels
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Dry Batteries
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Inverters
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Wind Farm Equipment (especially turbines)
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Biomass Boilers
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Transmission Equipment
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Distribution Equipment
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Biogas Equipment
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Technical Consultancy