Daily Times

How green was our valley once and how green would we be able to keep it is the biggest dilemma facing Pakistan in this time of energy scarcity.

A nation that does not want to build the most feasible dams due to political differences and relies mostly on fossil fuel imports for its energy needs is surely on its way to financial as well as environmental degradation.

Our geographical as well as financial valleys would turn red from green pretty soon if we do not follow what the rest of the world is following. The main challenge to our economy and ecology emanates from a lemming like death wish to stumble pellmell into an unsustainable energy mix relying mostly on imported fossil fuels.

Despite nature’s bountiful endowment to us in the shape of rivers full of water and plentiful wind as well as solar potential, we still generate over 70 per cent of our electricity out of imported furnace oil, liquefied natural gas and refined petroleum products.

While the world has started embracing clean energy in the shape of wind, biogases, solar, geothermal, ocean, and hydropower, we are stuck in the old groove of thermal dependence.

Is our fetish with the thermal power generation economically and environmentally sustainable? Instead of going for an enhanced percentage of renewable sources like wind and solar, frequent changes in our energy policies are discouraging their development.

Our power planning and regulation mechanism comprising ministry of energy, NEPRA, NTDC, PPIB, AEDB and CPPGA is a product of slow evolution wherein we made a transition from public sector to a diversified power portfolio comprising private sector run Independent Power Producers (IPPs).

While NEPRA and Alternative Energy Development Board (AEDB) initially followed the global currents encouraging investments in wind and solar energy on attractive terms, the tide is being reversed recently without achieving the desired objectives.

The failure to develop an efficient electricity evacuation grid is depriving the nation of the potential of renewable energy. Instead of addressing the core issues, regulatory strictures like withholding of capacity charges and removal of investor friendly ‘take or pay’ mechanism are being imposed that would certainly discourage further investment in the nascent renewable sector.

A new sector like wind and solar power generation should ideally be incentivised through investor friendly policies for initial five to 10 years. If we exclude hydroelectric source from the renewable sources, then the present share of wind, solar and biogas is less than three percent in our energy mix. Compared to us, our neighbour India that established a special Ministry of New and Renewable Energy (MNRE) in 1980s has 57.42 GwH of renewable energy. 60 per cent of the renewable energy in India comprises wind and 19 percent of solar sources. Renewable power sources are planned to grow substantially by 2022, including a doubling of India’s large wind power capacity and a 15 fold increase in solar power from April 2016 levels. India plans ultimately to meet 40 per cent of its electricity requirements from non fossil fuel sources by 2030.

There is no authentic national energy mix road map for power generation in Pakistan, as we follow a desultorily-planned approach offering incentives and then removing them without achieving the desired objectives

Compared to above, do we have an energy road map and a concomitant incentive structure? The answer is no. There is no authentic national energy mix road map for power generation as we follow a desultorily planned approach offering incentives and then removing those without achieving the desired objectives. The case in point is the recent media reports that disseminated Ministry of Energy’s new policy directives pertaining to wind and solar power projects.

As per the press statements, the government has done away with upfront tariff for all future wind and solar projects and introduced competitive bidding for generation licenses. Along with that, the capacity payments for all IPPs in solar and wind projects would be discontinued and a ‘take and pay’ electricity selling procedure introduced instead of an investor friendly ‘take or pay’ mechanism.

Now everyone knows that wind and solar are not base loads and the government cannot base its power consumption policy on such variable loads. But then, it is also a reality that the wind and solar are two cheapest sources with no dependence on costly imported fossil fuel.

Pakistan needs investor-friendly policies that are attractive enough to woo investors in wind and solar power projects. These two sources that can play a vital part in the sharing of national power load, providing one of the cheapest energy options for end consumers, need stable policy regime.

The constant shifting of goal posts by the energy ministry on the policy front is not the right way to encourage renewable energy generation in the country. The doing away of the capacity factor payments when the wind and solar plants lie idle due to government’s inability to evacuate the electricity is going to sound the death knell of the nascent wind and solar power industry. The IPPs investing in wind and solar would be hardest hit by removal of the take or pay clause. The government’s insensitivity to the investors would most certainly discourage any further investment in renewable sector at a time when the country needs these the most.

Let us take a look at where the world is going on renewable front compared to our ambivalent policy planning. The United Nations Framework on Climate Change (UNFCC) in its concluding conference of parties (COP 22) in November 2016 primarily focused on clean power generation. Over 60 per cent of the new global addition in energy in 2016 comprised renewable energy.

The year also saw major improvements in technology that brought down the costs appreciably. The advancements in wind turbine materials, design and maintenance have resulted in reduction of Engineering, Procurement, and Construction (EPC) costs resulting in further reduction in overall project costs. The same goes for solar in the fields of photovoltaic cell manufacturing and cell module design.

Presently, the 37.6 per cent, 27 per cent, 24 per cent 19.7 per cent and 10.5 per cent of the electricity demand of Denmark, Ireland, Portugal, Cypress, and Costa Rica respectively is met through wind energy. For solar, the similar figures are 8 per cent for Honduras, 7.2 per cent for Greece, and 6.4 per cent for Germany. For short periods, some countries managed to integrate very high level of variable renewable energy as shares of total demand in 2016.

The examples include 140 per cent for Denmark and 106 per cent for Scotland. Pakistan’s present wind farms providing electricity to national grid are to the tune of 595 MW and with the projects in pipeline the capacity would be enhanced to over 1200 MW. For solar projects, the same figure is 956 MW and it is evident that both the wind and the solar constitute a minuscule percentage of our total installed capacity of 25100 MW.

The above clearly indicates where the world is going and where we are headed. On top of that, we do not have enabling policies and environment to make desired progress on renewable energy front. What the country desperately needs is a clear national energy mix road map with the right incentives for the investors in wind and solar energy. The cost of electricity can be brought down appreciably if we integrate cheap wind and solar energy in our base load and improve national power evacuation grid which presently presents the biggest hurdle to resolution of our energy crisis. Our problem is not of generation capacity but of the right mix of power generation sources for cheap electricity along with an efficient evacuation system to minimise losses. The sooner it is done, the better.

The writer is a PhD scholar at NUST; email rwjanj@hotmail.com

Published in Daily Times, December 18^th 2017.