Renewable Energy Landscape of Pakistan
What is renewable energy?
According to International Energy Agency (IEA) Energy Manual:
“Renewable energy is energy that is derived from natural processes that are replenished constantly. There are various forms of renewable energy, deriving directly or indirectly from the sun, or from heat generated deep within the earth. They include energy generated from solar¹, wind², biomass, geothermal³, hydro-power⁴ and ocean resources, solid biomass, bio-gas and liquid bio-fuels⁵”
Global trends and Pakistan
With global climate change, renewable energy has come to the forefront of energy choice. According to the recently published Renewable Information Overview 2020 by IEA, renewable sources accounted for 25% of the global electricity production in 2018 only second in line to coal. Of this 25%, the majority of the electricity is produced by hydro-power (about 62%) and the rest is produced by geothermal, solar, wind and tidal. In the overall global electricity generation mix in 2018, hydro-power accounted for 15.8% and the rest of the renewables accounted for 7.2% of world electricity production.⁶ A snapshot for a particular year might suggest that hydro-power is the denominating factor in the global renewable space, however if one looks at the trend over the last three decades the share of hydro-power in global electricity production has gone down from 18.1% in 1990 to 15.8% in 2018 and the share of other renewable sources especially solar and wind has risen 8 fold (from 1.3% in the 1990 to 9.3% in 2018). So the global trend in electricity production is clear.
Given this, it is not surprising that Pakistan is also following suit and aims to increase its share of renewable energy by 20% in the next five years and by 30% in the next 10 years as outlined in the newly approved policy for alternative and renewable energy in August 2020.⁷ The potential for renewable energy in Pakistan is enormous and widely spread across the entire country.⁸ Given the current predicaments of the power sector, it seems only logical that Pakistan wants to make use of its renewable potential to expand its generation capacity. At present the share of renewable energy (minus hydro-power) stands at 5%.⁹ The electricity generation mix for Pakistan over the last 30 years is shown in the graph below, with the majority of the electricity needs being met by fossil fuels (natural gas and oil) with the share of coal rising since 2016. Other than hydro, renewable energy has only come into focus very recently.
Pakistan’s target of increasing the share of other renewable (excluding hydro) by four times in the next 5 years looks ambitious but it is definitely doable. Countries have done it in the past and are still doing it by achieving almost 100% of their electricity needs from renewable sources.
Case of Uruguay
The International Renewable Energy Agency (IRENA) recently acknowledged Uruguay’s case whereby it has achieved almost 98% of its power from renewable in a course of a decade.¹⁰ Twenty years ago it was a different story as shown in the graph below:
Uruguay had been managing its electricity needs mainly from hydro-power and oil thorough out, with dips in hydro-power managed by increased generation from oil in the last 20 years. Since 2012 the share of oil has been steadily declining and renewables have taken the lead.
This has been mainly due to an adoption of a comprehensive long-term energy plan which resulted in the National Energy Policy 2005 -2030. The plan which started in 2005 was open for discussion till 2007 and was formulated into a national policy in 2008. In 2010 all major political parties were on board and since then the wheels have turned. The objectives Uruguay wanted to achieve are also the objectives that Pakistan wants to achieve today i.e. “... diversify the energy mix, reduce dependency from fossil fuels, improve energy efficiency, and increase the use of endogenous resources, mostly renewables.”¹¹ In Uruguay’s case there have been at least 16 policy interventions since 2008 — according to IEA website — most of which address various aspects of renewable energy¹². As a result of this power policy — highly tilted in the favor of renewables — the country was able to attract $ 7 billion in the field of energy mainly renewables by 2015. The government provided the right ingredients and the ground was set to boost investor confidence. As Ramón Méndez, the former national director of energy for Uruguay puts it “... the key to success is rather dull but encouragingly replicable: clear decision-making, a supportive regulatory environment and a strong partnership between the public and private sector… What we’ve learned is that renewables is just a financial business. The construction and maintenance costs are low, so as long as you give investors a secure environment, it is a very attractive.”¹³
Case of Pakistan
As stated earlier Pakistan aims to have 20% of its generation from renewable by 2020 and 30% by 2030 in order to have a sustainable and affordable power generation mix. The recently approved policy document for Renewable Energy is not publicly available at the moment but a draft from 2019 and recent newspaper reports suggests that there are several steps in the right direction — at least on paper. Competitive bidding/auctions will be introduced for renewable projects as opposed to the prevalent methodologies of up-front tariff or cost-plus tariff methodologies. Auctions have been a known instrument to reveal the real price of the technology provided there are sufficient competitors. In addition to this, the decision of how much power to procure under which technology as well as the location of a particular power plant will be decided in a coordinated effort by all provinces along with the federal government.¹⁴ Worthwhile investment will be coming in mainly from Chinese companies who are willing to set up their manufacturing plants to subsequently localize the equipment needed for solar and wind power generation.¹⁵
However there are still some missing links which have not been highlighted in the policy discussion as much as they should have been — mainly the status of grid investment planned for this kind of power generation coming in. Wind power is mainly clustered in the Gharo and Jhimpir areas in the south of the country. The wind power plants located there have already been complaining of frequent disruption because of weak grid infrastructure.¹⁶ The status quo continued in 2019 where the transmission system constraints were mainly coming from the National Transmission Dispatch Company’s (NTDC) southern network “resulting in power dispersal issues from 1,320 MW Port Qasim Power Plant and Wind Power Plants situated at Jhimpir and Gharo”(NEPRA State of Industry Report 2019). According to IRENA’s Renewable Readiness Assessment for Pakistan 2018, grid planning and extensive infrastructure improvement is needed for such kind of clusters but NTDC has limited financial resources which are not even sufficient to evacuate the planned renewable power of 9400 MW by 2022.
Whether these stated targets for renewable energy fit in the overall plan for the power sector is another story.
There have been several Integrated Energy Plans in Pakistan: one in 2009 constituted by Economic Advisory Council and Ministry of Finance and another one in 2011 with the technical assistance of ADB.¹⁷ Recently there has been an Indicative Generation Capacity Expansion Plan (IGCEP) 2018–2040, now updated to 2047 which will become part of the upcoming Integrated Energy Plan according to the Economic Survey of Pakistan (2019–2020) but none of these plans has been adopted as a comprehensive national power policy which can formalize the priorities of the government for the entire spectrum of the power sector.
In fact, despite the claims that government wants to move towards cleaner and affordable electricity, the ground reality is that it continues to approve and build coal power projects under CPEC.¹⁸ Latest assessment of the IGCEP 2047 by IEEFA suggests that the generation expansion plan is in stark contrast to the stated objectives by the government of sustainability and affordability.¹⁹According to the analysis, generation planning is based on highly optimistic demand growth projections and even then, the generation expansion direction is such that it favors fossil fuels, mainly domestic coal, over renewable which will be far cheaper by 2047. In fact there is no planned wind power projects after 2030 and by 2047 the generation share for renewable will fall from 31% in 2030 to 23% in 2047.²⁰ The Generation Expansion plans aims to add 20,000 MW of LNG based power capacity between 2030 and 2047 with no utilization by 2047. The IEEFA report takes notes — and rightly so — of this addition as follows: “The idea that a total 31,000MW of LNG-fired power is needed to balance the intermittency of 37,000MW of wind and solar power in 2047 is, at best, wildly inaccurate, especially given how cheap energy storage solutions will be by that time. In reality, tens of thousands of megawatts of LNG-fired power would be built at great cost and would then sit idle and stranded...”²¹
These contradictions just suggest that Pakistan is still in haze as to what it wants to achieve from the stated policy goals which are not even rightly reflected in the policies which come after years of slumber. Even though the principle of clear vision is “dull and simple” but it seems that we can’t even replicate it and might even have a repeat telecast of the 90s’ excess generation capacity disaster — this time in coal and gas rather than oil.
¹ “Solar radiation exploited for hot water production and electricity generation, by: 1. Flat plate collectors, mainly of the thermo-syphon type, for domestic hot water or for the seasonal heating of swimming pools; 2.Photovoltaic cells; 3.Solar thermal electric plants.” IEA Energy Manual
² “Wind energy: Kinetic energy of wind exploited for electricity generation in wind turbines.” IEA Energy Manual
³ “Geothermal energy: Energy available as heat emitted from within the earth’s crust, usually in the form of hot water or steam. It is exploited at suitable sites: For electricity generation using dry steam or high enthalpy brine after flashing. Directly as heat for district heating, agriculture, etc” IEA Energy Manual
⁴ Hydro Power: Potential and kinetic energy of water converted into electricity in hydroelectric plants
⁵ Energy Statistics Manual, IEA 2005
⁶ Renewables Information Overview 2020, International Energy Agency Publication
⁷ “Alternative energy policy unveiled” by Khaleeq Kiani Dawn Aug 2020
⁸ Renewable Readiness Assessment Pakistan -IRENA 2018
⁹ “Alternative energy policy unveiled” by Khaleeq Kiani Dawn 13 Aug 2020
¹⁰ “Meet the Permanent Representative of Uruguay to IRENA” — IRENA, 30 Aug 2020
¹¹ Renewable Energy Policy Brief,Uruguay, Irena https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2015/IRENA_RE_Latin_America_Policies/IRENA_RE_Latin_America_Policies_2015_Country_Uruguay.pdf?la=en&hash=A76CA561F1B9FE54B25756097F5A55D20ED8EB33
¹²https://www.iea.org/policies?country=Uruguay
¹³Uruguay makes dramatic shift to nearly 95% electricity from clean energy- Guardian- 03 Dec 2015 https://www.theguardian.com/environment/2015/dec/03/uruguay-makes-dramatic-shift-to-nearly-95-clean-energy
¹⁴“Alternative energy policy unveiled” by Khaleeq Kiani Dawn 13 Aug 2020
¹⁵ ibid
¹⁶ Renewable Readiness Assessment Pakistan -IRENA 2018
¹⁷ ibid
¹⁸ “Pakistan pushes renewables — but coal expansion continues too” by Rina Saeed Khan- Reuters-
¹⁹ “Pakistan Risks Locking in Long-Term Overcapacity and Expensive Power- Imported Coal and LNG Power Plants Are Stranded According to New Power Plan” by Simon Nicholas, IEEFA, 03 Sept 2020
²⁰ ibid
²¹ ibid
