Mahnoor ARSHAD^

Abstract. The economic stability of a country has a strong correlation with the performance of its energy sector. The more energy a country generates, the more economic growth it can achieve. Pakistan is a country that was severely hit by the prolonged energy crisis, which ultimately impacted its economy. This study, on the one hand, analyzes the causes of energy crisis while on the other, it casts light on the alternative / renewable sources of energy that Pakistan has adopted in order to overcome the challenge and bridge the gap between demand and supply. Future plans and existing frameworks drafted by the policy makers have also been discussed in the study, which shows the willingness of Pakistan to shift towards renewable energy technologies. The study anticipates the success of renewable energy in the coming years and also hopes to spark the interest of local as well as foreign investors to invest in the energy sector of Pakistan.

INTRODUCTION

Renewable energy is fast replacing non-renewable energy resources in the world. According to the ‘2019 Annual Renewable Capacity Statistics’ of International Renewable Energy Agency (IRENA), the total installed renewable energy capacity of the world had increased from 1,136,226 MW in 2009 to 2,350,755 MW in 2018¹. Pakistan too has shown a major shift towards renewable energy in the recent years due to a number of factors such as the effects of climate change, the energy demand-supply gap causing long-hour load-shedding, and rural areas having no connectivity with the grids and thus having no electricity.

From 1997 to 2016, Pakistan, according to The Global Climate Risk Index 2018, remained 7^th on the list of most-affected countries². The Fifth Assessment Report (AR5) of Intergovernmental Panel on Climate Change (IPCC) states that in South Asia, warming above the global mean is bound to affect the glaciers’ melting rate and precipitation patterns (timing and strength of monsoon rainfall in particular), which will, in turn, impact the productivity and efficiency of water-dependent sectors such as agriculture and energy³. The impact of climate change on energy sector includes less reliability on hydroelectric power supplies due to reduction in water sources, less effi-ciency of fossil fuel and nuclear power plants due to less quantity and high temperature of water during hot weather conditions, and extra maintenance required for transmission and distribution systems due to natural disasters in the wake of climate change such as windstorms and floods⁴. In order to overcome these challenges, Pakistan is keenly looking towards alternatives and more viable options for energy generation, which is also one of the functions assigned to Pakistan Climate Change Authority⁵.

Today, energy is highly important for the agricultural, industrial, as well as domestic purposes alike. Currently, the main sources of energy in Pakistan are the thermal and hydropower generation. The recent energy shortfall coupled with its increasing demands by the ever-growing industry, agriculture and households not only resulted in frequent load-shedding but also hindered economic progress significantly. Rising prices of electricity have made access to affordable energy a rarity for many in Pakistan⁶. In order to overcome this challenge, Pakistan is looking towards and has adopted alternate sources of energy. If one takes an example from the agricultural sector alone, farmers, who had been heavily dependent on the electric tube wells, were now introduced to alternate sources of energy (such as diesel, solar photovoltaics and biogas) to power their water pumps. According to a survey in which 950 farmers were interviewed, 11% to 20% of the households that had adopted these alternate sources had been able to lower their poverty level. In addition, the productivity level of major cereal crops such as wheat, rice, and maize also increased significantly⁷.

In 2014, 35% population of the country was deprived of electricity due to no access to grids whereas in 2016, it was estimated as 26%⁸. Rural areas having no access to the grids may also adopt innovative solutions in order to ensure electricity there. Great interest is being shown in rural electrification through decentralized control architecture and net metering systems are becoming widespread⁹.

This paper aims to highlight:

1. the current status of renewable sources in the energy sector of Pakistan,

2. how Pakistan has come a long way when it comes to adoption of alternative energy resources,

3. future plans involving renewable energy, and

4. the policies that will shape the status of renewables and thereby improve the economy

Another important issue to be discussed in this paper is that renewable energy sector is expected to attract a significant investment in the country.

CURRENT STATUS OF RENEWABLE ENERGY TECHNOLOGIES
IN PAKISTAN

The need for renewable energy resources has grown in Pakistan over the years. In 2009, the total renewable energy production was 6,929 MW, which increased to 13,049 MW in 2018¹⁰. In addition to this, the off-grid capacity increased from 5.750 MW in 2009 to 27.853 MW in 2018¹¹. These statistics show a considerable improvement in the status of renewable energy technologies implementation. A study conducted by Sustainable Development Policy Institute (SDPI) highlights various investments that have been made in the energy sector of Pakistan. One such example is a funding of $86.61 million by the Government of France to establish two hydro power projects¹². A deeper insight of the various renewable energy technologies prevalent in Pakistan and the status of their implementation and adaptation paint a clearer picture.

Hydro Energy

As of June 2019, the total installed capacity of total hydropower plants was 9,473.25 MW out of a total installed national capacity of 34,916 MW¹³. This equates to nearly 30% of the total electricity generation of Pakistan. According to a report titled: “2019: Hydropower Status Report – Sector Trends and Insights”, released by the International Hydropower Association, Pakistan has been ranked 3rd in the world for newly-installed hydropower capacity¹⁴. It further states that Pakistan managed to add 2,487 MW of environment-friendly hydel electricity in 2018 through the successful completion of three mega hydel projects, China being ranked at number 1 for having added 8,540 MW followed by Brazil with an addition of 3,866 MW¹⁵. Pakistan has a potential for 50,000 MW of hydro power, most of which is still waiting to be explored¹⁶.

Solar Photovoltaic Energy

Solar Energy projects (both small and large-scale) are increasingly becoming widespread in Pakistan, especially in areas that are off-grid. The first on grid solar power plant of about 178 kW, namely Quaid-e-Azam Solar Park, was commissioned in 2010 and inaugurated in 2012. The plant has net metering facility through which the surplus energy is being sold to Islamabad Electric Supply Company¹⁷. Following the completion of this plant, construction of solar power projects has gained momentum and reached an installed capacity of 400 MW out of a total national installed capacity of 34,916 MW in June 2019¹⁸. Distributed generation has given rise to the active use of net metering system, an example of which is the 2 MW solar powered system installed at the National Assembly of Pakistan, which fulfils the assembly’s electricity needs and then dispatches the surplus to the national grid¹⁹.

Wind Energy

Wind energy has immense potential in Pakistan especially along the coastal lines of Balochistan and Sindh provinces. The first wind power project was installed by Fauji Fertilizer Company Energy Limited in 2013²⁰. Since then, a number of projects have been installed and with them the capacity of wind energy plants reached 1,333.3 MW by June 2019²¹.

Bagasse

There are about 83 sugar mills in the country that have the potential to produce about 3,000 MW electricity. Out of these, currently four industries have installed power plants operational on bagasse extracted from sugar cane crushing and amount to a total capacity of 145.1 MW²².

Biogas

Under various projects, 4,500 biogas plants have so far been installed in different areas of Pakistan. Apart from this, the PC-1 project was also approved in which a target of 1,200 biogas plants was fixed, but 400 more plants than the target had been installed by 2006²³. Since then, the installation of biogas plants has gained momentum and has become quite widespread. Another example of a relevant project is the installation of a 1,200 m³ biogas plant by Revgreen Pakistan at Starlet Shoes Sheikhupura Road which fulfils the requirements of the industry²⁴.

An overview of various renewable energy resources adopted by Pakistan show that considerable progress has been made over the years, but there is more to follow. Table 1²⁵ shows in detail the renewable energy projects that have been successfully installed in Pakistan.

Table 1. Existing Installed Capacity of Renewable Energy Projects in Pakistan till June 2018

Source: Government of Pakistan Ministry of Planning Development and Reform Annual Plan 2019-20. Available [online]: https://www.pc.gov.pk/uploads/annualplan/AnnualPlan2019-20.pdf

Table 1 shows the immense progress Pakistan has made where the only renewable energy generation was hydel and even biogas to an extent initially, but over time it has been ensured that other renewable energy resources are also adopted in the country.

OUTLOOK FOR THE FUTURE

Despite having made considerable advancement when it comes to the exploit-tation of renewable energy resources for a better economy and stable energy sector, Pakistan still has a long way to go and is making all necessary efforts to achieve sus-tainable and environment-friendly energy generation systems through planned projects, policy frameworks as well as research and development work done by various institutions.

According to the Annual Plan 2019-2020 presented by the Ministry of Planning, Development, and Reform, Table 2²⁶ lists down all future projects that are due to be completed by 2020. A vast majority of hydel power projects are due to be completed by 2020 followed by a number of bagasse powered plants. Pakistan has immense potential for renewable energy resources and is doing so with great persistence.

There are a number of policy frameworks in Pakistan that have also pressed upon the importance of promoting renewable energy resources. The Economic Survey 2018-19 highlights how the government is trying to ensure the availability and security of sustainable energy services to attract local and foreign investment in the energy sector. The Indicative Generation Capacity Expansion Plan (IGCEP) 2018-40 mentioned in the Survey also talks about shift from thermal power generation to renewables and nuclear power. A considerable amount of taxpayers’ money is spent on the subsidy of 30,000 tube wells in Balochistan. Therefore, in order to ease the burden on the tax-payers, a feasibility study is being carried out to explore the prospects of adopting solar tube wells²⁷. Among various incentives being offered in order to encourage the use of renewable energy technologies, the State Bank of Pakistan’s Financing Scheme for Renew–able Energy was also revised in June 2016 for sponsors desirous of setting up renewable energy power projects as well as consumers willing to install these facilities²⁸.

Various donor-funded projects in energy sector are due to be completed in the coming years. Pakistan is one of the 120 countries committed to achieving the objectives set under the Sustainable Energy for All (SE4All) initiative of the United Nations. As part of a project by United Nations Development Program (UNDP) for achieving these objectives, Alternative Energy Development Board (AEDB) has been assigned the task to add 9,700 MW to the national grid by 2030 out of which 1,200 MW of renewable energy has been added²⁹. The Central Asia Regional Economic Cooperation (CAREC) Program financially supported by six funding bodies (such as Asian Development Bank) has been able to provide $29.4 billion for transport, energy, and trade sectors of various countries, including Pakistan³⁰. Among a number of other investments, USAID has recently committed $43 million for the upgradation of the country’s transmission system as well as construction along the Gharo-Keti Bandar wind corridor³¹.

Table 2. Renewable Energy Projects Due to be Completed by June 2020

Source: Government of Pakistan Ministry of Planning Development and Reform Annual Plan 2019-20. Available [online]: https://www.pc.gov.pk/uploads/annualplan/AnnualPlan2019-20.pdf

The EU – Pakistan Strategic Engagement Plan also aims to strengthen cooperation in the energy sector. It includes renewable energy generation and exploring possibilities for joint initiatives to work on the Sustainable Energy for All initiative³².

In addition to the work being carried out on the policy level and international collaborations, some of which have been highlighted above, concerted efforts are also being made by various institutions to make the use of renewable energy and awareness relevant to it more widespread. The AEDB was established in 2003 and has had great contribution in promoting and facilitating the use of renewable energy technologies in the country. Pakistan Council for Renewable Energy Technologies (PCRET) and Center for Energy Research and Development (CERAD) are also two prominent institutions working on the matter at hand. Research and development centers for renewable energy formed in various universities (including National University of Science and Technology (NUST), Lahore University of Management Sciences (LUMS), and University of Engineering and Technology (UET), Taxila) are also conducting extensive research on relevant topics such as photovoltaic powered vehicles and biofuel technology.

CONCLUSION

Renewable energy has started creating a significant impact on the energy mix plan of Pakistan. Given the situation of completed renewable energy projects, ongoing ones, research work being carried out by organizations as well as policy making, renewable energy technology is bound to become a dominant shareholder in the energy mix of Pakistan. Consequently, not only will affordable and sustainable energy become a commonality in the country and the issue of climate change addressed to a great extent, the economy is also bound to improve manifold and bring prosperity to Pakistan.

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