Renewable Energy Will Mitigate Load-Shedding & Costly Electricity: ex-Finance Minister

Former Finance Minister, Dr. Shamshad Akhtar, criticized insufficient financial cooperation extended by leading greenhouse gas emitters to climate change vulnerable countries.

She said, “Climate change mitigation and adaptation annually requires Rs. 7-14 billion, which is well beyond Pakistan’s financial constraints.” She was speaking at the first “Annual State of Renewables Conference 2022” organized by the Sustainable Development Policy Institute (SDPI) in collaboration with Unilever, GIZ, NEST & Energy Update in Karachi.

Shamshad stressed the need to decarbonize energy generation and reform policies to address high import dependence, removing low tariffs and subsidies on energy supply to power plants and industries to reduce financial and environmental implications.

She mentioned that the banking regulator rolled out the scheme for promoting Solar power plants through a financing scheme of a 6 percent markup/profit rate, ultimately, 1,700 power plants were planned at the cost of Rs. 94 billion for the planned electricity of 1,600 MW.

Pakistan is importing renewable power plants over 90 percent from China, but manufacturing plants should be set up in the near future to build local industry, she further said.

Renewable energy is being focused in Pakistan and worldwide, which could generate electricity at comparatively affordable rates and engender benefits to the masses if the capacity is increased up to 20-30 percent of the overall local demand.

Executive Director, SDPI, Dr. Abid Qaiyum Suleri, called public and private sector and civil society organizations to collaborate on concerted actions for climate change mitigation. He stressed pacing up the transition to renewable energy in Pakistan to address the energy crisis and expensive import-based energy generation.

He further said that devastating floods due to unprecedented monsoons in Pakistan are manifestations of climate change and a renewable energy mix can play a crucial role in emission reduction to mitigate these disastrous impacts.

Secretary Energy Department Government of Sindh, Abu Bakar Ahmed, briefed the audience about various initiatives being taken, including solarization of public buildings, schools, hospitals, and 225 basic health clinics, a project to provide 200,000 solar home systems in 10 low-energy access districts, and capacity building activities for domestic production of technology. He also said that the waste-to-energy project is under deliberation for Karachi, which will be later expanded to the rest of Sindh.

Counselor Head of Development Cooperation Embassy of the Federal Republic of Germany, Dr. Sebastian Paust, informed the participants that Germany’s journey on climate change mitigation and energy transformation started in the 1990s based on just transition. He informed that to support Pakistan’s renewable energy transition Germany has provided 350 million euros for 16 projects and 30 million euros for technical cooperation in areas of the energy transition, efficiency, and electric vehicles.

Deputy Director, Knowledge, Policy, and Finance Centre, International Renewable Energy Agenda (IRENA), Dr. Ute Collier, said that half of the emission reduction targets in the Paris Agreement can be achieved through energy conservation and scaling up renewable energy. She pointed out that in Pakistan half of the population lacks access to clean cooking energy, while a quarter has no access to electricity which reinstates the necessity of clean renewable energy transition.

CEO Alternate Energy Development Board (AEDB), Shah Jahan Mirza, informed that by 2030, AEDB aims to increase its renewable energy share to 60 percent, with 90 percent of it being indigenous to reduce pressure on foreign exchange reserves. He further said that AEDB is in the process of launching a large solar power project with a capacity of 2400 MW, with the government providing three sites to private power companies.

Elaborating on various projects and policies being deliberated he said solarization of diesel-based tube wells, waiving off import duty and sales tax on solar technology, and introducing single line tariffs for competitive bidding to increase renewable energy generation.

Chief Strategic Officer K-Electric, Naz Khan, said that there has been a 50 percent increase in electricity price due to the fuel mix dominated by thermal energy and import-intensive generation, which is much higher than the majority of the world. She said that 257 GW of renewable energy was added globally in 2021, and it is projected for 2022 that $55 billion will be saved due to this addition and Pakistan can increase its foreign exchange reserve status by exploiting this.

She informed that K- Electric plans to add 1,200MW in the next 7-8 years from renewable energy through equity with the private sector and invest in its finances, which will save Forex $8-10 Billion. In June 2022, 637MW was generated, and 519 MW has been commissioned on net metering of domestic consumers. She suggested incentivizing through cost-reflective tariffs and competitive bidding to attract investment especially green financing through products and scaling up net metering of solar households.

CEO, Engro Energy Pvt. Ltd., Yusuf Siddiqui, informed that Engro Energy plans to add 500MW renewable energy through the Jhimpir power project by 2024, which will be scaled up to 1GW.

He advocated liberalization of the power sector and said that private power companies should be allowed to work outside the government’s ambit, take responsibility for risks, and sell directly to consumers. He informed that this is a successful and cost-effective international model and can potentially bridge investment and power demand.

CEO Pakistan Business Council (PBC), Ehsan Malik, highlighted that PBC adopted the ‘Make in Pakistan’ policy to address the high import crisis. Criticizing low tariffs on fossil fuel-based energy will slow the transition to renewables, especially solarization by domestic consumers. He suggested that government must reform energy policies and improve the distribution system, address issues on transmission losses and rumors on net metering of domestic consumers, and run awareness campaigns through media platforms.

Explaining Pakistan’s renewable energy generation potential, Research Fellow SDPI, Dr. Hina Aslam, informed that 0.07 percent solar potential is enough to meet Pakistan’s energy demand. She informed that Sindh and Balochistan can produce 340GW wind and suggested recycling 30 MMT of municipal solid waste annually should be exploited to produce energy from waste.

She said that like the rest of the world, Pakistan experienced a 3.25 percent increase in renewable energy in 2021, and net FDI in the power sector in 2021 was $911.7 million, with much room for growth, and a $101 billion target has been set by 2030. She suggested improving coordination between national-subnational entities and indigenous production to lower costs and smoothing out regulatory procedures to catalyze this transition.

Chief Executive Qaim Group of Companies and Member BOG SDPI, Engr. Abdul Jabbar Memon, in his closing remarks, stressed efficiency by phasing out inefficient power plants. He suggested clubbing and revamping NEPRA and OGRA to make a smoother transition to renewable energy.



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