8/27/22, 2:37 AM Cheap and clean energy - Newspaper - DAWN.

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TODAY'S PAPER | AUGUST 26, 2022

Cheap and clean energy

Ali Tauqeer Sheikh | Published December 23, 2021

The writer is an expert on climate change and development.

GLOBAL climate targets will not change if Pakistan commits to net zero emissions. But
Pakistan’s economic growth may get a boost that present misplaced policies cannot
deliver. Unless Pakistan redirects its energy investments, the energy crisis, circular
debt and urban pollution will keep worsening. Renewable energy (RE) can bring down
the cost of development remarkably, reduce pressure on foreign exchange, strengthen

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outreach to underserved communities, and reduce emissions for cleaner air in the
cities.

Pakistan’s energy policy has gone in the opposite direction of global trends. Pakistan abandoned its
earlier targets of 1,235 megawatts of wind and 430MW of solar, determined in the 2006 policy for
development of RE for power generation. The Alternative & Renewable Energy (ARE) policy adopted
by this government in 2019 reset the target for energy from renewable sources by 2030 to 30 per
cent excluding hydropower. This target was reduced further to 12pc by the Indicative Generation
Capacity Expansion Plan approved in 2021. IGCEP committed to the ‘least-cost option’; yet it has
revisited the definition and included seasonally flowing hydropower in the RE category, that ARE had
not. This change of heart has effectively elbowed solar and wind energy out of the equation and paved
the way for foreign investments in hydropower instead of solar that can be commissioned at one-
fourth the cost and time, mostly with domestic financing. It has also accentuated differences between
the provinces who have more nuanced perspectives.

All this was happening at a time when solar power had become the cheapest electricity in history —
cheaper than coal and gas in most major countries. The cost of electricity from solar photovoltaic (PV)
panels has decreased by 90pc since 2009, according to the annual World Energy Outlook 2020, by
the International Energy Agency. Instead of following the economic logic, Pakistan looked the other
way. Our neighbours, India and China, followed the economic imperatives.

During this period, India attained the fourth global position in wind power and fifth in solar installed
capacity. Their renewable power generation capacity has recorded an annual growth rate of over
17pc. The Indian government had an initial target of 20 gigawatt capacity for 2022 and that was
achieved four years ahead of schedule. This quick success was enabled by importing PV panels from
China while the 1,000MW Quaid-i-Azam solar park floundered and languished. In China, likewise, the
RE capacity reached an estimated 40pc of the total installed capacity, and about 26pc of total power
generation. India and China are now both leading Asia on green energy and have achieved an
accelerated economic growth rate by reducing the cost of development.

Pakistan’s energy policy has gone in the

opposite direction of global trends.

The market for RE is created by the high costs and pollution levels of coal as a source of energy. Its
global pipeline has collapsed by 76pc since the Paris Agreement. Forty-five countries have already
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committed to no new coal power plants. Pakistan announced it would shelve two coal plants producing
only 2,600MW whereas, at the same time, Bangladesh declared the cancellation of 10 such planned
plants of 8,711MW. Pakistan’s announcements lacked both courage and homework.

No wonder the country has backtracked from the commitment made by Prime Minister Imran Khan
at the Climate Action Summit in December 2020, where he had declared: “We will not have any more
power based on coal.” It has since been changed to no more ‘imported’ coal. He had also committed to
liquification and gasification of indigenous coal. No plans for nine operating and another five almost
completed projects have so far been announced. As it is a new romance that just started a few years
ago, Pakistan has not yet consigned coal to history.

It is against this background that coal imports have been growing at an annual rate of 19.26pc. While
the coal power plants were justified on the basis of low-grade Thar coal, in reality, the energy wheel is
run by importing high-grade South African coal. In addition to the use for energy, coal is also
imported for our fast-expanding cement industry, now propelled to fuel the housing construction to
turn around the economic growth rate.

Once the cheapest source of energy, hydropower has now been superseded by solar and wind despite
their intrinsic limitations of time of the day and wind velocity, particularly because of the
breakthroughs in long-term energy storage batteries. Except for the Tarbela and Mangla dams, all
other public-sector hydropower projects have witnessed delays and cost overruns. The average per
unit cost at the 969MW Neelum Jhelum Hydroelectric Project, for example, has escalated to 16-18¢
kilowatt per hour, compared to 4-5¢/kWh from solar power plants. In the absence of any financial
closing before starting construction, the envisioned large dams (Diamer-Bhasha, Mohmand) and ‘run-
of-the-river’ ones (Dasu, Kohala, Suki Kinari, Karot, Azad Pattan) will face similar cost overruns.
Their pricing structure will be multiple times more expensive. Clearly, water storage needs must be
separated from energy needs. Solar plants can be installed within months and the State Bank can help
further reduce their prices by cutting financing costs through simply extending the longer tenure of
loans to say 20 years, instead of the present seven to 10 years.

While we have excess electricity production, the government does not always acknowledge that 61
million people still have no access to electricity or suffer from poor quality of access. Almost 46pc of
our rural population is living without electricity. It is estimated that $20 billion is required to upgrade
the transmission network by 2040. Off-grid solutions can help reach the underserved areas rather
than waiting decades for the upgradation of transmission lines.

Electricity can be provisioned through solar mini or micro-grids to bring light to their lives. In addition
to getting urban population off-grid through solar home systems, solar energy can also be supplied to
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schools, health facilities, SMEs, etc. through microfinance facilities and models of rural energy
entrepreneurship. The National Electric Vehicles Policy will become more meaningful if the charging
infrastructure for the emerging EV market is supported by hybrid solar systems. It is imperative that
Pakistan adopts pro-poor approaches to energy production and supply to reduce the cost of economic
development. After all, reliable, cheap and clean energy is a right of all citizens.

The writer is an expert on climate change and development.

Published in Dawn, December 23rd, 2021

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