Brief Overview of Pakistan's Electric Vehicle Policy

Pakistan has a low level of motorization with just 9% of the households owning a car. Nearly half of all households own a motorcycle. Motorization rates in the country have tripled over the last decade and a half, resulting in nearly 40% of all emissions coming from vehicles. Concerns about climate change and environmental pollution have forced the government to to take a number of actions ranging from adoption of Euro6 emission standards for new vehicles with internal combustion engines (ICE) since 2015 and announcement of a national electric vehicle (EV) policy this year.

Vehicle Ownership in Pakistan. Source: PBS

EV Policy:

Pakistan electric vehicle policy 2019 sets EV adoption targets and includes incentives for buyers and manufacturers. It also focuses on development of nationwide charging infrastructure to ease adoption of electric vehicles. Here are some of the salient points of the policy:

 Policy Targets: 

1. Goal for cars: 30% of new sales by 2030 and 90% of new sales by 2040

2. Goal for 2 and 3 wheelers: 50% of new sales by 2030 and 90% of new sales by 2040

3. Goal for buses: 50% of new sales by 2030 and 90% of new sales by 2040

4. Goal for trucks: 30% of new sales by 2030 and 90% of new sales by 2040

Buyer Incentives: 

1. 1% GST for EVs vs 17% for regular vehicles

2. Lower electricity tariffs for EVs

Charging Infrastructure: 

1. Only 1% import duty on charging equipment.

2. Lower power tariffs for charging stations.

3. One fast DC charging station per 3km by 3km area in all major cities

4. DC fast chargers on all motorways every 15-30 km.

5. Ensure uninterrupted power on feeders for charging stations.

Manufacturer Incentives: 

1. All greenfield investments apply to EV manufacturers and those converting their existing facilities to manufacture EVs.

2. State Bank to offer lower rate financing for EV manufacturing.

Summary:

Announcement of National Electric Vehicle (EV) Policy 2019 by Pakistan government is a step in the right direction. It is a forward looking step needed to deal with climate concerns from growing transport sector emissions with rapidly rising vehicle ownership. It also focuses on development of nationwide charging infrastructure to ease adoption of electric vehicles.  Meanwhile it's crucial that Euro6 emission standards be seriously enforced with proper inspections to limit emissions from internal combustion engine (ICE) vehicles being sold now.

Related Links:

Haq's Musings

South Asia Investor Review

Vehicle Ownership in Pakistan

Low Carbon Energy in Pakistan

Pakistan Transport Sector

Recurring Cycles of Drought and Floods in Pakistan

Pakistan's Response to Climate Change

Massive Oil and Gas Discovery in Pakistan: Hype vs Reality

Renewable Energy for Pakistan

Digital BRI: China and Pakistan Building Fiber, 5G Networks

LNG Imports in Pakistan

Growing Water Scarcity in Pakistan

China-Pakistan Economic Corridor

Ownership of Appliances and Vehicles in Pakistan

CPEC Transforming Pakistan

Pakistan's $20 Billion Tourism Industry Boom

Riaz Haq's YouTube Channel

PakAlumni Social Network

Comments

Riaz Haq said…
World s largest electric vehicles manufacturer BYD is all set to enter Pakistan. The announcement was made by Pakistan Electric Vehicles & Parts Manufacturers and Traders Association (PEVPMTA) General Secretary Shaukat Qureshi while talking to local media.

https://dunyanews.tv/en/Business/521071-BYD-electric-vehicles-manufacturing-Pakistan

“Toyota, the world auto giant, for the first time signed an agreement on November 7, 2019, to develop Electric Vehicles with BYD, the world’s largest electric vehicles manufacturer, with 44 plants around the globe employing 250,000 personals, with turnover of $250 billion," he said. “Scenario will definitely change in Pakistan as well, with the Japanese companies roll out their models by 2024," he added.

As a leading new energy vehicle (NEV) manufacturer, BYD has created a broad range of internal combustion (IC), hybrid and battery-electric passenger vehicles.

BYD s NEVs have ranked No.1 in global sales for three consecutive years since 2015. Developing electric vehicles that are intelligent and connected, BYD is inaugurating a new age of automotive innovation.
Riaz Haq said…
My quotes in story on Pakistan's Electric Vehicle Policy
----------------
Two cheers for Pakistan’s electric vehicle policy

https://www.thethirdpole.net/en/2019/12/04/two-cheers-for-pakistans-electric-vehicle-policy/

Riaz Haq, who worked in various tech firms for 35 years in the Silicon Valley and is an EV enthusiast, said with 32 million households and 17.5 million motorcycles registered in Pakistan, the motorcycle ownership has increased from 41% in 2015 to 53% in 2018. Pakistan is the fifth biggest motorcycle market in the world after China, India, Indonesia and Vietnam.

-----------------------

“It is a forward looking step needed to deal with climate concerns from growing transport sector emissions with rapidly rising vehicle ownership,” Haq wrote in his blog. He has recently bought a Chevy Bolt EV Premier “because of its 238 mile range on a single charge at a price 30% lower than Tesla 3”, after having test driven Tesla Models S, X and 3 and Chevy Bolt EV and Nissan Leaf and Leaf Plus.

Aware of the infrastructure that will be needed for EVs, Aslam sees it as an opportunity with a whole new service industry and numerous livelihood options opening up. “Pakistan is thirsting for new business opportunities and markets. Globally, China is leading the EV industry, like in the manufacture of batteries. If we build our capacity technologically, Pakistan can become a hub for exporting EVs – specially two and three wheelers. We have the appetite to lead and come up with innovative ideas like charging stations that run on solar.”

-------------------

All this will be possible, says Haq, because EVs are a lot simpler, “Easier to manufacture, have fewer parts and require fewer people on the assembly line saving labour costs.”
Riaz Haq said…
#Pakistan sets sights on floating #solar as #water scarcity bites. Floating PV modules on dams and lakes not only produce #energy but they also reduce water evaporation and water wastage. #RenewableEnergy #ClimateCrisis
https://www.pv-tech.org/news/floating-solar-to-conserve-water-in-pakistan#.Xek43gpIT1Y.twitter

With Pakistan's water reserves fast depleting, floating solar will be a key part of conserving resources and producing cheap energy, according to the nation's minister for Power and Petroleum Omar Ayub Khan.

Speaking at a conference on the water crisis, Khan announced that floating solar systems would be installed in four reservoirs besides canals at Tarbela, Mangla, Ghazi Barotha and Khanpur.

He noted Pakistan's plans to roll out 18-20GW in new hydropower capacity – taking the power source to 70% of the energy mix – and to ramp up nuclear power to 10% of the energy mix. The new hydro capacity would also offer great opportunities for FPV projects.

Speaking on water conservation, Khan said: "Not just flood irrigation system we have been used to. The world has moved on. We have to make sure that this resource is jealously guarded and used. We are already finalising plans with floating solar."

The government is already in discussions with the energy ministry of Punjab over placing floating solar on its canals so that its irrigation systems can also be run on solar power. Meanwhile, 29,000 tube wells in Balochistan will also be converted to solar. Floating PV modules not only produce energy but they also reduce water evaporation and water wastage.

Khan noted that solar will continue to decrease in price, given that the country has adopted competitive bidding for all new projects under its new renewable energy policy.
Riaz Haq said…
I'm quoted in Dawn's story on electric vehicles today. Most experts are lauding the policy as a step in the right direction. “It is a forward-looking step needed to deal with climate concerns from growing transport sector emissions with rapidly rising vehicle ownership,” Mr Haq wrote in his blog. https://www.dawn.com/news/1521204
Riaz Haq said…
#Solar & #Batteries Will Change #Energy Industry Forever. #Costs are down nearly 90% in past decade, and will be only $8 to $14 per MW-hour by next year, or about a penny per kW-hour. #Electricity @themotleyfool #stocks $RUN $TSLA $HASI $SPWR $BEP $NEE https://www.fool.com/investing/2019/12/11/the-moment-is-here-for-energy-storage.aspx

One of the biggest criticisms of renewable energy has been its inherently intermittent nature. Solar energy plants don't produce power at night, and wind turbines don't produce power without wind, so utilities need fossil-fuel or power plants to keep the grid running. Without a way to store renewable energy, fossil fuel will always be the backbone of the electric grid.

What's changed in the past few years is that energy storage is suddenly an economical asset to consider as part of the electric grid. If regulators and utilities find ways for energy storage to generate revenue, finance companies will open up their wallets and fund investment. Before long, energy storage could change energy forever.

Solving the revenue problem
Energy storage is starting to make financial sense, which is the only way it will ever be able to reach scale. Utilities see value in energy storage as a way to offset expensive peak generation on high-demand days. For example, in one time of use rate plan in Southern California Edison's territory (southern California) peak rates during the summer are $0.38 per kW-hr but rates during off-peak hours are just $0.13 per kW-hr. The $0.25 difference can be cost savings for homeowners with a battery by using the battery's energy during peak hours and charging during off-peak. Depending on the size of the battery, savings could be a few dollars per day for consumers and for utilities it means buying less power from expensive peaker plants, helping lower rates for everyone.

Utilities are also seeing it as a way to reduce transmission and distribution costs, and even put off investment in new power plants. Con Edison is using batteries as part of a plan to defer $1.2 billion in substation investments. And new bids from solar plus energy storage are beating the cost of building new power plants.

Residential and commercial customers are seeing value from a different angle, using energy storage to reduce electricity bills. SunPower (NASDAQ:SPWR), Sunrun (NASDAQ:RUN), and Tesla (NASDAQ:TSLA) are starting to build energy storage systems that reduce on-site electric bills and can even bid capacity into electric grids by creating a virtual power plant. There are different models for consumers, but the time of use rate savings I highlighted above is one option and another is commercial building owners saving on demand charges by batteries lowering their peak electricity usage each month.

There's now money to be made in energy storage, so if costs are low enough, the investments will make financial sense.

The cost problem
When batteries cost thousands of dollars per megawatt (MW), it was tough to justify their value to the grid because the up-front expense was too high. But costs have fallen nearly 90% in the past decade, according to NextEra Energy (NYSE:NEE), and will be only $8 to $14 per MW-hour by next year, or about a penny per kW-hour. For perspective, the average kW-hour of electricity costs about 13 cents for retail users.

Combined directly with wind and solar, energy storage starts to become really compelling. NextEra Energy estimates that post-2023, wind plus energy storage costs will be $20 to $30 per MW-hour, and solar plus energy storage will be $30 to $40 per MW-hour. Natural gas is expected to match the solar-plus-storage costs.

As the cost of energy storage becomes competitive with traditional fossil fuel assets, there is a growing demand for battery installations and utilities and finance companies are finding ways to make it a profitable investment.

Riaz Haq said…
$9 Billion #Battery Project By #BMW, #BASF. Batteries/electric transmission account for 40% of cars’ costs. #Lithium-ion batteries are poised to power next generation of cars & to help #renewable energy like #wind and #solar. #electricity
https://www.bloomberg.com/news/articles/2019-12-09/-9-billion-battery-project-with-bmw-basf-gets-eu-green-light via @markets

The European Union’s plan to kick-start battery production and compete with Asian suppliers got a boost from the approval of 3.2 billion euros ($3.5 billion) in state aid for a landmark project that spans across seven nations.


The funds will unlock private investment of around 5 billion euros in the initiative by 17 companies, taking its total value to about $9 billion. It will include industrial and automotive giants such as BASF SE, BMW AG and Fortum Oyj, in order to support the development of innovative and sustainable technologies in lithium-ion batteries from mining and processing the raw materials to production and recycling.

“This is a very important step, even a breakthrough, in what I believe should be the new EU industrial policy,” European Commission Vice President Maros Sefcovic said on Monday in Brussels. “We should really focus on the area that is very important for this technological competition, which is becoming more and more severe.”

The move by Brussels underscores growing European awareness that key industries risk falling behind if they don’t fill manufacturing gaps in energy storage technology. Lithium-ion batteries are poised to power the next generation of plug-in cars. They also promise to help balance electric grids transmitting renewable energy like wind and solar.

Under the battery project, which aims to be completed by 2031, member states were cleared to grant the following amounts of state aid:

Germany up to around 1.25 billion euros
France up to 960 million euros
Italy up to 570 million euros
Poland up to 240 million euros
Belgium up to 80 million euros
Sweden up to 50 million euros
Finland up to 30 million euros
Clean mobility is set to play an important role in the EU plan to become the first climate-neutral continent by 2050. Commission President Ursula von der Leyen is set to present on Wednesday a detailed roadmap of her Green Deal to zero-out emissions.


Another EU battery project, coordinated by Germany, is under way and is likely to seek EU approval for state aid later this month, Sefcovic said. It will probably involve 12-13 member states and around 50 companies.

“The window of opportunity for the European battery industry is open until 2021-2022,” he said. “By then we have to be clearly able to demonstrate that we can manufacture the best batteries in the world on a massive scale, because this is when we expect the ramping up of the production of electric cars and demand in Europe.”

Batteries and electric transmission account for about 40% of passenger cars’ costs and the gap in nascent European production is largely being filled by Japanese and South Korean battery makers like Panasonic, LG Chem Ltd. and Samsung SDI Co. In the U.S., Tesla has built its own battery Gigafactory to satisfy demand for the cars it produces.
Riaz Haq said…
#Energy revolution is here, ushering in a shift toward clean energy. #Green options are beating out fossil-fuels. Cost of #solar panels fell by 80% 2010- 2018, lithium-ion #battery packs by 69% from 2014-2018; #LEDs declined 6X in from 2010 to 2014. #EV https://on.mktw.net/2rJMtEL

For the longest time, the prevailing narrative about renewable energy featured clumsy technologies, high costs, and burdensome subsidies. In the absence of strict mandates and far-reaching policy changes, the chances for mass adoption seemed slim. Electric vehicles (EVs) simply couldn’t go the distance, and LED lights were unattractive and unaffordable.

But now that these technologies have come of age, a new story is being written. Around the world, businesses, governments, and households are taking advantage of more cost-effective low-carbon technologies.

Owing to advances in information technologies (IT), green solutions can be integrated into business operations seamlessly. And as public support for these technologies has grown, so have the prospects for scaling up to a fully sustainable energy system.

As in any rapid transition, a full understanding of what is happening has lagged behind events. Many incumbent energy producers find it hard to believe that their world is undergoing a revolutionary change, so they insist that their heavily polluting technologies will remain relevant and necessary for some time to come.

Journalists, too, describe the transition with a degree of caution, because it is their job to be skeptical. And politicians and regulators are reticent to adopt a new perspective, even though they are already struggling to keep up with the pace of change in the energy industry.

To be sure, progress doesn’t come without setbacks, as the recent growth in energy-related greenhouse-gas (GHG) emissions shows. Yet there is no doubt that the future of energy will be dramatically different from the recent past. In fact, the transformation is happening even faster than we think, owing to three key factors.

Cost-effective
First, sustainable-energy technologies are quickly becoming more cost-effective than the alternatives, enabling businesses to reduce pollution, increase efficiency, and provide more goods and services.

The costs of technologies ranging from wind and solar power to EVs and smart grids have plummeted, and the learning curve — the linear drop in costs as new technologies are deployed on an ever-larger scale — has held steady across the board.

The cost of installing utility-scale solar panels fell by 80% from 2010 to 2018. Likewise, the cost of lithium-ion battery packs dropped by 69% from 2014 to 2018; the price of LEDs declined sixfold in just four years, from 2010 to 2014.

What was once pricey is now cost-effective; it will soon be downright cheap.
Riaz Haq said…
#Pakistan govt inks deals for 560 MW of fresh #windenergy. Move in line with the country’s 30% national #renewables goal by 2030 https://renewablesnow.com/news/pakistani-govt-inks-deals-for-560-mw-of-fresh-wind-676632/

Pakistan’s Alternative Energy Development Board (AEDB) on Friday signed contracts with the developers of projects that will see the country expand its wind power capacity by 560 MW.

The government agency, which is tasked with promoting renewables installation in Pakistan, has inked implementation and guarantee direct agreements with independent power producers (IPPs) regarding 11 projects. The move is in line with the country’s 30% national renewables goal by 2030 and efforts to cut dependence on fossil fuel imports. The new capacity is expected to lead to the production of over 1.8 billion kWh of clean power per year, AEDB said.

Six of the schemes will be supported by the International Finance Corp (IFC), which on Friday signed agreements to finance the so-called Super Six project portfolio with USD 450 million (EUR 406.9m) in debt. Those power plants, with a combined capacity of 310 MW, will be installed in the Jhimpir wind corridor in Sindh province and will be able to generate enough electricity to cover the annual needs of 450,000 homes while offsetting around 650,000 tonnes of carbon dioxide (CO2) emissions annually, IFC said in a separate statement. It will provide some USD 86 million in funds from its own account and USD 234 million mobilised from other lenders.

The 11 projects are expected to become operational by 2021.

(USD 1.0 = EUR 0.904)

Riaz Haq said…
In #Pakistan around 1237 MW #windpower farms are installed out of which a major share contained by the coastal wind corridor in #Sindh province with the installed capacity of about 935 MW. #renewableenergy #cleanenergy https://aip.scitation.org/doi/abs/10.1063/1.5115376

Pakistan is a country with massive potential of clean and green renewable sources of energy, wind energy holds a significant position in it, 50 GW of wind energy farms have been installed throughout the world. In Pakistan around 1237 MW wind power farms are installed out of which a major share contained by the Sindh province with the installed capacity of about 935 MW. This paper analyses the positive steps taken in the wind power sector of our country and Sindh province. Moreover, some recommendations are also presented regarding wind power potential which will be beneficial for insertion of the huge amount of cheap power in the national grid mix to lean the looming issues of Pakistan’s energy sector.
Riaz Haq said…
#Tesla’s Musk says #solar, #energy storage to grow faster than #ElectricVehicles. #EV #battery #cleanenergy

https://www.cnbc.com/2019/12/14/teslas-musk-says-solar-energy-storage-to-grow-faster-than-cars.html

Tesla CEO Elon Musk recently said the company’s solar and energy storage business will grow faster than its electric vehicle business.
With Tesla making progress on Model 3 production efficiency, Musk said on the most recent earnings call there will be more focus on solar and the broader Tesla Energy business, which includes aligning intermittent solar power with battery storage.
Tesla and Musk have faced criticism, and a shareholder lawsuit, over the solar business, the controversial acquisition of SolarCity, and issues at the company’s solar panel plant in Buffalo, New York.

A Model 3 ramp-up that resulted in a quarterly profit was a sign that Tesla’s automobile business finally may be financially stable. If so, it is a good time for Tesla to turn its attention to the energy business — encompassing solar and energy storage — that has for long taken a backseat to getting the electric vehicle assembly line in order.

Elon Musk has been broadcasting this message since Tesla reported a surprise profit in the third quarter. On the call with Wall Street analysts after the earnings in November, the Tesla CEO said, “For almost two years we had to divert a tremendous amount of resources.”

Now Musk claims Tesla is poised for “the really crazy growth for as far into the future as I can imagine. ... It would be difficult to overstate the degree to which Tesla Energy is going to be a major part of Tesla’s activity in the future,” he said.

Never one to shy away from bold claims or ambitions, Musk said Tesla Energy could grow to roughly the same size as Tesla’s automotive business, and solar would grow, on a percentage basis, the fastest of any, with storage second.

“I think both over time will grow faster than automotive,” Musk said. “They’re starting from a smaller base.” He added, “I think, especially, if you look at sort of — if you look at, like, year-over-year growth, it will be absolutely incredible ... over the course of, say, a year, gigantic increase.”

In a recent internal email to Tesla employees, Musk outlined two critical year-end priorities: delivering all cars to their customers and boosting the rate of solar deployments by a significant degree.

Skeptics point to a variety of other reasons why Musk may be in solar- and energy-business salesman mode, beyond the Model 3 inflection point. The solar business has in recent years been associated with more negative than positive news. Tesla faces a lawsuit from shareholders over its controversial 2016 purchase of SolarCity; the solar roof that Musk has been touting for years is off to a slow start; its solar panel plant in Buffalo, New York, has been dogged by issues; and its solar business has faced unfavorable customer-service reviews.

Tesla did not respond to multiple requests for comment.

The outlook for Tesla’s solar business
Industry experts and Tesla watchers are applying a heavy discount to Musk’s energy claims, saying the Tesla chief is prone to hyperbole and exaggeration.

“I’d take all Elon claims with a grain, or metric ton, of salt,” said Morningstar equity analyst David Whiston. “Energy probably stays a small piece of Tesla for a long time because there’s so much growth to come in auto with new vehicles and AVs [autopilot].”

“I don’t doubt there’s a nice growth runway long term for solar,” Whiston said, but added, “Like a lot of things in investing, it’s a show-me story.”

Analysts covering the rooftop solar sector estimate that it can grow from a low-end estimate of 10% annually to as high as 20%, based on the performance of the leading companies, such as Sunrun, SunPower and Vivint Solar.

“Tesla over the past two years has really taken their eye off the ball there, despite a visible brand. … The solar business shrank dramatically,” said JMP Securities analyst Joe Osha, who covers both Sunrun and Tesla.
Riaz Haq said…
IRENA Pegs #Pakistan’s Total #RenewableEnergy Capacity By 2018-End At Over 13,000 MW, With #Solar Contributing 12% Or More Than 1,500 MW. Target: 30% of installed capacity to be #renewable by 2030. #cleanenergy #ClimateChange http://taiyangnews.info/markets/pakistans-cumulative-solar-capacity-tops-1-5-gw/

At the end of 2018, the cumulative installed solar energy capacity of Pakistan had reached 1,568 MW, increasing from 742 MW at the end of 2017, representing an addition of over 800 MW in a single year. These statistics are published in the International Renewable Energy Agency’s (IRENA) annual report, Renewable Capacity Statistics 2019.

The report tracks renewables growth of several countries starting from 2009. For Pakistan it means solar power capacity of 4 MW in 2009 has now grown to 1.5 GW, accounting for 12% of out of 13 GW of total renewable energy capacity of the country in 2018.

Globally, a total of 171 GW of new renewable energy capacity was installed in 2018, growing 7.9% annually, of which 84% came from wind and solar alone. In concrete terms, solar added 94 GW of new capacity with Asia accounting for 64 GW, while wind grew by 49 GW.

According to an April 2018 Renewables Readiness Assessment report of IRENA, Pakistan does not have a clear renewable energy target, which the agency says is a must to ‘translate political will into a language that can be understood by investors’.

The World Wind Energy Association reported on April 2, 2019 that the new government in the country under Prime Minister Imran Khan plans to increase the share of renewable energy in total power generation to 30% by 2030, from wind, solar and biomass, and additionally 30% from large-scale hydropower. It would be a 26% points increase from the current renewables share of 4%. Pakistan is working on its Renewable Energy Policy 2019 whose guiding principles have been approved by the government’s Cabinet Committee on Energy (CCoE).

As per January 2017 directives issued by the National Electric Power Regulatory Authority (NEPRA) of Pakistan, the country should be moving towards a competitive bidding process for utility scale solar and wind power plants, something that’s yet to take place.

In a December 2018 report, the Institute for Energy Economics and Financial Analysis (IEEFA) wrote that the country could reach 12.4 GW of total installed solar power capacity by 2029-30, provided the government came up with clearly defined targets for long-term renewable energy policy (see IEEFA Suggests 30% RE For Pakistan By 2030).

Riaz Haq said…
Rickshaw maker Sazgar Unveils #Pakistan’s First Locally Manufactured #ElectricVehicle. It will be powered by a 48V, 160Ah, 7.7kwh battery paired with a 3kw motor that will give it a range of 170KM with the weight included.
https://propakistani.pk/2020/01/24/sazgar-unveils-pakistans-first-locally-manufactured-electric-vehicle/

Yesterday, Sazgar Engineering Works Limited announced that they would be unveiling their indigenously manufactured Electric Powered Three-Wheeler.

In a glitzy ceremony attended by government officials, members of the social and business community, the company has launched the much-awaited three-wheeler.

The company has vowed to make the vehicle commercially available after the National Electric Vehicle Policy is implemented by the government. The company, during the launch, said that the vehicle would create employment opportunities in the auto sector and help in its development.

The three-wheeler is being manufactured locally and this will help in saving foreign exchange, help curb the oil import bill and reduce environmental pollution.

Apart from the electric kit, the rest of the three-wheeler is set to be produced locally which will help boost the economy. While some of the details are still scarce, the company has said that it will be powered by a 48V, 160Ah, 7.7kwh battery paired with a 3kw motor that will give it a range of 170KM with the weight included.

It will take almost 5 hours to charge and, according to some estimates, it will save Rs. 250,000 in terms of fuel and Rs. 30,000 in terms of maintenance each year.

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