Is Pakistan Ready For Clean Energy Revolution?

Rising worries about climate change have recently made me join the Clean Energy Revolution by installing rooftop solar and leasing an electric car. What is the Clean Energy Revolution? It is the growing use of solar panels, battery storage and electric vehicles to reduce carbon emissions. Is Pakistan ready to join the Clean Energy Revolution?

Tesla Surpasses China's BYD in EV Sales. Courtesy Electrek

Tesla Electric Cars:

Silicon Valley is at the forefront of this clean energy revolution led by Tesla. Tesla is more than an electric car company; the company also supplies solar panels and batteries. Other automakers are also taking their cues from Tesla.  China's BYD Auto has only recently been surpassed by Tesla in production volumes. Auto giants General Motors and BMW are both building electric cars and planning to build "gigafactories" like Tesla's to manufacture battery packs for vehicles and homes. Pakistan is building up renewable power generation capacity. The country has also recently announced its National Electric Vehicle Policy that offers incentives to transition to clean energy.

Bloomberg estimates that Batteries and electric transmission account for about 40% of passenger cars’ costs. European demand is met by mainly 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 cells at its Gigafactory to manage costs and satisfy demand for the cars it produces. Chinese demand for battery packs is met by BYD.

Battery Backed Renewable Energy Costs:

High-capacity battery pack costs have dropped nearly 40% since 2015, according to Wood Mackenzie data as reported by Wall Street Journal. The prices of lithium and vanadium—two of several key raw materials that are used in such batteries—also have declined over the past year or so.

Battery storage costs have fallen nearly 90% in the past decade, according to NextEra Energy.  Cost reductions are expected to continue to only $8 to $14 per MW-hour by 2020, or about a penny per kW-hour. For perspective, the average kW-hour of electricity costs about 13 cents for retail users.

NextEra Energy forecasts 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.

Pakistan 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.

Private vehicle ownership in Pakistan has risen sharply over the last 4 years. More than 9% of households now own cars, up from 6% in 2015. Motorcycle ownership has jumped from 41% of households in 2015 to 53% now, according to data released by Federal Bureau of Statistics (FBS) recently. There are 32.2 million households in Pakistan, according to 2017 Census.


Vehicle Ownership in Pakistan. Source: PBS

Pakistan's National EV Policy is a forward looking step needed to deal with climate concerns from growing transport sector emissions with rapidly rising vehicle ownership. It offers tax incentives for buyers and sellers. It also focuses on development of nationwide charging infrastructure to ease adoption of electric vehicles.

Low Carbon Energy Growth:

In recent years,  Pakistan government has introduced a number of supportive policies, including feed-in tariffs and a net metering program to incentivize renewables. These have been fairly successful, and renewables capacity in the country surged substantially over 2018 when 1245 MW was added, of which 826MW was contributed by the solar sector, according to Fitch Solutions.

Non-Hydro Renewables in Pakistan. Source: Fitch Solutions

Pakistan’s Alternative Energy Development Board (AEDB) recently signed deals for projects that will see the country expand its wind power capacity by 560 MW.  Fitch Solutions forecasts Pakistan's solar capacity to grow by an annual average of 9.4% between 2019-2028, taking total capacity over 3.8GW by the end of our forecast period.

Sindh government has recently signed a deal for 400MW solar park at Manjhand, 20MW rooftop solar systems on public sector buildings in Karachi and Hyderabad, and 200,000 solar home systems for remote areas in 10 districts of the province. The project is estimated to cost USD105million, with the World Bank funding USD100 million.

The biggest and most important source of low-carbon energy in Pakistan is its hydroelectric power plants. Pakistan ranked third in the world by adding nearly 2,500 MW of hydropower in 2018, according to Hydropower Status Report 2019.  China added the most capacity with the installation of 8,540 megawatts, followed by Brazil (3,866 MW), Pakistan (2,487 MW), Turkey (1,085 MW), Angola (668 MW), Tajikistan (605 MW), Ecuador (556 MW), India (535 MW), Norway (419 MW) and Canada (401 MW).

New Installed Hydroelectric Power Capacity in 2018. Source: Hydroworld.com

Hydropower now makes up about 28% of the total installed capacity of 33,836 MW as of February, 2019.   WAPDA reports contributing 25.63 billion units of hydroelectricity to the national grid during the year, “despite the fact that water flows in 2018 remained historically low.” This contribution “greatly helped the country in meeting electricity needs and lowering the electricity tariff for the consumers.”

Chinese BYD in Pakistan:

Multiple media reports suggest that China's BYD is about to enter Pakistan market following the announcement of Pakistan National EV Policy.   These reports indicate that Toyota, one of the largest automakers in Pakistan, has signed a deal with BYD to manufacture electric vehicles.

Other reports indicate that Pakistan's Rahmat Group is in talks with BYD to set up an electric vehicle plant at Nooriabad in Sindh province.

Minister for Science and Technology Fawad Chaudhry has claimed that in three years Pakistan will become the first country to manufacture electric buses, which will be driven by an electric motor and obtains energy from on-board batteries.

Summary: 

It appears that Pakistan is starting to get serious about joining the Clean Energy Revolution to deal with rising climate change concerns. The country has set targets for renewable energy growth and announced National Electric Vehicle Policy.  In recent years, Pakistan government has introduced a number of supportive policies, including feed-in tariffs and a net metering program to incentivize renewables. These have been fairly successful, and renewables capacity in the country surged substantially over 2018 when 1245 MW was added, of which 826MW was contributed by the solar sector, according to Fitch Solutions.  High-capacity battery pack costs have dropped nearly 40% since 2015, according to Wood Mackenzie data as reported by Wall Street Journal.  Cost reductions are expected to continue to only $8 to $14 per MW-hour by 2020, or about a penny per kW-hour. While production and use of renewable energy are growing, the electric vehicles in Pakistan have yet to find traction. Hopefully, the National EV policy will encourage production and adoption of electric vehicles in the country.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Electric Vehicle Policy

Nuclear Power in Pakistan

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…
IFC invests $450m in #Pakistan’s 6 #windfarms in Jhimpir wind corridor in #Sindh to generate more than 1,000 gigawatt-hours of electricity annually, enough to power 450,000 homes. Expected emission reductions of 650,000 tons of CO2 per year. #renewables https://www.esi-africa.com/industry-sectors/finance-and-policy/ifc-invests-450m-in-pakistans-six-wind-power-projects/

All Super Six projects are being developed by domestic companies: ACT Group, Artistic Milliners (Private) Limited, Din Group, Gul Ahmed Group and Younus Brothers Group.

“The government is aiming to increase the non-hydro renewable energy share in the overall generation mix from 4 to 20% by 2025 and it is welcoming to see Pakistan’s local private sector behind these Super Six wind projects, supporting the government’s long-term objective to see more wind and solar in the country’s energy mix,” said Ayub.

“This additional clean power will help meet growing demand, reduce the average cost of electricity, and improve both reliability and security of supply,” IFC’s Vice President for Asia and Pacific, Nena Stoiljkovic said. “We hope this will send a strong signal to the private sector that the renewable energy market in Pakistan is viable and sustainable, as well as beneficial to the Pakistani people.”

As part of the programme, IFC is providing a financing package of $320 million, comprising $86 million from its own account and $234 million mobilised from other lenders, which include Deutsche Investitions- und Entwicklungsgesellschaft (DEG, part of KfW Group of Germany), and local banks Bank Alfalah, Bank Al Habib and Meezan Bank.

The programme is in line with the joint energy strategy of the World Bank Group, which includes IFC, the World Bank and the Multilateral Investment Guarantee Agency (MIGA), to help address Pakistan’s structural issues in the energy sector, through policy reforms and increases in private investments to expand clean energy generation and bring down the cost of power.

The cost of power from the Super Six projects is expected to be more than 40% lower than the current average cost of generation, a move that is expected to spur more investments in renewable energy in the country.

IFC, one of the largest investors in Pakistan’s power sector, financed the first wind power project in the country in 2011 and helped created the framework for financing hydro and wind Independent Power Producers. With this programme, IFC will have made investments in 11 wind power projects in Pakistan.

The World Bank is supporting the government on policy reforms to enhance the energy sector’s sustainability and the implementation of the upcoming new renewable energy policy framework.
Riaz Haq said…
Estimated number of premature pollution-related deaths per year:

🇮🇳India: 2.33m
🇨🇳China: 1.87m
🇳🇬Nigeria: 279K
🇮🇩Indonesia: 232K
🇵🇰Pakistan: 223K
🇧🇩Bangladesh: 207K
🇺🇸United States: 196K
🇷🇺Russia: 118K
🇪🇹Ethiopia: 110K
🇧🇷Brazil: 109K

(Global Alliance On Health And Pollution)
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.
Riaz Haq said…
FAO DG to visit #Pakistan this week. #FAO’s work globally and in Pakistan focusing on Zero hunger and Food Security issues related to climate change. #food #hunger #ClimateChange https://nation.com.pk/13-Feb-2020/fao-dg-to-visit-pakistan-this-week

The Director-General of the Food and Agriculture Organization of the United Nations (FAO), Qu Dongyu will be arriving in Pakistan on a three-day state visit on Friday as part of his vision to further strengthen the years’ long extraordinary collaboration of the country and FAO. During his visit, the Director General, FAO will call on the Prime Minister of Pakistan besides meeting with Federal Minister of Food Security and Research and other high-level officials, representatives from the private sector, youth representatives, academia, civil society and resource partners to apprise them of FAO’s work globally and in Pakistan, focusing on Zero hunger and Food Security in the context of the global climate change scenario. The Director-General will also travel to rural Punjab to meet with small-holder farmers who are most at risk from natural disasters, the UN information center said.


Qu Dongyu, a former Vice Minister of Agriculture and Rural Affairs of China, elected as FAO Director-General in June 2019, has stressed the crucial role that FAO, which has 194 member states, can play in addressing key global challenges and accelerate progress towards achieving Sustainable Development Goals for all.

The priority challenges requiring urgent attention remain; the increasing rates of hunger and malnutrition, climate change-related risks to agriculture, ongoing natural resource depletion and environmental pollution and the growing spread of trans-boundary animal and plant pests and diseases.
Riaz Haq said…
#WorldBank approves $700m for #renewableenergy in #Pakistan. #Dasu dam will produce 2,160 MW in phase 1 to 4,320 MW in phase 2. #Hydrolectric #power to help reduce imports of fossil fuels, alleviating the stress on the country’s current account balance. https://tribune.com.pk/story/2188561/3-world-bank-approves-700m-help-pakistan-generate-renewable-energy/

The World Bank on Wednesday approved $700 million additional financing to help Pakistan generate low cost, renewable energy to provide affordable electricity to millions of users.

The World Bank is also working with the federal and provincial governments to deal with the coronavirus pandemic as the confirmed coronavirus cases soar past 2,000.

The additional financing will be used to complete the first phase of the Dasu Hydropower project. It will install 2,160 megawatts capacity along the Indus River.

Stage two will double the installed capacity to 4,320 megawatts – making it the largest hydropower plant in the country.

“Pakistan’s energy sector is aiming to move away from high-cost and inefficient fossil fuels towards low-cost, renewable energy to power the national grid,” said Illango Patchamuthu, World Bank Country Director for Pakistan.

“Along with reforms in the tariff structure, the Dasu Hydropower Project will result in fewer imports of fossil fuels, alleviating the stress on the country’s current account balance.”

The project will help lower the overall cost of energy generation in the country, which will benefit millions of energy users by making electricity more affordable for households, as well as the manufacturing and agricultural sector.

The powerplant will provide its electricity particularly in the summer to reduce blackouts when the demand is higher.


“The Dasu hydropower plant has a low environmental footprint and is considered to be one of the best hydropower projects in the world,” said Rikard Liden, Task Team Leader for the project.

“It will contribute to reducing Pakistan’s reliance on fossil-fuels and producing clean renewable energy.”

The Dasu hydropower plant will produce electricity at $0.03/kWh compared to Pakistan’s current cost of electricity generation of $0.08/kWh.

This investment will help Pakistan pave its way into becoming an upper middle-income country by 2047.
Riaz Haq said…
#China's Goldwind books 50-MW #WindEnergy turbines order in Jhimpir, #Sindh, #Pakistan in an area identified as a “wind corridor” with 1000 MW of wind power capacity installed. Golwind expects to install 150 MW of turbines in Pak in coming years #renewable https://www.renewablesnow.com/news/goldwind-books-50-mw-turbine-order-in-pakistan-701129/

China’s Xinjiang Goldwind Science & Technology Co Ltd (HKG:2208) said it has recently received an order to supply 50 MW of turbines for the ACTII wind project in Pakistan.

Goldwind is set to deliver 20 units of GW 121-2.5MW high temperature model turbines to local wind project developer ACT Wind (Pvt) Ltd, the Chinese manufacturer said.

The ACTII project is sited in Jhimpir, Sindh province, in the area identified as a “wind corridor” and with around 1 GW of wind power capacity installed, according to Goldwind.

ACT Wind is the Chinese company's repeat customer, after previously purchasing Goldwind turbines for the first ACT wind project. The 30-MW ACT wind farm has been operating for about four years.

Goldwind expects to install 150 MW of turbines in Pakistan over the coming years and bring its total installed capacity in the country to 477 MW.

In November 2019, Goldwind signed a contract with Power Construction Corporation of China Ltd (SHA:601669), also known as PowerChina, to equip the 50-MW Gul Ahmed wind project in Pakistan. It has also secured the contract for the Artistic II wind farm project in the country, the company said.
Riaz Haq said…
#Pakistan aims to generate 30% of its #electricity from #RenewableEnergy sources by 2030, including #wind, #solar, #biomass and small-scale #hydro https://tribune.com.pk/story/2250399/1-pakistan-aims-generate-30-clean-energy-2030/

Pakistan aims to generate 30% of its electricity from renewable energy sources by 2030 such as wind, solar, biomass and small-scale hydro.

This will complement the 27% of current electricity supply coming from large-scale hydro.

To this effect the 271 GE Renewable Energy wind turbines spreading over nine plants have a combined generating capacity of 450 megawatts (MW) – representing more than 36% of the current 1,235-MW total installed wind capacity in the country.
“Renewable energy is the future. With global warming happening, it’s good to say you’re working in the renewables business,” said GE Renewable Energy Services Manager Fawwad Haq.

“We are producing clean energy but not CO2 at these plants, so we’re giving people a better, cleaner type of energy,” he added.

Fawwad manages more than 50 wind turbine technicians who perform maintenance on hundreds of turbines at nine wind farms in the country.

A total of 233 direct and indirect employees help manage operations at eight of these plants.



Most of the wind farms that GE maintains and operates in Pakistan are located in desert regions where temperatures in early June were already in the 40s.

It takes nearly 15 minutes, with necessary water breaks along the way, to climb the 80-meter tall metal towers to reach the top of the wind turbines.

While GE provides wind turbine maintenance across all nine wind farms in Pakistan using GE turbine technology, at eight of them, the company also provides balance of plant services, including power generation and electricity dispatch to the grid.

“After I did my first climb [a couple years ago], I thought, ‘Oh, this is difficult!’ But after a few times, I adjusted to it and now it’s fine,” recalls Fawwad, adding, “The way things are going, renewables will capture a larger share of energy generation in the years to come, not only Pakistan, but in the rest of the world as well.”

He said during his working experience at conventional power generation was quite different as there were separate specialist technicians for mechanical, electrical and instrumentation work. “That’s not the case with wind turbines.”

“Only one team goes up and must be an electrical and mechanical all in one. You need to perform the preventative maintenance and troubleshooting.”

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