Recent experience in California has shown that changes in incentives have a huge impact on residential adoption of solar power technology. Since the introduction of NEM 3.0 last year, new rooftop solar business in California has dramatically slowed. New residential solar installation applications have plunged 80%, according to Cal Matters. This has driven many solar installers out of business. The business that remains is mostly focused on adding batteries to existing solar installations.
California Net Energy Metering (NEM 3.0) was launched last year after heavy lobbying by the state's utility companies like PGE and SoCal Edison. It has reduced payments for the excess power exported by the consumer to the grid by 75%. This change means that the consumer is better off with storage batteries to maximize self-consumption of the power generated by the solar panels. Companies such as Tesla Solar with its PowerWall 3 battery are the main beneficiaries of this change.
With rapidly falling solar panel prices, Pakistan is experiencing a
solar power boom. The country imported some 13 gigawatts of solar modules in the first six months of the year, making it the third-largest destination for Chinese exporters, according to
Bloomberg. In addition, there is approximately 2.2 gigawatts (GW) of net-metered rooftop solar PV capacity connected to the grid by June 2024, according to
IEEFA.
What is likely to happen to this
solar boom as Islamabad considers changes to its
net metering policy? A recent study published by the Institute for Energy Economics and Financial Analysis (
IEEFA) attempts to answer this question.
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Net Metering vs Net Billing Payback Period in Pakistan. Source: IEEFA
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There are several proposals under consideration by the Pakistani government to change its net metering policy. All are designed to significantly reduce payments to the consumer for energy exported to the grid. One of these proposals likely to be adopted is to switch from "Net Metering" to "Net Billing".
Net metering transactions are usually one-to-one, so the credits are often equal to the retail rate of electricity (aka what you pay). Net billing credits are often equal to the wholesale rate of electricity (aka what your utility pays), which is less than the retail rate, according to
Energy Sage. Utilities tend to oppose net metering programs, so alternative compensation programs are increasingly being used.
Analysis by Haneea Isaad, an Energy Finance Specialist at
IEEFA, shows that the switch from net metering to net billing would still reduce the payback period for 5kW to 25kW solar systems combined with 50% to 70% self-consumption. She concludes that the payback period will be well under 4 years for a system that has a life of 25 to 30 years. It is better than the 5-year payback period in California under NEM 3.0.
Would consumers without solar be stuck with high electricity bills? It is quite likely because capacity charges paid to independent power producers (IPPs) accounted for 62% of energy expenditure in Pakistan for the 2023-2024 fiscal year. For the 2024-2025 fiscal year, 64% of the total power purchase price is expected to be fixed capacity costs. Lower consumption of grid electricity will result in a disproportionate impact on consumers who rely entirely on grid power.
Higher levels of self-consumption closer to 100% would require larger batteries which are still quite expensive in Pakistan. This is likely to change as traditional lead-acid battery makers switch to lithium ion batteries in the country. Recent launches of
electric vehicle assembly plants in Pakistan are expected to boost the lithium-ion battery production and bring down prices in the country in the coming years, according to
Mordor Intelligence.
Comments
https://english.aaj.tv/news/330365159/budget-2024-25-production-of-solar-panels-inverters-and-batteries-becomes-cheaper
According to the finance bill, the government has eliminated all taxes on machinery and equipment used in the manufacturing of lithium-ion batteries, most of these were subjected to taxes ranging from 5% to 20%.
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Pakistan’s energy system strained by surge in solarization, battery tech
https://www.thenews.com.pk/print/1215486-pakistan-s-energy-system-strained-by-surge-in-solarization-battery-tech
ISLAMABAD: The rapid solarization and advancements in battery technology are increasingly challenging Pakistan’s existing energy system.
The influx of over 7,000 megawatts of imported capacity, coupled with some industrialists and bulk consumers installing in-house plants of up to 1.5 megawatts, threatens to disrupt long-term agreements with Independent Power Producers (IPPs).
This situation is exacerbated by mounting frustration among power consumers, who are being burdened with substantial multi-billion-rupee capacity charges on their monthly bills.
The provincial governments, especially Punjab and Sindh’s distribution of solar panels to the public, will further pressurise the system, as they will now be drawing less from the grid and so the burden of capacity charges will increase and ultimately the tariff, which will further take away consumers from the grid power.
“Various bulk consumers have done aggressive solarization, even they installed capacity of up to 1.5 megawatts and have kept the grid at backup,” Chairman Nepra Waseem Mukhtar said while presiding over a public hearing on Wednesday adding, “It’s [solarization] a threat.”
The Nepra chairman said that this 7,000 MW imported solar capacity is not for only rooftops, bulk consumers are also installing their big capacities. He also tasked the CPPA with conducting a study on solar energy usage, mapping and submitting a report to Nepra.
Central Power Purchasing Agency (CPPA) while pleading the case on behalf of Discos reported that electricity consumption in June 2024 was 10 percent lower than the reference period consumption, while two percent less than last year.
Waseem Mukhtar said that the government has launched a study to determine if Pakistan requires additional power generation capacity. He emphasized the need for a logical approach to adding more electricity to the national grid. The study is also evaluating that Commercial Operating Dates (CoDs) for some plants may be postponed, he said, mentioning that the study will determine which plants can be retired early.
https://www.canarymedia.com/articles/solar/california-slashes-payments-to-new-rooftop-solar-customers
With its new plan, the CPUC aims to allow all customers to earn enough money from their rooftop-solar systems to pay back the cost of installing them within nine years. That’s a longer payback period than the average of five to seven years under the current net-metering scheme.
But solar groups and some consumer advocates say that the CPUC’s calculations are flawed, and that the complexities and uncertainties of the new net-billing structure could push payback periods beyond that nine-year target. They also warn that companies that finance solar installations will be leery of lending to projects under the new regime, potentially restricting the market even further.
In a memo last week, pro-rooftop-solar group Save California Solar highlighted how dramatic the reduction in export values would be for customers of California’s three big utilities compared to reductions adopted in recent years in other states.
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One of the biggest uncertainties surrounding the CPUC’s changes is whether they’ll successfully encourage far more customers to add batteries that can store solar power and then export it when the grid needs it most. Finding ways to store excess solar generated at midday and save it for hot summer evenings, when California faces increasing risk of grid shortfalls, has become a central part of the state’s clean energy policy for utility-scale solar as well as distributed solar.
That’s a much different set of challenges than when California’s net-metering policy was first enacted in 1995, CPUC President Alice Reynolds said at Thursday’s meeting. “During the daytime, the electric grid is now powered largely by renewable systems both large and small,” she said. “There are even moments when we need to curtail” — or order large-scale solar systems to stop producing power — “because we have too much on the grid at once.”
The CPUC’s new structure is meant to make batteries more valuable than solar alone and enable solar-plus-battery installations to earn back their costs in between eight and nine years, slightly less time than solar-only installations. Exports of solar power to the grid during high-demand evening hours in summer months will be compensated at levels higher than current retail rates, providing battery owners an opportunity to speed up payback.
The CPUC’s decision will also require all new rooftop-solar owners to enroll in “electrification rates” that charge far more for electricity during peak hours and far less during hours when grid demand is lower. (The rates are intended to encourage people to electrify their homes and stop using fossil gas, hence the name.) Batteries could allow solar-equipped homes to take advantage of these highly differentiated hourly rates, so they can buy from the grid when rates are low and use their own stored rooftop power when rates are high.
https://arynews.tv/electricity-tariff-for-pakistan-residential-consumers-july-2024/
ISLAMABAD: The federal cabinet approved significant increase in the electricity tariff for residential consumers using 100 to 500 units per month, ARY news reported.
According to the details, the new basic tariff is fixed at Rs 48.84 per unit, which will increase to Rs 57.63 per unit after sales tax. With adjustments and other taxes, the maximum electricity tariff will exceed Rs 65 per unit.
As per the decision taken by the federal cabinet, the monthly tariff for consumers using 1 to 100 units is proposed to Rs 23.59, while those using 101 to 200 units will have to pay Rs 30.07 per unit.
Similarly, the tariff for those consumers using 201 to 300 units will increase to Rs 34.26, and those using 301 to 400 units will have to pay Rs 39.15 per unit.
The consumers using 401 to 500 units will be charged the most as they will have to pay Rs 41.36 per unit
Pakistan’s power sector caused a Rs403 billion loss in FY2022-23, revealed the National Electronic Power Regulatory Authority (NEPRA) report earlier.
The progress report of the power distribution companies including K-Electric was released by the NEPRA, indicating nine distribution companies including K-Electric failed to achieve 100pc recovery.
The line losses and low recoveries caused a loss of Rs403 bln to the national kitty, the report said. The report highlighted that the companies did not buy the electricity as per the assigned quota.
The companies carrying out loadshedding ‘deliberately’ as they are not buying electricity as per their quotas, the report said.
https://www.mordorintelligence.com/industry-reports/pakistan-solar-energy-market#:~:text=According%20to%20the%20International%20Renewable,the%20percentage%20of%20solar%20energy.
Pakistan Solar Energy Market Analysis
The Pakistan Solar Energy Market size in terms of installed base is expected to grow from 1.41 gigawatt in 2024 to 9.53 gigawatt by 2029, at a CAGR of 46.55% during the forecast period (2024-2029).
Over the medium term, increasing adoption of solar PV systems, the declining price of solar panels and installation costs, and rising environmental concerns about the use of fossil fuels are the factors driving the market's growth.
On the other hand, the market is expected to be hampered by issues like transmission and distribution losses, a need for a solidified renewable energy policy, and unpredictability in the continuity of power supply.
However, Pakistan has abundant solar irradiance and receives solar energy almost yearly. This factor presents a phenomenal opportunity to exploit solar energy from the most irradiated sites in the country, combined with foreign investments. Additionally, the off-grid supply through micro- and mini-grids to electrify rural communities of the country and the integration of renewable energy sources in generation, transmission, and distribution systems are some factors expected to create opportunities for the market in the future.
Pakistan Solar Energy Market Trends
The Utility Sector is Expected to Dominate the Market
Solar energy converts energy from sunlight into electricity directly using photovoltaics (PV) or indirectly using concentrated solar power.
Due to the falling cost of solar modules and the number of upcoming projects, the utility sector will likely be the most significant part of the Pakistani solar energy market over the next few years.
The Pakistani government has established lofty objectives, such as 30% of the nation's power coming from renewable sources by 2030. Through the Alternative Energy Development Board, the government is attempting to construct solar power facilities nationwide to meet these objectives.
According to the International Renewable Energy Agency (IRENA), Pakistan's total solar installed capacity was 1,244 megawatts as of 2023, an increase of 17% compared to 2021. The country's government has proposed several efforts to raise the percentage of solar energy.
In December 2023, Orient Energy Systems and JA Solar announced they completed Pakistan's first n-type utility-scale photovoltaic power plant project. The project adopts JA Solar's n-type high-efficiency modules, which have a capacity of 26 megawatts. It is installed on the premises of Lucky Cement plant, Pakistan's largest cement manufacturer.
In March 2024, Hanersun Technologies agreed with My Energy, a local company, to construct a 500MW solar system in the country. The project is expected to have an investment of around USD 700 million.
Hence, with government support, these projects are expected to make the utility sector the dominant force in Pakistan's solar energy industry in the coming years. Source: https://www.mordorintelligence.com/industry-reports/pakistan-solar-energy-market
Residential: The largest consumer of electricity, accounting for 47% of total electricity consumption in 2021–2022. The average household consumes 2,469 kWh per year.
Industrial: Consumed 28% of total electricity consumption in 2021–2022.
Commercial: Consumed 7% of total electricity consumption in 2021–2022.
Agricultural: Consumed 9% of total electricity consumption in 2021–2022.
Other sectors: Consumed 8% of total electricity consumption in 2021–2022.
Pakistan's electricity is mainly generated by fossil fuel-based thermal power plants, which account for 62% of the total electricity generation. Hydroelectric power plants account for 26% of the total annual electricity.
https://finance.gov.pk/survey/chapter_24/14_energy.pdf
https://www.mdpi.com/2075-5309/11/11/566#:~:text=Pakistan%20is%20among%20those%20countries,7%5D%20(Figure%201).
@ArifHabibLtd
Power Generation drops 17.4% YoY in Aug'24
(Grid) Power generation declined by 17.4% YoY to arrive at 13,179 GWh (17,714 MW) during Aug'24, compared to 15,959 GWh (21,450MW) during SPLY. Moreover, on a MoM basis, power generation witnessed a dip of 11.4%. For 2MFY25, power generation fell by 8.9% YoY to 28,059 GWh (18,857 MW) compared to 30,798 GWh (20,697 MW) in the SPLY.
During Aug’24, the actual power generation was 13.1% lower than the reference generation. This decline in generation is expected to result in higher capacity charges for the 2QFY25 QTA.
https://x.com/ArifHabibLtd/status/1836714300620337340
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Chinese solar panel boom threatens Pakistan’s debt-ridden grid
https://www.ft.com/content/69e4cb33-3615-4424-996d-5aee9d1afe19
Businesses in Pakistan are racing to cover their factory rooftops with ultra-cheap Chinese solar panels, after a surge in electricity prices that has made the state-owned power supply among the most expensive in South Asia. “Every bit of space I have, even if it’s a few feet, I want it covered in solar panels,” said Khawaja Masood Akhtar, chief executive of Forward Sports, whose factory near the Indian border is one of the world’s largest makers of footballs and a rare example of a successful export business. His company had already doubled the level of solar in its energy mix to 50 per cent over the past two years, in response to pressure to go green from Adidas, which contracts Forward to churn out millions of balls each year.
Akhtar is now ploughing a chunk of last year’s profits into importing another haul of panels from China to lift the share of solar supply to his operations to 80 per cent by next April, to blunt the impact of soaring tariffs for state-provided power. “It’s the only way we can beat our competitors” in China and India, he said. “Allah has given us this gift to get out of this mess.” China is also involved on the other side of the “mess”. In order to put an end to widespread electricity shortages a decade ago, the Pakistani government drew in billions of dollars from Chinese and other lenders to its power sector with promises of sovereign-backed, dollar-indexed returns and commitments to pay for even unused electricity. Financing mostly flowed to the coal-fired plants, and power tariffs in Pakistan have more than doubled over the past three years alone, as the cash-strapped government scaled back subsidies and passed the capacity payments made to power producers on to consumers. In response, moneyed Pakistanis have capitalised on the country’s punishingly harsh sunlight by importing some $1.4bn worth of Chinese solar panels in the first half of this year, making it the third-largest national destination in the world, according to data compiled by BloombergNEF. Shimmering blue panels now sit atop a vast array of factories, high-end households, hospitals and mosques.
Irteza Ubaid, chief operating officer of Shams Power, a Lahore-based importer, said that multinational companies in Pakistan, including Coca-Cola, Mondelez and Hyundai, are gobbling up the panels he imports from China, as they chase savings of up to 70 per cent on their electricity bills. The federal government sees the switch to solar as being in the country’s environmental interests, as climate change has brought more extreme weather, including deadly heatwaves and floods, which caused the deaths of more than 1,500 in 2022.
But the mass adoption of solar panels also risked making the power provided by the Pakistani grid “unaffordable”, Awais Leghari, the energy minister, told the Financial Times. “Demand is shrinking off the grid. That’s a big concern for us.” Earlier this year, the ministry complained that “solarisation has grown too fast”, as a result of a policy to buy some excess solar power from households and industry at above-market prices. A remaining estimated 30mn low-income consumers who cannot afford the new solar panels or lack the rooftop space now face rocketing prices for the state-owned power supply.
By Ryan Cooper, managing editor at The American Prospect, and author of the book "How Are You Going to Pay for That?: Smart Answers to the Dumbest Question in Politics."
No need for expensive imported fuel when your energy is coming from the sun.
https://heatmap.news/economy/pakistan-solar
Pakistan imported a whopping 13 gigawatts of solar panels, mostly from China, in just the first half of 2024, mostly for rooftop installations for homes and businesses. That’s a mind-boggling amount of new solar for a country that only had about 50 gigawatts of installed generation capacity in total in 2023.
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Fuel imports are one of the largest expenses for even prosperous countries. For places like Pakistan, they are a punishing economic drain. Paying for vast amounts of imported coal, gas, and oil in scarce foreign currency is hard enough in good times, but it’s disastrous when one’s currency has depreciated by about 40% over two years.
Dirt cheap solar power could ameliorate or solve many of these problems at a stroke. Panels are now so cheap, even Pakistan can afford to import them by the millions — an expense, yes, but a one-time one. And while solar is inherently intermittent, and therefore not a solution to Pakistan’s reliability problems, batteries are also plummeting in price — down about 90% between 2010 and 2023 — and can help balance out supply. Cheaper batteries also mean cheaper EVs, with (as usual) Chinese models coming out at bewilderingly low prices. And because Pakistanis mostly drive motorcycles (often manufactured domestically) over relatively short distances, electrifying the personal vehicle fleet there will be far cheaper than in America or Europe; vastly smaller batteries require vastly simpler charging infrastructure.
If all goes well, this will free up vast amounts of economic capacity for Pakistan to invest in domestic development. Businesses will have stable, reliable power supplies that will justify more investment. Households will be able to upgrade their insulation, install heat pumps, and generally spend more on things other than energy. The government will be able to upgrade legacy transmission lines to accommodate solar production from the remaining hydro and nuclear plants.
Finally, of course, there is the climate benefit. Pakistan is one of the countries most threatened by climate change. Summer heat waves are bad and getting worse, to the point where murderous wet bulb events are increasingly likely. Catastrophic warming-fueled storms in 2022 caused the worst flooding in the country’s history, inundating about a third of Pakistan’s land area, killing nearly 2,000 people and causing billions of dollars in damages.
In short, a path to economic development will be opened. It is by no means guaranteed, but it will be a heck of a lot easier than trying to dig out from under the debt mountain of the collapsing coal-powered system. Look around the developing world and you’ll find there are a great many nations in similar situations.
https://www.evwind.es/2024/10/02/pakistan-emerged-as-second-largest-market-for-chinese-photovoltaic-products/101434
Pakistan has emerged as a significant new market for Chinese photovoltaic (PV) companies, aligning with its path toward energy transformation.
According to statistics from the China Photovoltaic Industry Association (CPIA), in the first half of 2024, Asia overtook Europe as the largest export destination for PV products and Pakistan has become the second-largest market for module exports after Europe.
During the same period, China exported inverters worth a total of RMB 1.714 billion to Pakistan. In August alone, the total value of inverter exports to Pakistan reached 326 million yuan, showing a year-on-year surge of 429.04%. And shimmering blue panels now sit atop a vast array of factories, households, hospitals and mosques.
The surge in exports of photovoltaics and supporting products reflects the urgency of turning to new energy power generation in Pakistan, China Economic Net reported on Tuesday.
“Electricity prices continue to rise; thus, people are trying to find their own way out,” Abbas a Pakistani trader said at the Investment and Trade Forum for Cooperation between East and West China.
As of June 2023, the installed capacity of solar power in Pakistan stood at 630 megawatts, namely 1.4% of the overall installed power capacity, which has a huge room for improvement.
In terms of natural conditions, according to the World Bank’s Global Solar Atlas data, taking Balochistan with good lighting conditions as an example, the average annual total photovoltaic output power of a 1KW household photovoltaic system can reach 1990kWh (corresponding to approximately 1990h of sunlight), which is approximately 41% and 59% higher than New Delhi, India and Shandong Province, China, respectively; the Global Tilted Irradiance (GTI) can reach 2536.5KWh/square meter, which is approximately 36% and 61% higher than New Delhi, India and Shandong Province, China respectively.
In terms of policies, for the past few years, the Pakistani government has highly supported the development of renewable energy, setting a strategic goal of increasing the share of renewable energy and alternative energy in Pakistan’s electricity market to 20% by 2025 and to 30% by 2030.
The IGCEP2047 released by NEPRA showed that Pakistan’s PV installed capacity will achieve leapfrog growth in the next few years. It is expected that by 2030, the PV installed capacity will reach 12.8GW, and by 2047 it is expected to reach 26.9GW. According to calculations, in order to achieve the 2030/2047 goals, the average annual new PV installed capacity needs to reach 1.65/1.07GW respectively.
Businesses in Pakistan are racing to cover their factory rooftops with reasonably priced Chinese solar panels. “Every bit of space I have, even if it’s a few feet, I want it covered in solar panels,” said Khawaja Masood Akhtar, chief executive of Forward Sports, whose factory is one of the world’s largest makers of footballs. His company had already doubled the level of solar in its energy mix to 50% over the past two years. Akhtar is now ploughing a chunk of last year’s profits into importing another haul of panels from China to lift the share of solar supply to his operations to 80% by next April.
https://www.unido.org/stories/pakistans-farmers-feel-solar-power
In the photo (above), a smallholder farmer from Bhagwela, Rahim Yar Khan, in Punjab province, inspects her solar tube well, a type of water pumping system that utilizes solar energy to bring up water from underground sources, such as wells or boreholes. It is an eco-friendly and cost-effective alternative to the diesel or mains electricity-powered pumps commonly used in agricultural irrigation.
With the solar-powered tube well irrigating her farmland, the farmer has cut costs and improved her crop yields. She is one of the nearly 500 women and men engaged in farming and running small enterprises in the provinces of Punjab and Sindh who UNIDO has helped apply renewable energy solutions for productive uses. The National Rural Support Programme (NRSP), a leading microfinance and development organization in Pakistan, provides loans for the procurement and installation of renewable energy solutions, and UNIDO covers the interest payments so that the loans are interest-free.
Another farmer, Kaneez Fatima, from the Sargodha district in Punjab, expressed her thanks. "I own a small piece of land, and access to water and electricity is always a problem. I received UNIDO's assistance through the NRSP - an interest-free loan to purchase a 2KW solar panel to run a tube well to irrigate my land. The installation process was extremely smooth, according to the land irrigation needs and water level."
The electricity costs for beneficiaries have drastically dipped. A post-installation impact survey conducted by the NRSP found that 80% of respondents reported savings of of up to 15,000 Pakistani rupees (around €50) a month, with the other 20% saving even more.
Small farmers and entrepreneurs have been suffering from fuel price hikes in recent times. Agriculture and small and medium-sized enterprises (SMEs) are the mainstays of Pakistan's economy, providing jobs for around two-thirds of the population.
Rashid Bajwa, CEO of the NRSP, laments the impact of the enegy crisis on the economy. "The majority of our population generates income that is barely enough to meet their needs and the situation is getting worse," says Bajwa. "We need to adapt and improvise, and alternative or green energy just might be the solution that will enable our SME sector to sustain and grow."
The farms and businesses supported by UNIDO have not only reduced costs by switching from diesel, they are also helping save the climate. With a capacity to produce 1,825 MWh of clean energy a year, the project beneficiaries will be able to avoid more than 800 metric tons of CO2 emissions annually.
Shah Jahan Mirza, Managing Director of the government agency, the Private Power and Infrastructure Board, commended UNIDO for introducing renewable energy technogology to smallholder farmers and small enterprises in Punjab and Sindh provinces. "These rural communities generally don't have funding to finance these systems. There are also doubts and misconceptions about these technologies, i.e. they are not reliable and very costly, or may not help. Providing interest-free loans is a breakthrough. UNIDO has taken a lead in this which will go a long way, as the people have now started using this technology. "
The UNIDO initiative is part of a bigger project, Sustainable Energy Initiative for Industries in Pakistan, funded by the Global Environment Facility (GEF). Collaborating with public and private partners, UNIDO has facilitated investments in energy efficiency and renewable energy in 50 industrial units. In addition, UNIDO has placed significant emphasis on capacity building, and has trained more than 625 professionals, including 30 women, in energy management systems and energy optimization.
The project has yielded significant results, implementing more than 12MW of renewable energy projects in the industrial sector, and thereby reducing over 17,000 metric tons of CO2 emissions.
https://www.reuters.com/business/energy/pakistans-biggest-private-utility-says-govt-power-deal-ends-prematurely-2024-10-10/
Government to save 411 billion rupees
Negotiations with more power producers underway
IMF bailout talks influenced decision to revisit power deals
KARACHI, Oct 10 (Reuters) - Pakistan's government has ended power purchase contracts with five private companies, including one with the country's largest utility that should have been in place until 2027, to cut costs, officials said on Thursday.
The news confirms comment from Power Minister Awais Leghari to Reuters last month that the government was re-negotiating deals with independent power producers to lower electricity tariffs as households and businesses struggle to manage soaring energy costs.
"We studied these agreements and we decided what plants we need and what plants we don't need," Leghari told a news conference in Islamabad on Thursday, adding the termination of the take or pay agreements will save the nation nearly 411 billion rupees ($1.48 billion) in the coming years.
Take or pay is referred to as capacity payments in Pakistan where the government has to pay private companies irrespective of how much of the power they generate is transferred to its grid.
Negotiations have also begun with other power producers to revise their contracts, Leghari said, adding people would soon see the impact in their monthly bills.
"Our aim is to bring the tariff down," he said.
The need to revisit the deals was an issue in talks for a critical staff-level pact in July with the International Monetary Fund (IMF) for a $7-billion bailout.
Earlier on Thursday Prime Minister Shehbaz Sharif said Pakistan has agreed with five independent power producers to revisit purchase contracts. He said that would save the country 60 billion rupees a year.
Pakistan's biggest private utility, Hub Power Company Ltd (HPWR.PSX), opens new tab, also said the company agreed to prematurely end a contract with the government to buy power from a southwestern generation project.
In a note to the Pakistan Stock Exchange, it said the government had agreed to meet its commitments up to Oct. 1, instead of an initial date of March 2027, in an action taken "in the greater national interest".
https://www.cnet.com/home/energy-and-utilities/home-batteries-are-cheaper-than-ever/
The quoted battery prices have dropped to $1,133 per kilowatt-hour (kWh) of energy storage capacity -- a 16% drop from last year. Lower battery costs are a result of streamlined manufacturing processes, especially in China, and the decreasing cost of materials. In fact, 70% of the world's lithium-ion cell production happens in China, according to IDTechEX.
As prices have fallen, consumer interest in home battery products has increased. However, most people still prefer to purchase a battery with a solar panel system. According to the EnergySage report, 34% of US customers who bought a solar system chose to include a battery during the first half of 2024, a trend that is expected to continue to rise.
Which home batteries are the most popular?
In terms of popularity, Tesla and Enphaseremain the most quoted battery brands on EnergySage, exceeding 75% of the market share when combined. Tesla saw an 11% growth in overall market share within the past six months, likely due to the recent launch of the Tesla Powerwall 3, which more than doubles the power of the previous model.
Tesla's Powerwall 3 is also incredibly cheap for home battery standards. EnergySage says the current cost of the Powerwall 3 is $1,000 per kWh of storage. The Powerwall 3 has 13.5 kWh of energy storage capacity; that's about $13,500. But this doesn't include the cost of battery installation. We were quoted $16,551 for the cost of installing one Powerwall 3 on a home in Fort Mill, South Carolina, via Tesla's website. The estimate includes the cost of the battery, gateway device, accessories, installation and taxes.
Tesla and Enphase aren't the only battery brands out there that are fighting for space in the market. FranklinWH, SolarEdge, EG4 and SunPower are starting to take over what's left of the market. However, SunPower has discontinued its energy storage product and recently filed for bankruptcy.
Interest in home batteries
Consumer interest in home batteries has more than tripled year-over-year, according to EnergySage. This is especially apparent in California, where the battery and solar panel attachment rate has skyrocketed since the net billing changes in April. The attachment rate outside California also saw a 22% increase, especially in states that don't have consumer-friendly net metering policies like Tennessee and Georgia. This makes holding onto your excess energy more valuable than selling it to the utility company.
Owais Rawda explores what the most recent request for IMF climate funding means for power sector reform.
https://www.power-technology.com/comment/pakistan-to-reform-power-distribution-after-imf-meetings-minister-says/
At last week’s International Monetary Fund (IMF) Annual Meetings, Pakistan’s finance minister Muhammad Aurangzeb requested $1bn in funding from the IMF’s Resilience and Sustainability Trust (RST) to help mitigate the country’s climate risks and accelerate its energy transition. Established in 2022, the RST offers vulnerable low- and middle-income countries long-term concessional cash for climate-related spending.
Pakistan’s power sector circular debt, driven by inefficiencies in the power distribution network, crossed Rs2.66tn ($9.5bn) in May, according to a debt report released by the government’s power division. Meanwhile, citizens have suffered significant and frequent power outages in recent years, leaving millions without electricity.
The government’s faulty capacity payment contracts with independent power producers (IPPs) have come to light as the primary source of these challenges. Interest rates borne from private IPPs have not only worsened the debt crisis but spiked consumer tariffs, making electricity unaffordable.
In light of Aurangzeb’s request, coupled with multiple IPPs terminating their contracts with the government, the South Asian nation is now likely to announce significant reforms.
“These IPP payments had a detrimental effect on the overall quality of life for our citizens,” Awais Laghari, Pakistan’s minister for energy’s power division, tells Power Technology. “It is imperative that necessary steps are taken to resolve the issue.”
Without specifying the plans, he claims that the power division is currently evaluating options “through which the fiscal burden shared by the consumer, whether through taxes or debt repayments, can be optimised through various interventions that improves household economics and consumption at the same time”.
Laghari says that there are also plans to “unbundle electricity” and create a competitive market for energy, citing the recent introduction of an independent system and market operator (ISMO) as a step in this direction.
“This will ensure that a B2B [business-to-business] market for electricity can develop, which can eventually evolve into a B2B2C [business-to-business-to-consumer] market thereby providing greater options for consumers and lower prices through a competitive process,” he says.
The minister adds that the role of renewables in reforming the country’s power market will be imperative, “given their price advantage”. He believes that their ability to generate cheap electricity will “always put them ahead in any competitive market regime, making them critical to the success of the market.”
Following the IMF meetings, Laghari says that the government plans to “move forward actively” with the privatisation of electricity distribution companies and that “necessary improvements in governance are already underway”.
He believes that privatisation can enhance the efficiency of these companies, allowing them to remain a key player in the power market, which in turn will result in more affordable prices for consumers.
“Similarly, we continue to focus on investment in transmission to remove constraints so that lower cost electricity generated in the South can be moved across the country and overall consumer tariff can be reduced.”
About the author: Owais Rawda is a regulatory policy researcher that has written about the energy and technology industries.
https://www.weforum.org/stories/2024/10/distributed-solar-energy-emerging-economies/
Distributed solar energy and other green tech, is helping to transform energy from a commodity to a technology, enabling energy-independence in emerging economies like Pakistan.
Solar energy boosts economic growth by offering affordable energy, driving business expansion and increasing job opportunities.
Solar energy fosters greater energy autonomy, reduces political dependence on centralized systems, improves governance and contributes to lower carbon emissions.
Under the scorching sun in Lahore, Pakistan, the hum of factory machinery persists uninterrupted. Just a year ago, frequent power outages would have stopped production. Today, a collection of solar panels on its roof keeps everything running. This scene is one of thousands happening across buildings in Pakistan, marking a quiet but powerful shift in how emerging economies power their growth.
At Exponential View, we identify distributed solar energy as a key factor for the future, offering cheaper and more accessible electricity. As our research suggests, this grassroots transformation has the potential to redefine economic opportunities and provide energy independence for millions in developing nations, reshaping their futures.
Solar is changing energy from a commodity, like fossil fuels, to a technology, bringing two key benefits. First, as solar technology improves, its cost continues to drop. Between 2010 and 2023, the price of solar energy has fallen by 33.4% every time production has doubled. In contrast, fossil fuel prices are controlled by global markets and politics.
Second, solar panels let people generate power locally, giving them more control over their energy. Unlike fossil fuels, which depend on expensive, unstable grids and resources from other regions, solar power allows individuals to become more energy-independent.
As batteries become cheaper, this independence will grow and energy generation could become increasingly decentralized. Emerging economies are leading this transformation and Pakistan is one of the clearest examples this year.
Pakistan’s solar boom
Pakistan is now the third-largest importer of Chinese solar panels, buying an incredible 13 gigawatts (GW) in just the first half of this year. To compare, the United Kingdom is expected to add only 1.5-2GW of solar capacity this year and the United States added 32GW in 2023. This likely makes Pakistan the sixth-largest installer of solar panels in 2024 but locally, the impact is even bigger.
In six months, Pakistan imported solar capacity equal to 30% of its total power capacity, which was 46GW in 2023.
However, Pakistan’s regulator, NEPRA, only tracks grid-connected or officially registered installations. Geospatial data shows solar panels spreading across factories, homes and even government buildings, pointing to an under-the-radar revolution in energy production.
There’s a shiny new addition to Pakistan’s dusty agricultural heartland: rows upon rows of solar panels.
Bloomberg News
Fasih Mangi
https://financialpost.com/pmn/business-pmn/surprise-solar-boom-in-pakistan-helps-millions-but-harms-grid#:~:text=The%20flood%20of%20solar%20panels,cities%20and%20during%20cricket%20matches.
The flood of solar panels from China started in 2023, and turned into a deluge after Pakistan removed import curbs late last year, making it the third-largest destination for Chinese panels, according to BNEF. Now they’re being advertised on billboards in major cities and during cricket matches.
The frenzy wasn’t restricted to the energy sector: real estate companies and electronics firms started flipping panels, with the biggest traders bringing in up to 250 megawatts’ worth every month, according to Usman Ahmad, chief executive officer at solar distributor Nizam Energy Pvt.
Driving the demand were households and factories producing everything from cement to apparel, who have suffered frequent blackouts in the past due to the unreliable grid.
Speculation that the grid will collapse is “extreme,” but the reduction in demand is indeed a concern, Pakistan’s Power Minister Awais Leghari said in an interview. Utilities “have to be a little more sensitive to the demands of customers in terms of reliability and tariffs,” he said. “We all realize that the status quo can’t prevail.”
For Murtaza, the decision to switch to solar on his farm near Lahore was an easy one. It will take him less than a year to recover the cost of installing the panels, and his electricity bill has plunged by 80%, he said. With the savings, he’s able to plant three crops a year instead of two.
“I have never seen such a big change in farming. Ninety-five percent of farmland has switched to solar in this area,” he said, pointing to his photovoltaic array towering over piles of harvested corn cobs. The panels are now cheaper than the frames they’re supposed to be mounted on, so some farmers just lay them on the ground, he said.
Despite the hubbub, it’s hard to tell how much of the imported equipment has actually been installed due to a paucity of official data. A satellite data analysis carried out in April by Norwegian firm Atlas revealed around 400 solar plants across the country, clustered mostly in industrial hubs. But many more installations went undetected, the geospatial analysis firm said. Most panels have been deployed almost equally across homes, factories, and farms, solar distributors say.
The growth of solar in Pakistan has been interesting because it happened so fast and without any subsidies, said Jenny Chase, an analyst at BNEF. However, the boom is likely to be followed by a bust, she said.
For Pakistan’s government, dealing with the consequences of the solar frenzy and its aftermath, and maintaining the health of the grid and traditional power companies will be essential. For the country’s economy and the millions of people who can’t afford to install solar panels, a failing electricity network would be disastrous.
“The solar onslaught is happening in a very unsafe, very unregulated way,” said Amin Sukhera, chief executive officer of Sky Electric, a Pakistani solar firm. “The people who are running the grid, they do not know what kind of imbalance it’s creating when other people attach solar connections. I think it’s already a pretty sick grid. I fear it may get more sick.”
https://youtu.be/LT5UdLGy8fM
https://www.dw.com/en/deep-dive-the-hidden-solar-revolution-that-stumped-experts/audio-70856809
A little while back, energy analysts noticed something weird in the data they were combing through.
Pakistan’s national electricity grid data that is. There seemed to be a huge drop in demand for electricity. A drop of 10 percent since 2022. For a rapidly growing country of 250 million people, where the economy has also grown by 2 percent in the past two years, that just didn’t seem right.
Dave Jones: You just wouldn't expect that of an emerging country.
Dave Jones is one such energy analyst who was pretty puzzled by this trend.
Dave Jones: I work at a research organization called EMBER and I track the global electricity transition, heading up our global insights team and I'm based near London in the UK.
Dave and his team realized that just looking at Pakistan’s national grid data wasn’t going to give them all the answers. Because the electricity was coming from somewhere else.
It was coming from rooftops. Rooftops like Shafqat’s. And that kind of solar electricity generation wasn’t being captured in national statistics. It wasn’t really being recorded anywhere.
Dave Jones: And we heard stories about a lot of solar being deployed. So that's when we thought, right, there's probably a hole in the solar data here.
So, first things first, when you’ve got a hunch it could be solar, but there aren’t many hard datasets around, head to Google Earth to see for yourself.
Dave Jones: Oh my God, I had a lot of fun going through Google Earth! It was really hypnotizing just floating around and being able to see all of these solar panels from the satellite images that they have. And it's not on one or two houses in certain areas, like whichever urban area you went to, whether it was a house or block of flats or whether it was a factory or government building, you could see those solar panels on the image everywhere.
I had a look too, and Dave’s right, float over Islamabad Larkana, Lahore... and you’ll see the unmistakable little checkered grids atop homes, businesses, buildings big and small, left, right and center.
Dave Jones: It was unbelievable. Just the amount of solar panels on so many buildings spread throughout the whole of the country.
But how to find out just how much solar had made its way to Pakistan?
Dave Jones: Tracking how solar is developing and being deployed in different parts of the world is extraordinarily hard. A lot of the government stats are really delayed or even non-existent.
The renewable shift is happening so rapidly and, sometimes, randomly, most governments can’t track how much power is coming from where quickly enough to crunch official statistics.
There is one country with a very useful, up-to-date dataset though.
And that is China. The world’s number one manufacturer of solar PV modules.
Dave Jones: We also track the Chinese export agency data, which tags the solar panel exports for every country in the world up to the latest month. So really up to date data for over 100 countries across the world, and specifically in the case of Pakistan, it revealed that Pakistan was the sixth biggest installer of solar panels across the world. Which is quite a surprise!
The sixth biggest installer of solar panels in the world in 2024. That’s behind much bigger, much richer economies like China, the US, Germany, India and Brazil. And, obviously, ahead of nearly 190 other countries. That is huge news for Pakistan.
And the reason that can even happen of course is because of the incredible drop in the price of solar technology.
Dave Jones: It's come to that point now that for daytime electricity, it is a no brainer for people in Pakistan to go out there and to be doing this on the scale that they're doing it.
The price of solar PV modules has plummeted by 90% in the last 15 years alone.
December 05, 2024
Haneea Isaad
https://ieefa.org/resources/optimizing-pakistans-economy-renegotiating-power-purchase-agreements
Developing countries in Asia and Africa, riddled with excess capacity payments and a surplus of generation capacity, are using contract renegotiation to lower their economic burden and conserve the foreign exchange. In Pakistan, Independent Power Producers (IPPs) have allegedly made excessive profits by under-reporting efficiency gains and over-invoicing, thus necessitating complex power purchase agreement (PPA) renegotiations. Contracts with five IPPs have already been terminated, while 18 others face a possible conversion to a take-and-pay basis.
Renegotiations require both parties to offer concessions to arrive at a deal. For the five IPPs with terminated contracts, two publicly listed companies may have waived some receivables while taking the government’s offered settlement. Lalpir Power Plant, a 362 megawatts (MW) furnace oil-based plant located in Muzaffargarh, took a haircut of PKR7 billion. HubCo’s 1292MW furnace oil-based power plant was offered PKR36.5 billion in compensation, almost PKR20 billion less than the total company valuation as of June 2024.
Renegotiation of concession agreements is not an unusual practice in the power sector, especially under destabilizing economic conditions such as macroeconomic shocks. Ghana, like Pakistan, has struggled with energy sector reforms prompted by rising power sector debt and unpaid dues. The country recently underwent a similar situation, successfully renegotiating contracts with five IPPs, including debt structuring and conversion to a take-and-pay system.
The government in Pakistan has attempted PPA renegotiations in 1998, 2012, 2020, and now in 2024. IPPs allege that repeated contract renegotiations and coercive tactics will hurt investor confidence and future expansion opportunities in the power sector.
An examination of the PPA terms reveals that the incentives offered to IPPs have been overly generous with backstopped payment guarantees, dollar indexation, and high return on equity allowances, contributing to Pakistan’s ever-rising power sector circular debt.
Considering that the IPPs under review have paid off their debts and have earned reasonable returns on equity, contract termination or conversion to a take-and-pay basis is a reasonable proposition given Pakistan’s persistent economic struggles and foreign exchange shortage.
While renegotiation could allow the government to save scarce economic resources, the IPPs may also have a chance at quick compensation for unpaid dues or the ability to sell power to secondary markets once Competitive Trading Bilateral Contract Market (CTBCM) reforms are operationalized. However, the negotiation process should be commercial and transparent to ensure optimal outcomes.
https://profit.pakistantoday.com.pk/2024/12/09/in-an-industry-riddled-with-challenges-treet-battery-has-proven-its-mettle-can-they-seal-the-deal/
The battery sector is recovering and Treet has emerged as a strong contender in the industry. Now, it may be time to look for fresh capital, and an IPO is the way to go
Treet Battery hit the market at a time when the battery industry was just about to hit a slump. By the time Treet began to come out of its initial birthing pains, the industry was facing some steep challenges. Load-shedding was at an all time low, meaning people did not need to buy batteries for their UPS as regularly. The auto-industry was experiencing plummeting demand and car companies were regularly halting assembly. And on top of demand falling, there was an increase in lead prices and a devaluation of the rupee.
It was a disaster to put it mildly. Battery manufacturers that had been in the game for years found themselves floundering. In fact, the 2018-21 period marked the worst period for battery manufacturing in Pakistan. And here was a new entrant just a couple of years into its existence suddenly thrown into the deep-end.
Which is why it might come as a surprise to money that Treet Battery has come out the other end in pretty good shape. Not only has the company managed to become profitable, it has managed to increase its market share by taking away from bigger and older manufacturers like Exide and Atlas. In 2024, they earned a revenue of Rs 8.4 billion, giving them control of just under 12% of the overall market in only seven years of operations.
But there is a problem. Treet needs money. While their revenues have been increasing at an impressive rate during a difficult period for the industry and the economy, their debt costs are weighing them down. The answer to this problem is clear. Treet needs to raise more money, and perhaps the best option to do that is through an Initial Public Offering (IPO). Before we get to that, however, we must understand how Treet found itself struggling with this debt in the first place.
Other companies in Pakistan that manufacture lithium-ion batteries include:
Zhejiang Narada Power Source Co., Ltd.
Atlas Battery Limited
Phoenix Battery Ltd.
Exide Pakistan Limited
Li-Power Green Energy (Pvt.) Ltd.
https://propakistani.pk/2024/12/03/atom-power-launches-pakistans-first-locally-assembled-lithium-ion-batteries/#google_vignette
The company has started assembling lithium-ion cells at its factory in Karachi and will unveil its cutting-edge cell-level manufacturing facility by Q2 2025, marking a significant milestone in the country’s industrial and energy sectors. That being said, in phase 2, these lithium-ion cells will be produced using locally purified graphite and other materials, enhancing both the sustainability and efficiency of the product.
Atom Power is a Wavetec subsidiary which is a key player in the tech industry with 3 decades of experience delivering successful, intelligent customer experience and self-service solutions to more than 70 countries worldwide. Wavetec’s expertise in building scalable, reliable solutions adds a crucial layer of credibility to Atom Power’s ambitious local and international growth plans.
“At Atom Power, we are committed to providing, made in Pakistan, smart, reliable, and environmentally friendly energy storage solutions that are accessible to all,” said Waqas Ahmad, CEO of Atom Power. “With our local manufacturing capabilities, we can ensure that these products meet the highest standards of quality and reliability while adapting quickly to market needs.”
The development of these advanced energy-efficient batteries is the result of extensive research and innovation led by a team of material scientists and chemical engineers under the guidance of Dr. Kamran, Head of R&D at Atom Power. Dr. Kamran, who holds a PhD in Energy Storage Technology, emphasised, “Our R&D team is focused on sourcing materials locally, a strategy that will reduce reliance on imports and support Pakistan’s growing economy. Early progress in this area holds great promise for Pakistan’s position in the global energy market.”
Atom Power’s locally assembled lithium-ion batteries will not only drive the transition to a sustainable energy future but will also enhance the efficiency of renewable energy systems, particularly solar power storage. These high-capacity, long-lasting batteries will be vital for industries, businesses, and households, helping to reduce energy costs, increase reliability in off-grid regions, and make a positive impact on the environment.
One of the major concerns for customers when purchasing batteries is related to warranty and support. Atom Power addresses this by having both its plant and R&D operations based in Pakistan. This strategic setup ensures excellent customer service, faster response times, and the flexibility to adapt to market conditions quickly, giving customers the confidence that they are supported by a local, trustworthy partner.
This ground breaking achievement not only represents a technological leap but also positions Atom Power as a leader in Pakistan’s push for energy security, industrial growth, and environmental sustainability. By embracing innovation, Atom Power is committed to contributing to sustainable energy solutions, fostering job creation, and advancing Pakistan’s technological capabilities.
With this pioneering effort, Atom Power becomes the first Pakistani company to locally manufacture lithium-ion cells, taking a crucial step toward a self-sufficient and energy-secure future.