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Business

May 20, 2017

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Alternate energy sector attracts $368 million

Alternate energy sector attracts $368 million

KARACHI: Pakistan’s renewable energy sector attracted another potential investment of $368 million as five intending power producers have approached National Electric Power Regulatory Authority (Nepra) seeking generation licenses for a cumulative generation of 266.5 megawatts.

Pakistan is a developing economy having a constant growth in industrialisation, coupled with a constantly rising demand for electricity. The non-availability of natural resources for expansion of the power sector has widened the gap between demand and supply.

The government of Pakistan has clearly articulated its support for the development of renewable energies.

Gul Ahmed Electric Limited and Metro Wind Power Limited have proposed to setup wind farms in Sindh of 50MW and 60MW, respectively with an estimated investment of $90 million and $110 million.

The wind power programme in Pakistan was initiated around ten years ago by installation of wind measuring stations in the coastal areas of Sindh. The energy potential of 346,000MW in the country is estimated by National Renewable Energy Laboratory, US.

The government is currently looking to build wind farms in the wind corridor, some of which are regions where electricity supply through the national grid has been a challenge. At present, a total of 309MW of wind power projects are in their operations phase.

Hamza Sugar Mills and Mehran Energy Limited plan to install co-generation/bagasse power plants of 30MW and 26.5MW, respectively with an estimated investment of $30 million and $35 million.

There are already many co-generation plants operating in Pakistan and India and the operating experience of those plants, in synchronisation with the sugar mill operation, has been smooth and without any hitch.

It is estimated that approximately 3,000MW can be generated by sugar mills located in various parts of the country.

Since Bagasse based generation offers direct replacement for furnace oil/diesel-based generation, it offers a clear price advantage.

Zorlu Solar Pvt Ltd has sought license for a 100MW solar generation facility with an estimated cost of $103 million.

The demand for electricity has continued to increase by outpacing the growth rate of the economy. The shortfall at times crosses 6,000MW and this is the time when urban areas have 8-12 hours of load shedding and small cities/rural areas have 18 hours of load shedding.

The industry, has does not receive gas for 2-3 days a week during winters. Pakistan’s major electricity sources at present are thermal and hydro generation, meeting approximately 96 percent of the country's annual electricity demand.

The primary thermal generation fuels employed are furnace oil, high speed diesel and gas. While the fuels are produced domestically, demand for them already outstrips supply by a considerable amount.

Oil imports are already a significant burden on the national exchequer and the increasing import bill continues to exert further pressure on the foreign exchange reserves.

Therefore, systems for alternative fuels and technical management should be strengthened to solve these problems.

 

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