Govt to improve renewable energy production: PM

ISLAMABAD: Government on Tuesday decided to amend renewable energy policy 2006 to improve contribution of renewable power into the existing energy mix currently tilted towards oil and gas-based electricity generation.

A meeting of the Cabinet Committee on Energy, led by Prime Minister Shahid Khaqan Abbasi, decided to introduce ‘suitable’ amendments in the existing policy framework in order to address various issues relating to power tariff.

“The meeting discussed threadbare various policies including power co-generation by sugar industry and the renewable energy policy 2006,” a statement said. Minister for Power Ahmed Leghari will hold a press briefing on Wednesday (today) regarding the policy decisions taken during the meeting.

Thermal power sources account for 64 percent of the country’s total installed electricity generation capacity, while hydropower sector has the second major source with 30 percent share in energy mix and nuclear power production holds a six percent share.

Though the share of wind power in the country’s energy mix rose to 1.23 percent, there is a need of boost to meet the five percent target set by the government till 2030. Analysts believed that change in tariffs determination model would encourage investors to speed up alternative energy production.

They prefer market-based tariff rates over the current upfront or cost-plus tariff model. Government is pondering over market-based rate of returns for the entire energy sector. Currently, it is mulling a new framework for gas sector to rationalise tariffs.

Oil and Gas Regulatory Authority proposed that licenced gas utilities would receive market-based rate of return weighted average cost of capital model on the value of their net regulated fixed assets in operation.

The cabinet committee’s meeting also reviewed various power sector development projects, which are being set up to diversify the existing energy mix of the country including wind, solar and hydropower projects. Minister of State for Petroleum Jam Kamal Khan, secretaries of concerned divisions, Managing Director Pakistan State Oil and senior officials attended the meeting.