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June 5, 2019

Solar power sector to receiveRs3.5 billion investment from IPPs

KARACHI: Pakistan’s fast-growing solar energy sector is all set to attract another $24 million from four independent power producers that applied for generation licences with the government, it was learnt on Tuesday.

Four independent power producers (IPPs) have approached the National Electric Power Regulatory Authority (Nepra) seeking generation licences to set up solar power plants with cumulative 30 megawatts of production capacity, an official document available with The News showed.

Shams Power (Pvt) Limited planned to develop 1.9MW of solar generation setup with an estimated investment of $1.2 million. K1 Solar Power Lahore (Pvt) Ltd intended to set up 15MW of solar power plant with an estimated investment of $14.57 million. Nizam Power (Pvt.) Ltd sought licence for an onsite solar generation setup of up to 7.7MW with an estimated investment of $5.03 million. Solis Energy Gen-I planned to set up 5.5MW of generation plant with an investment of $2.75 million, according to the document. All these power producers would sell electricity to bulk buyers, including industrial units and real estate sites.

The government planned to generate around 18,000MW of renewable energy by 2030 with solar power generation having more than doubled year-over-year last year.

In 2018, the cumulative installed solar energy generation capacity in Pakistan was estimated at 1,568MW compared to 742MW a year earlier, representing an addition of more than 800MW in a year, the International Renewable Energy Agency said in a latest report.

Distribution channels for solar panels are also expanding to serve on-grid as well as off-grid local demand.

The cabinet committee on energy in February approved proposals from the ministry of energy (power division) for all future renewable energy projects to be treated under the Renewable Energy Policy 2019. Various stakeholders are currently reviewing the new policy, whose guiding principles have already been approved by the committee

The cabinet committee on energy decided to permit renewable energy projects that have letter of support issued by the Alternative Energy Development Board to proceed towards achieving their required milestones in accordance with the Renewable Energy Policy 2006.

Analysts said the decision marks a positive effort by the government and favours renewable energy deployment in the future.

Pakistan’s per capita electricity consumption is comparatively lower than other countries in a similar development stage. The consumption of electricity mostly depends on human development index and income levels.

Analysts said small and medium-sized (50-100MW) renewable energy-based power projects would continue to be feasible even if there is a surplus energy.

Corporate sector as well as real estate developers are opting for solar power generation in Pakistan. The reason for popularity of solar power are manifold. It’s unique in its flexible and clean nature, which allows innumerable applications. It is now also increasingly the lowest-cost power generation technology. Analysts said the solar industry has done its homework in bringing cost down and providing the facilities to bolster the energy sector. “Now policymakers should embrace this opportunity by quickly creating the right regulatory frameworks for solar generation and power storage,” an energy expert said.