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June 29, 2020

‘Jhimpir-Keti Bandar wind corridor alone has potential of producing 11GW’

Karachi

June 29, 2020

Weak grid infrastructure, lack of coordination mechanism, inconsistent regulatory and policy decisions, and the limited ability of the Sindh government are four key barriers that are hampering the growth of renewables in the province.

These were the key findings of a recent study titled ‘Fostering Renewable Energy Development in Sindh: Identification of Impediments and the Road Ahead’. The World Wind Energy Association (WWEA), a Bonn-based international non-profit association representing the wind power sector worldwide, had conducted the study.

The study said that the weak grid infrastructure is the most pressing issue restraining the growth of renewable energy in Sindh. “Continuous tripping and forced shutdowns are frequent for operational projects, and under-construction projects are being delayed due to insufficient evacuation facilities.”

The WWEA study also observed that the power system in Pakistan is centralised, where the energy under the federal government has a monopoly over power evacuation, offtake and distribution. “The Sindh government has not been able to develop an institutional set-up that deals with power purchase and distribution.”

The nonprofit said in the report that policymakers at both levels have failed to develop consistent and coherent operating procedures and power procurement plans based on the existing policies.

“More than 2,500MW of LOIs [letters of intent] issued by the Sindh government are not included in the National Transmission & Despatch Company’s (NTDC) grid development plan, as they were issued without the involvement of the grid operator.”

The report said that arbitrary decisions by the Centre have also significantly slowed the progress of renewable energy in Pakistan, and that the Cabinet Committee on Energy’s 2017 decision stopped renewable energy projects, including those initiated by Sindh under feed-in-tariff framework, while coal- and RLNG-based plants were allowed development.

The study found the responses of government officials measured and divided. “While the officials at federal level believe a significant progress has been made in terms of renewable energy deployment and bottlenecks are being removed gradually, respondents from the provincial government contend that more renewable energy could have been added if the previous federal government had not made lopsided policy decisions.”

Overviewing the power sector in Pakistan, the study said that as of December 30, 2018, the total installed capacity of the country stood at 36,297MW, of which 33,413MW was connected to the system of the NTDC and 2,884MW to K-Electric, a vertically integrated power utility company.

The report said that the power mix of the NTDC system was dominated by 20,446MW thermal generation capacity, which included natural gas, residual fuel oil, coal and high-speed diesel projects, while other sources included hydropower, renewables (wind, solar and bagasse) and nuclear, having installed the capacity of 9,732MW, 1,890MW and 1,345MW respectively.

Discussing renewable energy in Sindh, which holds promising renewable energy potential, particularly in the form of wind and solar resources, the study found that the Jhimpir-Keti Bandar wind corridor alone has the potential of producing 11GW.

“The availability of sizeable barren land and presence of sound solar radiation makes the province ideal for utility-scale solar power generation. More than 70 per cent of the total operational wind and solar projects in the country are located in Sindh.”

The reports said that all the grid-connected wind power projects of 1,240MW in Pakistan are in Sindh. “The Sindh government has initiated many wind and solar power projects under the tripartite arrangement with the Alternative Energy Development Board, of which 11 wind projects of 560MW have achieved financial close. These projects are expected to be online by December 2021.”

The nonprofit said the Sindh government has taken some remarkable steps for the development of renewable energy, adding that by adopting the Centre’s 2006 Renewable Energy Policy, the provincial government announced the ‘Sindh Land Grant Policy for Renewable Energy Projects 2015’ to facilitate investment in the renewable energy sector by offering favourable lease agreements for 30 years.

The report pointed out that before the introduction of the 18th amendment, electricity was a federal subject, but the passage of the amendment clearly outlined a mandate of the provinces regarding power generation, transmission and distribution under Article 157.

The findings highlighted that the steps taken by the Sindh government are in line with the functions devolved through the 18th amendment, but the absence of consumers who buy and pay for electricity used does not permit the provincial government to make decisions entirely on its own renewable energy development.

“Although power distribution companies that sell power to electricity consumers have independent boards, they all operate under the umbrella of the Power Division of the Federal Ministry of Energy without any involvement from the provincial governments. Moreover, a lack of effective coordination between the federal and provincial governments on policy and infrastructure development issues has impeded renewable energy deployment in Sindh.”

The study recommends the Sindh government to formulate an ambitious renewable energy policy in line with its mandate and, as far as possible, consistent with the policy of the Centre to demonstrate a political commitment for the development of renewables.

The study also suggests that the Sindh Transmission & Dispatch Company involve private investment in transmission infrastructure to avoid roadblocks to grid availability and stability for renewable energy projects, as it will also reduce requirements from the provincial government’s end to mobilise public funds for grid infrastructure.

The nonprofit suggested that Sukkur and Hyderabad’s power companies should be split into smaller units for their effective management, while the federal and provincial governments should work jointly in the presence of independent boards until a formula is agreed on for the devolution of distribution companies to provincial control.

It also suggested that the Council of Common Interests is the right forum that should act proactively for enhanced coordination between the federal and provincial governments on renewable energy policy, planning and development.

The massive build-up of coal power projects in Thar requires reconsideration, as it will worsen air pollution, increase capacity payments, add surplus capacity and limit the growth of renewables, which are already the most cost-competitive source of power in the country, concluded the report.