Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ
Like many other countries, Pakistan has a geographic digital divide. Residents of remote areas of the country have significantly lower access to the Internet than those in the urban centers. While the mobile internet usage in the urban areas has reached 65%, only 50% of those living in rural areas have access to it, according to a recent GSMA report titled "State of Mobile Internet Connectivity 2026".
Digital Connectivity in Rural Pakistan
To bridge this rural-urban digital divide, Pakistan government is expanding telecom and high-speed internet services in remote and rural areas through the proposed National Connectivity Plan, satellite broadband integration, and multi-billion-rupee Universal Service Fund (USF) projects. Fiber optic cables and satellites will provide backhaul high-capacity communication link to solar-powered 4G/5G cell towers in rural communities.
Solar power is being used to bridge the digital divide in the country by providing reliable off-grid electricity for remote telecom towers, internet hubs, and community learning centers. Cell tower infrastructure companies like Engro Enfrashare are using solar-powered setups for thousands of telecom towers across regions like Balochistan to maintain stable mobile and data signals.
Pakistan Telecommunications Authority (PTA) has recommended licensing multiple low-earth orbit (LEO) satellite service providers, including Starlink, OneWeb, Shanghai Spacecom Satellite Technology (SSST) and Amazon's Project Kuiper, to deliver reliable broadband to isolated rural communities and motorways where laying conventional fiber is commercially unviable.
At the same time, satellite service providers such as Kacific Broadband Satellites have partnered with local operations to bring high-speed connections—delivering up to 60 Mbps to rural schools across remote northern territories like Gilgit-Baltistan and Chitral. Leveraging 11 Ka-band spot beams on the Paksat MM1 satellite, this partnership will bridge the digital divide and support the country’s growing connectivity needs. With high-throughput capacity for over 20,000 sites, the collaboration will provide essential broadband access for communities, businesses, government agencies, ISPs, and telcos, enabling mobile backhaul and backup connectivity in remote regions.
The Universal Service Fund (USF), funded by a levy on mobile carriers, has expanded voice and broadband access to more than 16.2 million people. The projects covered over 9,400 underserved and unserved mauzas during the last five fiscal years. The Fund has recently approved major new projects worth Rs 13 billion across 11 districts across the country. These initiatives encompass three fiber-optic cable projects covering 1,428 km (Sialkot, Narowal, Ziarat, and Quetta) and six broadband projects (Umerkot, Gujranwala, Kohat, Khuzdar, Muzaffargarh, Mansehra, and Mandi Bahauddin) aiming to connect over 5.5 million people. These cables are planned to be installed along motorways and highways going through small towns and villages.
In addition to improving access in underserved areas, Pakistan government has also rolled out an ambitious National Fiberization Plan aimed at delivering high-speed broadband to 10 million households by 2029. It's also targeting 80% fiberization of mobile towers to enhance network capacity and reliability.
In FY2025-26, Pakistan's software houses, BPOs, export companies and independent freelancers together earned Pakistan US$4.6 billion in IT and IT-enabled services exports, up 20% from US$3.8 billion the year before. June, 2026 alone brought in US$416 million, nearly 23 percent higher than the same month a year earlier, according to government data. The government has set a target of $25 billion digital economy by 2030.
It's all part of Pakistan's continuing journey to build a robust digital public infrastructure (DPI). It began in March 2000 with the establishment of NADRA, the National Database and Registration Authority. The Gates Foundation defines DPI as follows: "DPI is a digital network that enables countries to safely and efficiently deliver economic opportunities and social services to all residents. DPI can be compared to roads, which form a physical network that connects people and provides access to a huge range of goods and services...... strong DPI has three foundational systems—identity, payments, and data exchange—that together can make life easier in important ways".
Growing access to smartphones and Internet connectivity is already transforming the lives of women in rural Pakistan. They are acquiring knowledge, accessing healthcare and finding economic opportunities. A 2023 UNDP report titled "DigitAll: What happens when women of Pakistan get access to digital and tech tools? A lot!" written by Javeria Masood describes the socioeconomic impact of technology in Pakistan in the following words:
"The world as we know it has been and is rapidly changing. Technology has proven to be one of the biggest enablers of change. There has been a significant emphasis on digital trainings, tech education, and freelancing in the last several years especially during the pandemic, through initiatives from the government, private and development sectors. Covid-19 acted as a big disrupter and accelerated the digital uptake many folds. In Pakistan, we saw the highest number of digital wallets, online services, internet-based services and adaptability out of need and demand".
Nearly 4,000 new net metering licenses have been issued in Pakistan in the July-September quarter, up from 2,000 in the same quarter last year. Vast majority of these are for solar photo-voltaic installation. Net metering solar installations are in addition to the rapidly growing off-grid solar panels across Pakistan. Higher electric utility (DISCO) bills and lower cost of solar panels appear to be driving the adoption of solar in Pakistan. Net metering allows users with private renewable energy production plants to connect to the electric grid and sell excess power to the local electric utility or DISCOs such as K-Electric, LESCO or IESCO in Pakistan.
This year has seen the fastest growth in net energy metering (NEM) growth since Pakistan launched its first NEM policy in 2015, according to data shared by Jeremy Higgs, director of operations for Islamabad-based EcoEnergy. Total number of net metering installations in Pakistan is about 16,000, according to Jeremy Higgs. National Electric Power Regulatory Authority (NEPRA) issued 3,334 net metering licenses with total installed capacity of 56.86 megawatt under the net-metering regime during 2019-20, according to an October, 2020 news report.
Surprisingly, Pakistan's biggest city Karachi is lagging significantly behind Lahore and Islamabad in net metering licenses. Nearly 25% of all net metering licenses in Pakistan were issued by LESCO (Lahore Electric Supply Company) in the July-September quarter. IESCO (Islamabad Electric Supply Company) has handed out 20% and K-Electric (Karachi Electric) 15%.
Back in 2017, Pakistan was ranked among the top 10 countries for investment in solar PV projects below 1 MW. Pakistan PSLM/HIES 2018-19 survey results revealed that 15.2% of all households are using solar panels as a source of energy for their homes.
Khyber-Pakhtunkhwa province leads the nation with 40% of all households using solar energy. Rural Pakistan is embracing solar power at a faster rate than Urban Pakistan. Adoption of solar in rural areas of KP is at 43%, Sindh 33.9%, Balochistan 20.4% and Punjab 7.9%. Rapid decline in cost of solar panels appears to be driving the adoption of solar in Pakistan's rural areas where grid power is either unavailable or unreliable.
Pakistan’s National Electric Power Regulatory Authority (NEPRA) has published for public comments its revised feed-in tariffs (FiTs) for solar energy projects of up to 100 MW, according to a report in PV-Tech journal.
The proposed FiTs are slightly lower in Balochistan, Sindh and Southern Punjab region than in Khyber Pakhtun Khwa (KPK) and the rest of Punjab. The proposal for years 1 through 13 includes Rs. 11.128 (US$0.105) per unit for southern region and Rs. 11.783 (US$0.111) per unit for northern region. The rates drop to Rs. 5.588 (US$0.053) and Rs. 5.917 (US$0.056) per unit for northern and southern regions respectively for years 14-25. The average for the next 25 years works out to Rs. 9.924 (US$0.094) and Rs. 10.507 (US$0.099) per unit for the two regions.
Pakistan Solar Map Multi-year mean (2000-2012) of daily Global Horizontal Irradiance (GHI) for Pakistan in kWh/m2 [Note: preliminary, unvalidated results] Source: World Bank
Last year, NEPRA, the nation's power regulator, approved a regulatory framework for solar and wind energy for both commercial and residential installations. The framework includes feed-in tariffs for commercial power producers and net metering for residential applications of up to 1 MW.
Under the new Net Metering Law, NEPRA, the Pakistani power regulator, will grant power generation licenses to solar and wind system owners. The owners will need to register the critical equipment used, particularly the make and model of inverter and generator used. Among other technical considerations, the generator must also install a manual disconnect device to take the system off the network if necessary, according to details published by PV Tech publication.
Net metering is a billing mechanism that pays solar energy system owners for the electricity they add to the grid. It allows a residential customers with rooftop solar panels to generate more electricity than the home uses during daylight hours and sell it to the power supply company. It will require a bi-directional meter (or two separate meters) for implementation.
Pakistan has already introduced feed-in tariffs (FiTs) for larger renewable power systems to supply electricity to the national grid on a commercial scale. It paved the way for a 1000 MW Quaid-e-Azam solar park being built in Bahawalpur.
Cost of solar power is rapidly declining. However, Pakistan's NEPRA's attempt to cut tariff down from 14.15 cents to 9.25 cents per unit is being resisted strongly by Zonergy Company Limited, a Chinese company working on Quaid-e-Azam solar park power project, according to a story in Express Tribune newspaper. This is in sharp contrast to the record low solar tariff of Indian Rs 4.63 per unit (Pak Rs. 7.19) for 500 MW solar project by US-based Sun-Edison, according to Indian media reports.
Pakistan's renewable power policy and regulatory frameworks have drawn praise from international law firm Eversheds which has described the country as “one of the most exciting renewables markets globally, with an abundance of potential”. Alternative Energy Development Board (AEDB) of Pakistan's CEO, Amjad Ali Awan has said that "Pakistan’s renewable market is relatively new but it provides an attractive investment opportunity with compelling structures which make it bankable as well as marketable."
Net metering law is necessary but not sufficient to promote widespread use of renewable energy. It will take serious coordinated efforts of Pakistan power regulator NEPRA, the country's nascent solar industry and various utilities like K-Electric to start implementation. Meanwhile, consumers could install a stand-alone rooftop solar system that can be connected to the grid in future. They just need to make sure to select high-quality equipment, particularly inverter and switch, for this purpose which will most likely be acceptable to utilities.
Pakistani power regulators have approved a regulatory framework for solar and wind energy for both commercial and residential installations. The framework includes feed-in tariffs for commercial power producers and net metering for residential applications of up to 1 MW.
Under the new Net Metering Law, NEPRA, the Pakistani power regulator, will grant power generation licenses to solar and wind system owners. The owners will need to register the critical equipment used, particularly the make and model of inverter and generator used. Among other technical considerations, the generator must also install a manual disconnect device to take the system off the network if necessary, according to details published by PV Tech publication.
Net metering is a billing mechanism that pays solar energy system owners for the electricity they add to the grid. It allows a residential customers with rooftop solar panels to generate more electricity than the home uses during daylight hours and sell it to the power supply company. It will require a bi-directional meter (or two separate meters) for implementation.
Pakistan has already introduced feed-in tariffs (FiTs) for larger renewable power systems to supply electricity to the national grid on a commercial scale. It paved the way for a 1000 MW Quaid-e-Azam solar park being built in Bahawalpur.
Pakistan's renewable power policy and regulatory frameworks have drawn praise from international law firm Eversheds which has described the country as “one of the most exciting renewables markets globally, with an abundance of potential”. Alternative Energy Development Board (AEDB) of Pakistan's CEO, Amjad Ali Awan has said that "Pakistan’s renewable market is relatively new but it provides an attractive investment opportunity with compelling structures which make it bankable as well as marketable."
Net metering law is necessary but not sufficient to promote widespread use of renewable energy. It will take serious coordinated efforts of Pakistan power regulator NEPRA, the country's nascent solar industry and various utilities like K-Electric to start implementation.
Meanwhile, consumers could install a stand-alone rooftop solar system that can be connected to the grid in future. They just need to make sure to select high-quality equipment, particularly inverter and switch, for this purpose which will most likely be acceptable to utilities.
“I use the solar light for cooking at night. We save money because we had to buy candles and kerosene before. We also use it to charge our mobile phones.” Marvi, Yousaf Babar Village in Sindh, Pakistan
About 250 schools and 12,000 homes in Pakistani villages have so far been lit by solar lights. The program is funded by the UK's Department for International Development (DfID) to help flood-affected people in rural Sindh and Punjab.
Plan International Pakistan and the Punjab education department have rebuilt 400 schools destroyed by floods, and implemented solar panels in 250 schools that did not have electricity. In addition to the solar panel installation, the DfID funded project also provided water and sanitation, school furniture, school paper, schoolbags and uniforms, sports equipment and health education for 54,000 primary school children.
The solar lights cost about $15 each and give sustainable, free light for up to 10 hours after each charge, and can last for up to five years. The cost is recouped within a couple of months, providing excellent value for money, according to DfID sources.
The solar technology is also used for recharging mobile phones, which provide vital communication lifelines in rural areas, enabling people to keep in touch with family and community. The mobile phones are helping reunite displaced families and communities, and helping people to try to get back to a normal life.
In addition to growing number solar energy users in Pakistani villages, the city dwellers are also increasingly turning to solar to cope with frequent power cuts, and gas shortages. There is growing demand for low cost Chinese solar products such as solar street lights, solar garden lights, solar generators, solar heaters, solar water heaters and solar water collectors for industry, according to a report in Pakistan's Express Tribune newspaper. Many consumers told ET they prefer solar over UPS (un-interruptible power supplies) and diesel or gas generators.
“Sales of solar energy panels have increased about 40 per cent compared to winter of last year. Sunshine in Pakistan remains for approximately 10 hours a day, which is enough to produce 1,000 watts per square meter. Producing electricity from the sun is very easy,” the paper quotes Tariq Nurani, a solar products dealer, as saying.
The Express Tribune story also features Khawaja Cotton Industries CEO Muhammad Amjad Khawaja who said he invested Rs 5 million for solar water boilers which helped deal with increasing gas load shedding in the textile manufacturing sector.
The rapid cost declines and increasing availability of solar equipment are enabling energy-starved but resilient Pakistanis to cope with the twin shortages of gas and electricity.
Here's a World Economic Forum story on solar revolution in Pakistan:
Pakistan is set to raise feed-in tariffs (FITs) requiring electric supply companies to purchase electricity that guarantee up to 18% return to private producers of wind and solar power. This latest effort is to improve incentives over an earlier 2006 policy for individual consumers installing solar panels in their homes and for larger investors.
Ms. Rukhsana Zuberi, a fellow NEDUET alumnus and PPP senator, is pushing the required legislation through Pakistan's parliament for the new FIT policy.
In addition to her legislative efforts, Zuberi is also taking the lead in installing solar panels in several public buildings across the country. Some of high-profile locations where solar panels have so far been installed include the tombs of Pakistan's founder Quaid-e-Azam M.A. Jinnah and PPP leader Benazir Bhutto, University of Engineering Technology in Lahore, Abdullah Shah Ghazi's shrine, St. Patrick's Cathedral and Shri Swaminarayan Mandir in Karachi, Prime Minister's Office and Secretariat, Pakistan Supreme Court in Islamabad, and other important sites.
As the head of Pakistan Engineering Council, Zuberi first started with a program at the PEC facilities to install solar panels and reduce consumption by using more efficient LED light bulbs. Just changing light fixtures in the PEC auditorium reduced electricity consumption dramatically from 7860W to 336W with 20% more lumens.
I believe that the planned improvement in feed-in-tariff is a good start, but it needs to be followed up by other incentives such as tax rebates, subsidized solar panels and energy-efficient bulbs and appliances, and by ensuring that the aging power grid is sufficiently updated to handle multiple small sources of renewable power without breaking down.
Reliable 24X7 availability of electricity is taken for granted in most of the developed world. Whenever consumers plug their favorite gadgets into the wall socket, it is assumed that the power will be there. Everyone has access to it. Electrical power outages are extremely rare.
Electricity empowers consumers by enhancing their lives through better learning and entertainment, higher productivity and income, greater comfort, increased safety, superior health, and improved economy. People in the developed world live with the benefits of electricity everyday. While most people give little thought to where electricity comes from, there are many different ways to generate electricity - including coal, oil, gas, hydroelectric, nuclear, wind and solar. It is delivered to individual homes by extensive national grid systems. In most of the developing nations, however, the availability of electricity to majority of the population is either unreliable or non-existent. The lack of such an essential energy source results in low levels of human development, low productivity and widespread poverty in the developing world, as evident from the chart above. The governments of most developing nations, particularly in South Asia, have miserably failed in providing such a basic necessity as electricity to their people. About 40% of the people in both India and Pakistan have no access to electricity, The percentage lacking access in Bangladesh is even higher. Socially-oriented enterprises such as Grameen Shakti and D.light are offering poor communities an affordable alternative to kerosene, which is ubiquitous but hazardous. The quality of the kerosene lamp light isn't good, it emits pollutants, and it's just plain dangerous. "You travel around these villages, and everyone has a story of a child being burned or a house destroyed by fire," says Nedjip Tozun of D.light, speaking to Fortune by phone from his office in Shenzhen, China. "And yet in some places we found that people were spending 15% to 20% of their income on light." The world's poor spend about $38 billion a year on kerosene for lighting, according to the International Finance Corp.
Pakistan's current installed capacity is around 19,845 MW, of which around 20% is hydroelectric. Much of the rest is thermal, fueled primarily by gas and oil. Per capita energy consumption of the country is estimated at 14 million Btu, which is about the same as India's but only a fraction of other industrializing economies in the region such as Thailand and Malaysia, according to the US Dept of Energy 2006 report. To put it in perspective, the world average per capita energy use is about 65 million BTUs and the average American consumes 352 million BTUs. Extended electricity load shedding in Karachi's five major industrial estates is causing losses in billions of rupees as the production activity has fallen by about 50 per cent. KESC, Karachi's power supply utility, is dealing with with a shortfall of around 700MW against a total demand of 2200MW. Almost all forms of power generation from fossil fuel-fired thermal to hydroelectric to nuclear are down from a year ago. As a result of the daily rolling blackouts, the economy, major exports and overall employment are also down and the daily wage earners are suffering. The KESC and PEPCO owe more than Rs. 10b to the independent power producers (IPPs) and paying them will help bring them into full operation and ease the crisis at least partially.
The electric power situation in India is not much better. The country is suffering its worst electricity crisis. Maharashtra, Uttar Pradesh, West Bengal and Haryana are the worst hit by the ongoing crisis and they are facing power gaps of about 5,000MW, 1,000MW, 2000MW, 1,500MW respectively. Some major cities in India are facing alarming situations; continuous load shedding in Bangalore has led to diesel shortage as people are using diesel generators to deal with the crisis. Times of India has reported student protests against power cuts affecting their studies. Textile and jute mills in West Bengal have been badly hit by unscheduled power cuts. In Tamil Nadu, severe power shortage has hit industrial production, according to MSN India. Companies said production could be down as much as 30 per cent. Sectors like textile, leather and salt appear to be among the worst hit. Industry associations put the loss in production at around Rs 4,000 crore. In Maharashtra, state officials are asking industrial consumers to lower their demand by 10% or be ready to face forced load shedding (rolling blackouts). Last year, IBN reported that New Delhi, the capital, faced 30 percent shortage in power. Maharashtra on an average had 8 to 10 hours of load shedding every day. Madhya Pradesh had 26 percent power deficit. In Gujarat, while the requirement is 5,500 Mega Units, availability is 4,780 Mega Units. Andhra Pradesh, Karnataka and Tamil Nadu are facing 2000 Mega Units of energy deficit and Bihar and Jammu and Kashmir have 1,500 and 1000 Mega Units of power shortages respectively. Cities and towns are facing 7 to 13 hours blackouts. To empower people and communities in some of the developing nations, social entrepreneurs are stepping in to fill the large gap between supply and demand for electricity. In Bangladesh, for example, Grameen Shakti is a social enterprise selling home solar electricity systems to families that do not have access to electricity otherwise, which includes more than 70% of the country’s population. It is an enterprise that demonstrates the success of a densely networked approach involving mutually reinforcing investments in human, social, ecological and financial capital by a number of organizations.
Solar energy makes much sense for Pakistan for several reasons: firstly, majority of the population lives in 50,000 villages that are far away from the creaking old national grid, according to a report by the Solar Energy Research Center (SERC). Connecting these villages to the national grid would be very costly, thus giving each house a solar panel would be cost efficient and would empower people both economically and socially.
To draw inspiration for empowering Pakistani villagers with solar energy, Pakistanis don't have to look far. In Bangladesh, Grameen Shakti (GS) is demonstrating that it can be done. GS was founded by Bangladeshi Nobel Laureate Mohammad Yunus in 1996 as part of the Grameen Bank’s family of enterprises. Shakti is attempting to rescue the rural people from energy poverty which hampers their social and economic development. Shakti's unique program has taken the first step to break the social and economical divide between those who have energy and those who do not.
The Grameen Bank, based in Dhaka, Bangladesh, was started in 1976 and officially founded in 1983; it operates on a model of providing small loans without collateral to the rural poor in Bangladesh. Grameen Shakti is one of more than two dozen organizations within the Grameen family of enterprises that is dedicated to improving the quality of rural life in Bangladesh. Although registered as a not-for-profit organization, Grameen Shakti is run like a business. In the face of persistent market challenges, the organization achieved profitability in 2000, after only four years of operation. Grameen Shakti has installed more than 40,000 individual solar energy systems that have provided more than 100,000 lower-income individuals with access to reliable electricity.
GS’s solar program mainly targets those areas, which have no access to conventional electricity and little chance of getting connected to the grid within 5 to 10 years. It is one of its most successful programs. Currently, GS is one of the largest and fastest growing rural based renewable energy companies in the world. GS is also promoting Small Solar Home System to reach low income rural households.
Solar Home Systems(SHSs) can be used to light up homes, shops, fishing boats etc. It can also be used to charge cellular phones, run televisions, radios and cassette players. SHSs have become increasingly popular among users because they present an attractive alternative to conventional electricity such as no monthly bills, no fuel cost, very little repair, maintenance costs, easy to install any where etc.
Grameen Shakti has a micro-utility model for some very poor rural consumers who cannot afford a complete solar home system. Under this model, one entrepreneur installs the system at his own premise and share the load with some of his neighbors. Owner of the system is responsible for making installment payments to GS, more than 50% of which is covered by the rents he collects from the users of his system. Micro-utility model has become very popular in the rural market places and has helped to increase business turnover by extending business hours. More than 1000 micro-utility systems are operating in the rural market places.
GS installed SHSs have made a positive impact on the rural people. GS has introduced micro-utility model in order to reach the poorer people who cannot afford a SHS individually. Another successful GS venture is Polli Phone which allows people is off grid areas the facilities of telecommunication through SHS powered mobile phones.
Pakistani blog Pakistaniat has reported practical examples of the use of solar energy as seen in some villages of Pakistan where each house has been provided with a solar panel that’s sufficient to run an electric fan and two energy saving bulbs. Prior to this arrangement, the whole village used to go dark at night. In Narian Khorian, a village about 50 kilometers from Islamabad, 100 solar panels have been installed by a local firm, free of cost, to promote the use of solar energy. With these panels, the residents of 100 households are enjoying light and fan facilities. This would not have happened for decades as the supply of electricity from the national grid would be difficult and costly due to the mountainous terrain.
Dawn newspaper recently reported that the Alternative Energy Development Board is planning electrification of 6968 remote villages through solar photovoltaic (PV) systems in the next 20 years. All the renewable energy projects, being undertaken by AEDB in the country, are financed by federal government through public sector development program (PSDP) allocation and funding from international multi-lateral institutions.
Among private non-government initiatives, a number of community-based micro hydro projects are being executed with the help of the Agha Khan Foundation in Pakistan's Northern Areas and NWFP. Within this region, out of a total of 137 micro-hydro plants, the AKRSP has established 28 micro-hydros with an installed capacity of 619kW. Initially, in 1986, these plants started as research and demonstration units. These projects were extended to Village Organizations (VOs) and became participatory projects. A Village Organization (VO) is a body of villagers who have organized themselves around a common interest.
Shakti Solar offers a very good model for organizing and funding a larger, nation-wide effort to empower Pakistanis with electrical energy to improve their lives.
Last February, I wrote an article "Solar Energy For Sunny Pakistan" suggesting that Pakistanis should seriously pursue the solar energy option. Many of the comments on the post were quite skeptical, some even cynical. But one particular response elated me. It was posted by someone with initials SK, who wrote as follows: "I am a consultant for the World Bank and I work on energy and infrastructure development issues. I am in the process of leaving and starting a non-profit organization to replicate the Grameen Shakti solar pv model in Pakistan because it is the only project I ever reviewed that seemed to make a bit of difference in actually alleviating poverty".
I do hope SK is out there now trying to light up a few homes in Pakistan to empower people. I wish SK, and others like him, great success as social entrepreneurs in Pakistan. It is indeed better to light candles than to curse darkness.
Sunny California is leading the way to tap solar energy. Can sunny Pakistan follow to deal with its crippling energy crisis?
California based BrightSource Energy, which already has a deal to build a series of huge solar power plants in the Mojave Desert for Pacific Gas & Electric (PG&E), announced an even larger project recently with Southern California Edison. Brightsource, with its roots in Israel, launched its first big solar project last year in the Negev desert.
The World Economic Forum voted BrightSource as a 2009 Technology Pioneer. It was the only solar company to win this year's award, and is recognized for helping industrial customers reduce their dependence on fossil fuels.
By 2016, the two companies said, BrightSource will build a series of solar-thermal power plants that will generate 1.3 gigawatts of electricity for Southern California Edison's customers. That's enough power for 845,000 homes, said Stuart Hemphill, the utility's vice president of renewable and alternative power. Talking with SiliconValley.com, he characterized the deal as "the largest set of solar agreements ever signed."
Photo-voltaic solar power panels are often used for local and distributed power generation capability, such as on rooftops of homes and buildings. It is generally on-grid but it can be off-grid for remote places. Unlike the solar panel's relying on photo-voltaic cells, solar thermal power is centrally generated from thousands of curved mirrors in the desert focusing sun's light on to water pipes to generate superheated steam which is then used to generate electricity. It is then connected to the grid and transmitted to major population centers. The first such experimental power plant was set up in California's Mojave desert in the 1980s and many of its pioneers are now helping Brightsource to go big with solar thermal.
The deal is another step toward meeting California mandates for renewable-energy generation. Investor-owned utilities such as PG&E are required to get 20 percent of their power from renewable sources by the end of 2010, and 33 percent by 2020. Even before this latest development, the state's Energy Commission was reviewing seven solar-thermal projects that could generate nearly 2.6 gigawatts worth of electricity.
California is very sunny, but so are other places such as Pakistan. In fact, Pakistan is an exceptionally sunny country. If 0.25% of Balochistan was covered with solar panels with an efficiency of 20%, enough electricity would be generated to cover all of Pakistani demand.
Solar energy makes much sense for Pakistan for several reasons: firstly, 70% of the population lives in 50,000 villages that are very far away from the national grid, according to a report by the Solar Energy Research Center (SERC). Besides, the country's creaky and outdated electricity infrastructure loses over 30 percent of generated power in transit, more than seven times the losses of a well-run system, according to the Asian Development Bank and the World Bank; and a lack of spare high-voltage grid capacity limits the transmission of power from hydroelectric plants in the north to make up for shortfalls in the south.Connecting these villages to the national grid would be very costly, thus giving each house a solar panel would be cost efficient and would empower people both economically and socially.
Pakistani blog Pakistaniat has reported practical examples of the use of solar energy as seen in some villages of Pakistan where each house has been provided with a solar panel that’s sufficient to run an electric fan and two energy saving bulbs. Prior to this arrangement, the whole village used to be plunged in darkness at night. In Narian Khorian, a village about 50 kilometers from Islamabad, 100 solar panels have been installed by a local firm, free of cost, to promote the use of solar energy. With these panels, the residents of 100 households are enjoying light and fan facilities. This would not have happened for decades as the supply of electricity from the national grid would be difficult and costly due to the mountainous terrain.
Pakistan Solar Map Multi-year mean (2000-2012) of daily Global Horizontal Irradiance (GHI) for Pakistan in kWh/m2 [Note: preliminary, unvalidated results] Source: World Bank
In addition to renewable energy from the sun, Pakistan is also fortunate to have something many other countries do not, which are high wind speeds near major centers. Near Islamabad, the wind speed is anywhere from 6.2 to 7.4 meters per second (between 13.8 and 16.5 miles per hour). Near Karachi, the range is between 6.2 and 6.9 (between 13.8 and 15.4 miles per hour). Pakistan is also fortunate that in neighboring India, the company Suzlon manufactures wind turbines, thus decreasing transportation costs. Working with Suzlon, Pakistan can begin to build its own wind-turbine industry and create thousands of new jobs while solving its energy problems. Suzlon turbines start to turn at a speed of 3 meters per second. Vestas, which is one of the world's largest wind turbine manufacturers, has wind turbines that start turning at a speed of 4 meters per second. In addition to Karachi and Islamabad, there are other areas in Pakistan that receive a significant amount of wind.
Pakistan Wind Map Source: USAID
In only the Balochistan and Sindh provinces, sufficient wind exists to power every coastal village in the country. There also exists a corridor between Gharo and Keti Bandar that alone could produce between 40,000 and 50,000 megawatts of electricity, about twice the current installed capacity in Pakistan, says Ms. Miriam Katz who has studied and written about alternative energy potential in South Asia. Given this surplus potential, Pakistan has much to offer Asia with regards to wind energy. In recent years, the government has completed several projects to demonstrate that wind energy is viable in the country. In Mirpur Sakro, 85 micro turbines have been installed to power 356 homes. In Kund Malir, 40 turbines have been installed, which power 111 homes. The Alternative Energy Development Board (AEDB) has also acquired 18,000 acres for the installation of more wind turbines.
The village of Ghulam Muhammad Goth, north of Karachi with population of 800, about 10 km from the national power grid, now receives power from a small windfarm consisting of 18 wind turbines each capable of generating 500 watts of electricity. Installed by the state-run Pakistan Council for Renewable Energy and Technologies (PCRET), the farm produces enough to power for each home to have two low-energy bulbs, a fan and, most importantly, a television set.
In addition to high wind speeds near major centers as well as the Gharo and Keti Bandar corridor, Pakistan is also very fortunate to have many rivers and lakes. Wind turbines that are situated in or near water enjoy an uninterrupted flow of wind, which virtually guarantees that power will be available all the time. Within towns and cities, wind speeds can often change quickly due to the presence of buildings and other structures, which can damage wind turbines. In addition, many people do not wish for turbines to be sited near cities because of noise, though these problems are often exaggerated. Wind turbines make less noise than an office and people comfortably carry on conversations while standing near them.
Finally this year, Pakistan awarded a contract to a Turkish company to set up a wind farm near Hyderabad. President of Zorlu Enerji (Pvt) Ltd., Murat Sungar Bursa, who signed the agreement with HESCO (Hyderabad Electric Supply Company) in Pakistan, said that the estimated cost of 50 MW project was 120 million dollars. He added the company was also considering to further expand the project up to 250MW. He said incentives offered by Pakistan’s renewable energy policy was a major factor in the company’s decision to invest here. He said that capacity of the wind farm will be enhanced upon successful completion of 50 MW phase. Zorlu Enerji has become the first company to establish wind farm for power generation in Pakistan after signing Energy Purchase Agreement with Hyderabad Electric Supply Corporation for purchase of six MW electricity generated at the company’s facility in Jhimpir. NEPRA (Pakistan's power regulator) has awarded tariff of US cents 12.1057 Per KWH, which is cheaper than the electricity generated from thermal sources. The power generated from the first phase would be routed to the Jhimpir gird station by HESCO and would be sufficient to electrify 6,900 homes in Hyderabad region. Harnessing the strong winds coming from South West, the wind farm is first major commercial wind power project of the country, comprising five towers in the first phase with an installed capacity of 1.2MW wind turbine generator per tower.
The slowdown in the renewable energy sector is likely to be temporary. President Obama is expected to get the US Congress to approve $150b to support the US renewable energy sector with large government incentives. The US policy will likely boost the global renewable energy market as well.
As Pakistan grapples with its crippling energy crisis, it is important for the country to take advantage of its precious natural resources such as the high winds and the bright sunshine, and biofuels as byproducts of its sizable sugar-making industry. Such a strategy will lead to lower costs of generation by reducing the need to import oil. It'll also help reduce carbon emissions, a major environmental concern.
Suzlon, India's wind power giant, has reported a quarterly loss after years of expansion and profit growth. It was hurt mainly by the ongoing global credit crunch, slowing wind turbine sales, and by rising costs and a provision to do repairs stemming from the widely reported quality problems at the wind-turbine manufacturer's overseas plants.
Suzlon reported a consolidated net loss of 589.7 million rupees ($12.1 million) for the quarter ended Dec. 31, compared with a net profit of 1.52 billion rupees a year earlier. Consolidated total revenue more than doubled to 68.93 billion rupees from 31.7 billion rupees, while consolidated total expenditure surged to 63.19 billion rupees from 28.48 billion rupees, according to media reports.
Chairman and Managing Director Tulsi Tanti said the global credit crunch is likely to hit sales growth in the wind-energy sector, which had a compounded annual growth rate of more than 34% over the past five years.
But Suzlon said it expects the industry's outlook to turn favorable by 2010 as easing credit and lower costs boost demand from the U.S., Europe, China and India.
U.S. factories building parts for Wind turbine industries have announced a wave of layoffs in recent weeks, and trade groups are projecting 30 to 50 percent declines this year in installation of new equipment, barring more help from the government, according to the New York Times.
Prices for turbines and solar panels, which soared when the boom began a few years ago, are falling. Communities that were patting themselves on the back just last year for attracting a wind or solar plant are now coping with cutbacks.
“I thought if there was any industry that was bulletproof, it was that industry,” said Rich Mattern, the mayor of West Fargo, N.D., where DMI Industries of Fargo operates a plant that makes towers for wind turbines. Though the flat Dakotas are among the best places in the world for wind farms, DMI recently announced a cut of about 20 percent of its work force because of falling sales, the NY Times reports.
Much of the problem stems from the credit crisis that has left Wall Street banks reeling. Once, as many as 18 big banks and financial institutions were willing to help finance installation of wind turbines and solar arrays, taking advantage of generous federal tax incentives. But with the banks in so much trouble, that number has dropped to four, according to Keith Martin, a tax and project finance specialist with the law firm Chadbourne & Parke.
Wind and solar developers have been left starved for capital. “It’s absolutely frozen,” New York Times quotes Craig Mataczynski, president of Renewable Energy Systems Americas, a wind developer. He projected his company would build just under half as much this year as it did last year.
The wind and solar industries are hopeful that President Obama’s economic stimulus package will help. But it will take time, and in the interim they are making plans for a rough patch.
Solar energy companies like OptiSolar, Ausra, Heliovolt and SunPower, once darlings of investors, have all had to lay off workers. So have a handful of companies that make wind turbine blades or towers in the Midwest, including Clipper Windpower, LM Glasfiber and DMI.
Some big wind developers, like NextEra Energy Resources and even the Texas billionaire T. Boone Pickens, a promoter of wind power, have cut back or delayed their wind farm plans.
President Obama has often talked about America's energy policy and dealing with its impact on climate change as a priority. He wants to create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future. Transformation in the way people and businesses use technology could reduce annual man-made global emissions by 15 per cent by 2020 and deliver energy efficiency savings to global businesses of over $ 800 billion, according to a new report published by independent non-profit The Climate Group and the Global e-Sustainability Initiative (GeSI). The choice of a Nobel laureate scientist, Berkeley's Dr. Steven Chu as energy secretary by Obama reflects this priority.
There were reports in 2007 that some of the wind projects in Pakistan could not proceed because of the lack of wind turbines availability, even though the land had been allocated and permits issued for this purpose. Most vendors were sold out through 2009. The contract terms in turbine supply agreements became increasingly favorable to the vendors, with less warranty, earlier and larger pre-payment requirements, and higher prices. After years of boom, the second half of 2008 saw a bust in the wind energy sector with credit being extremely tight.
Finally this year, Pakistan awarded a contract to a Turkish company to set up a wind farm near Hyderabad. President of Zorlu Enerji (Pvt) Ltd., Murat Sungar Bursa, who signed the agreement with HESCO (Hyderabad Electric Supply Company) in Pakistan, said that the estimated cost of 50 MW project was 120 million dollars. He added the company was also considering to further expand the project up to 250MW. He said incentives offered by Pakistan’s renewable energy policy was a major factor in the company’s decision to invest here. He said that capacity of the wind farm will be enhanced upon successful completion of 50 MW phase. Zorlu Enerji has become the first company to establish wind farm for power generation in Pakistan after signing Energy Purchase Agreement with Hyderabad Electric Supply Corporation for purchase of six MW electricity generated at the company’s facility in Jhimpir. NEPRA (Pakistan's power regulator) has awarded tariff of US cents 12.1057 Per KWH, which is cheaper than the electricity generated from thermal sources. The power generated from the first phase would be routed to the Jhimpir gird station by HESCO and would be sufficient to electrify 6,900 homes in Hyderabad region. Harnessing the strong winds coming from South West, the wind farm is first major commercial wind power project of the country, comprising five towers in the first phase with an installed capacity of 1.2MW wind turbine generator per tower.
The slowdown in the renewable energy sector is likely to be temporary. President Obama is expected to get the US Congress to approve $150b to support the US renewable energy sector with large government incentives. The US policy will likely boost the global renewable energy market as well.
In June 2007, the power cuts in Pakistan lasted no more than 3 or 4 hours a day. Today, in extremely hot weather, Pakistanis have to endure without electricity for 8 to 10 hours a day. Industrial production is suffering, exports are down, jobs are being lost, and the national economy is in a downward spiral. By all indications, the power crisis in Pakistan is getting worse than ever.
Extended Load-shedding: Extended electricity load shedding in Karachi's five major industrial estates is causing losses in billions of rupees as the production activity has fallen by about 50 per cent. KESC, Karachi's power supply utility, is dealing with with a shortfall of around 700MW against a total demand of 2200MW. Almost all forms of power generation from fossil fuel-fired thermal to hydroelectric to nuclear are down from a year ago. As a result of the daily rolling blackouts, the economy, major exports and overall employment are also down and the daily wage earners are suffering. The KESC and PEPCO owe more than Rs. 10b to the independent power producers (IPPs) and paying them will help bring them into full operation and ease the crisis at least partially. Electricity Demand: As discussed in an earlier post, Pakistan's current installed capacity is around 19,845 MW, of which around 20% is hydroelectric. Much of the rest is thermal, fueled primarily by gas and oil. Pakistan Electric Power Company PEPCO blames independent power producers (IPPs) for the electricity crisis, as they have been able to give PEPCO only 3,800 MW on average out of 5,800 MW of confirmed capacity. Most of the IPPs are running fuel stocks below the required minimum of 21 days. IPPs complain that they are not being paid on time by PEPCO.
Per capita energy consumption of the country is estimated at 14 million Btu, which is about the same as India's but only a fraction of other industrializing economies in the region such as Thailand and Malaysia, according to the US Dept of Energy 2006 report. To put it in perspective, the world average per capita energy use is about 65 million BTUs and the average American consumes 352 million BTUs. With 40% of the Pakistani households that have yet to receive electricity, and only 18% of the households that have access to pipeline gas, the energy sector is expected to play a critical role in economic and social development. With this growth comes higher energy consumption and stronger pressures on the country’s energy resources. At present, natural gas and oil supply the bulk (80 percent) of Pakistan’s energy needs. However, the consumption of those energy sources vastly exceeds the supply. For instance, Pakistan currently produces only 18.3 percent of the oil it consumes, fostering a dependency on expensive, imported oil that places considerable strain on the country’s financial position, creating growing budget deficits. On the other hand, hydro, coal, wind and solar are perhaps underutilized and underdeveloped today, as Pakistan has ample potential to exploit these resources.
The country's creaky and outdated electricity infrastructure loses over 30 percent of generated power in transit, more than seven times the losses of a well-run system, according to the Asian Development Bank and the World Bank; and a lack of spare high-voltage grid capacity limits the transmission of power from hydroelectric plants in the north to make up for shortfalls in the south.
Gilani Government's Response: Neelum-Jhelum hydroelectric project, first formally announced by former Minister Omar Ayub on June 10, 2007, is finally starting in earnest under the PPP government of Prime Minister Yousaf Raza Gilani. This hydro project is expected to add 963MW power generating capacity at a cost US $2.2 billion, according to Business Wire. Prior to this project, the new Pakistani Prime Minister signed a deal with a Chinese company, Dong Fong, for setting up 525 MW thermal power plant with an investment of $450 million at Chichoki Mallian (Sheikhupura). Both of these projects are expected help partially close the 3000 MW gap that exists today between supply and demand in Pakistan.
Green Energy Opportunities: In response to the warnings of energy crisis in Pakistan, President Musharraf's government recognized the need and the potential for renewable alternatives and, in 2006, created Alternative Energy Development Board to pursue renewable energy. In particular, AEDB is focusing on wind and solar as viable alternatives. AEDB is facilitating setting up of small renewable energy projects in line with government’s policy of promoting the use of renewable energy in the country’s power generation mix, says the board’s chief executive officer Mr Arif Alauddin. AEDB has recently issued Makwind Power Private Ltd (MPPL) a Letter of Intent for the setting up of 50MW wind farm at Nooriabad in Sindh, as part of its efforts to facilitate 700 MW wind energy by 2010.
According to data published by Miriam Katz of Environmental Peace Review, Pakistan is fortunate to have something many other countries do not, which are high wind speeds near major centers. Near Islamabad, the wind speed is anywhere from 6.2 to 7.4 meters per second (between 13.8 and 16.5 miles per hour). Near Karachi, the range is between 6.2 and 6.9 (between 13.8 and 15.4 miles per hour). Pakistan is also fortunate that in neighboring India, the company Suzlon manufactures wind turbines, thus decreasing transportation costs. Working with Suzlon, Pakistan can begin to build its own wind-turbine industry and create thousands of new jobs while solving its energy problems. Suzlon turbines start to turn at a speed of 3 meters per second. Vestas, which is one of the world's largest wind turbine manufacturers, has wind turbines that start turning at a speed of 4 meters per second. In addition to Karachi and Islamabad, there are other areas in Pakistan that receive a significant amount of wind.
In only the Balochistan and Sindh provinces, sufficient wind exists to power every coastal village in the country. There also exists a corridor between Gharo and Keti Bandar that alone could produce between 40,000 and 50,000 megawatts of electricity, says Ms. Katz who has studied and written about alternative energy potential in South Asia. Given this surplus potential, Pakistan has much to offer Asia with regards to wind energy. In recent years, the government has completed several projects to demonstrate that wind energy is viable in the country. In Mirpur Sakro, 85 micro turbines have been installed to power 356 homes. In Kund Malir, 40 turbines have been installed, which power 111 homes. The Alternative Energy Development Board (AEDB) has also acquired 18,000 acres for the installation of more wind turbines.
In addition to high wind speeds near major centers as well as the Gharo and Keti Bandar corridor, Pakistan is also very fortunate to have many rivers and lakes. Wind turbines that are situated in or near water enjoy an uninterrupted flow of wind, which virtually guarantees that power will be available all the time. Within towns and cities, wind speeds can often change quickly due to the presence of buildings and other structures, which can damage wind turbines. In addition, many people do not wish for turbines to be sited near cities because of noise, though these problems are often exaggerated. Wind turbines make less noise than an office and people comfortably carry on conversations while standing near them. As is painfully evident in summers, Pakistan is an exceptionally sunny country. If 0.25% of Balochistan was covered with solar panels with an efficiency of 20%, enough electricity would be generated to cover all of Pakistani demand. In all provinces the AEDB has created 100 solar homes in order to exploit solar energy.
Solar energy makes much sense for Pakistan for several reasons: firstly, 70% of the population lives in 50,000 villages that are very far away from the national grid, according to a report by the Solar Energy Research Center (SERC). Connecting these villages to the national grid would be very costly, thus giving each house a solar panel would be cost efficient and would empower people both economically and socially.
Coal Power and Hydroelectricity In addition to high winds and abundant solar potential, Pakistan has the fifth largest coal deposits in the world. The negative environmental effects of coal burning can be be mitigated by making use of the latest clean coal technologies that limit noxious gas exhaust into the atmosphere. Pakistan also has some deposits of natural gas in the Potwar Plateau region and near the border between Balochistan and Sindh, but these are likely to disappear within 20 years.
Because of the presence of many rivers and lakes, it makes sense for Pakistan to build dams to support water management and electricity generation projects. However, it must be done with care to avoid damage to the environment or loss of farmland.
Financial and Policy Incentives Despite the fact that Pakistan is so well endowed with wind and solar potential, only a few projects such as those mentioned above have been completed. One of the reasons why this has occurred is that Pakistan does not have major financial incentives available for those who want to install wind turbines or solar panels. Let us look at the case of India, Pakistan's neighbor. Despite having less potential for wind, India now has the world's fourth largest number of wind turbines installed at 7,093 MW, according to India: Renewable Energy Market report. Ahead of India are Germany at 21,283 MW, Spain at 13,400 MW and the US at 12,934 MW. In Germany, Spain and India, those who install wind turbines and solar panels are guaranteed a certain rate per kilowatt hour. In India, this varies according to the technology and the area. The Ministry of New and Renewable Energy, India reports that in most areas, between 2500 and 4800 rupees are guaranteed for solar panels, and for wind turbines, between 250,000 and 300,000 rupees are awarded. Because of the above incentives, the cost of wind in India is between 2 and 2.5 cents per kilowatt hour while in Pakistan, the cost is 7 cents. In December 2006, President Musharraf announced a national renewable energy policy. This policy means that small projects do not need approval and that any person can put up their own project. However, there are no financial incentives for doing so. At the moment, all renewable energy equipment has no sales or income tax and is free of custom duty, but these incentives are not enough to stimulate major growth in the renewable energy market where ROIs and other financial ratios have a long gestation or breakeven period. In certain situations, such as the textiles and other Karachi industrial units losing production and export opportunities due to power cuts, it may make sense for the owners to join hands and build power generation capacity they can rely on.
Conclusion In addition to coal and hydro electricity generation, Miriam Katz argues that it is clear that Pakistan is a suitable country for the installation of wind and solar: due to high winds near cities; the presence of rivers and lakes as well as the availability of wind turbines from nearby India. There are also other reasons for installing renewable energy. It is quite normal for extended power outages to happen on a daily basis in the country, but this cannot continue if the Pakistani economy is to grow. In March 2007, President Musharraf stated that renewable energy should be part of the push to increase energy supplies by 10 to 12 percent every year. The government also set a target of 10 percent of energy to come from renewables by 2015. If the new PPP-led government follows through with aggressive renewable energy push, Pakistan could be an Asian leader in renewable energy given its natural resources of wind and solar as its strategic endowments.
