Falling solar panel prices and soaring rates for grid electricity are driving a renewable power boom in Pakistan. A second factor spurring the growth in clean energy installations is the requirement of major western apparel brands for garments and textile manufacturers to switch to clean energy. As a result, the solar panel imports in the country jumped from 2,800 MW in 2022 to 5,000 MW in 2023, in spite of stringent import controls imposed by the government. Solar imports are on track to reach 12,000 MW in 2024, according to solar installers. The total current installed generation capacity in Pakistan is around 40,000 MW. Grid electricity demand in Pakistan plunged in 2023 by nearly a sixth and a decline in 2024 would mark the first time in 16 years that annual electricity use has fallen consecutively, data from energy think tank Ember showed, according to Reuters.
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| Pakistan Solar Panel Imports. Source: PV Magazine |
Omar Malik, the CEO of Shams Power, a major solar system contractor in Pakistan, was recently quoted by PV Magazine as saying: “In 2022, 2.8 GW of solar panels were imported into Pakistan. In 2023, about 5 GW, despite the import controls, and this year the prediction is for up to 12 GW”.
Aamir Hussain, chairman Pakistan Alternative Energy Association, told Arab News that solar panels of around 1,800 MW were purchased and installed last year, which was expected to jump to 3,000 MW this year due to the lower prices of the panels and increased customer demand.
“Pakistan will be spending over $3.5 billion [this year] on solar panel imports only as this doesn’t include import of batteries, inverters and other auxiliary items,” Hussain said. “Pakistan needs to follow consistent policies regarding renewable energy to meet its national and international obligations for the greenhouse gas emissions.”
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| Pakistan's Monthly Solar Imports in millions of US$. Source: Bloomberg |
Japanese publication Nikkei Asia recently reported seeing residential building rooftops covered with solar panels in Islamabad. It also reported proliferation of rooftop solar in small towns and villages across the country. In particular, the Nikkei story mentioned the remote village of Kardigap with a population of 5,000, in Balochistan province, where solar panels are becoming more common on the rooftops of houses.
Responding to western apparel brands' demand for sustainability, a number of large Pakistani textile manufacturers are switching to clean energy, particularly solar. Tayyab Group of Industries (TGOIs), a major textile manufacturer, has recently signed an MOU to install a 20 MW solar system for its needs. Gul Ahmed Textile Mills Limited announced recently that it will install a 17.1 MW roof-top solar power plant to meet its energy needs.
While rapid uptake of solar is good news for the planet, it does create a major fiscal issue for the Pakistani government struggling to pay for power produced by the independent power producers (IPPs). The IPPs, many of them Chinese, secured a guaranteed return on investment indexed to the U.S. dollar, plus payment for fixed capacity charges -- covering their debt servicing and other fixed costs -- regardless of whether the power plants are operational, according to Nikkei Asia. As the demand for the grid power from the IPPs declines with rising solar, the taxpayers are still on the hook for the unused installed capacity charges running into billions of dollars. Higher power tariffs and taxes will only make the situation worse.
Capping Net Metering power and reducing payments for supplying excess power to the grid are not going to solve the problem either. It will only encourage more consumers to switch to rooftop solar and use less electricity from the grid. Self consumption of the rooftop solar power saves significant energy costs for the consumer.
It seems the only way forward for the Pakistan government is to renegotiate the terms with the IPPs to significantly reduce grid power costs to address the growing cost gap between rooftop solar and the grid power.
Related Links:
Haq's Musings
South Asia Investor Review
Clean Energy Revolution in Pakistan
Pakistan Electric Vehicle Policy
Nuclear Power in Pakistan
Recurring Cycles of Drought and Floods in Pakistan
Pakistan's Response to Climate Change
IPP Contacts Bankrupting Pakistan
Renewable Energy for Pakistan
Net Metering in Pakistan
LNG Imports in Pakistan
Growing Water Scarcity in Pakistan
China-Pakistan Economic Corridor
Ownership of Appliances and Vehicles in Pakistan
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Riaz Haq's YouTube Channel
PakAlumni Social Network
34 comments:
"Grid electricity demand in Pakistan plunged in 2023 by nearly a sixth and a decline in 2024 would mark the first time in 16 years that annual electricity use has fallen consecutively.."
Isn't the fall in demand for grid electricity in Pakistan also due to many industries suspending production or shutting shop because of the ongoing economic crisis? For example, I see a sharp fall in production of autombiles in Pakistan during 2023 (79,513) compared to 2022 (235,454). Such industrial shutdowns will obviously result in a fall in demand for grid electricity. Though the increase in adoption of solar power is obviously a good news for developing economies, such falls in demand for grid electricity are more likely signs of an economy facing a crisis.
"It seems the only way forward for the Pakistan government is to renegotiate the terms with the IPPs to significantly reduce grid power costs to address the growing cost gap between rooftop solar and the grid power."
Only if the Chinese would agree. No investor likes such "renegotiations" that would potentially cut their profits. Pakistani authorities should have thought this through when the deals were signed.
Vineeth: "Isn't the fall in demand for grid electricity in Pakistan also due to many industries suspending production or shutting shop because of the ongoing economic crisis?"
Maybe. But the new additional solar capacity of 5,000 MW itself is about 12.5% of the total installed grid capacity of 40,000 MW. And the demand on the grid went down by about 10%.
"In fiscal year 2023, Pakistan’s total electricity consumption, as measured in terms of sales, amounted to 112,891 GWh, with 97,337 GWh coming from ex-Wapda distribution companies (Discos) and 15,554 GWh from K-Electric. This represents a decline from the 124,629 GWh consumed in FY2022....... According to Power System Statistics 2023, 47 per cent of electricity consumption comes from residential load".
https://www.dawn.com/news/1825812
Brofessor sb,
But the new additional solar capacity of 5,000 MW itself is about 12.5% of the total installed grid capacity of 40,000 MW. And the demand on the grid went down by about 10%.
This is not an apple to apple comparison of course. As solar power plants have much lower capacity utilisation than conventional. 5000 MW additional would represent about 9 billion unit of actual generation, which I suppose more or less offsets the 12 billion units lost from the grid.
Nonetheless, it is great to hear that the solar industry is doing well in Pakistan. Hopefully the govt wont take steps to curb growth of this industry.
Regards
At the time the Sahiwal thermal power plant was being built, I did the calculations --
(a) the Chinese were charging 50% more than equivalent plants being built in India and Vietnam
(b) dawn.com had some figures about the coal import and transport for the plant. the Indian National Thermal Power Corporation was providing wholesale power in Delhi at a unit cost equal to just the coal import and transport cost for the Sahiwal plant. (Then think of the other operations costs and the repayment of the investment.)
How can Pakistan be internationally competitive with the world with such expensive power? The economic isolation of Pakistan from India makes absolutely no sense. Like it or not, the subcontinent is one economic unit.
Arun: "the Chinese were charging 50% more than equivalent plants being built in India and Vietnam"
Chinese IPP agreements are not unique to China; all IPPs operating in Pakistan have similar agreements based on an IPP policy adopted in the 1990s to attract investment in the power sector.
Please read this post I wrote on it back in 2013: https://www.riazhaq.com/2013/05/pakistanis-suffer-load-shedding-as.html
The biggest issue with this policy is US dollar indexing of payments, especially because of the huge currency depreciation of PKR in the last decade.
In a blog post published in Financial Times, Dr. Kamal Munir of Cambridge University's Judge Business School blames the IPP contracts signed as part of the power privatization in 1990s.
“The 1994 privatization of the energy sector offered investors generous returns and created pricey overcapacity,” he told Financial Times. “This created an expensive legacy which is the real problem of today’s energy crisis.” Unless that problem is dealt with, he sees no light at the end of the energy tunnel.
He says Pakistan’s government, helped by the World Bank, “sweetened” its energy privatisation with attractive conditions, fearing it wouldn’t be able to attract investors otherwise. It guaranteed a 12 to 15 per cent annual return (indexed in dollars, not rupees), gave tax breaks and paid interest on private funding – more expensive for the government than providing the funding itself. ”The deal was too good to be true for investors,” Munir says.
Munir says the model turned out to be badly constructed in terms of creating value for the government and people of Pakistan. Even in an environment of economic growth and efficient energy generation, it would have been hard for the government to finance the plan. But since both have been absent, it became nearly impossible to pay for privatised energy.
Since there were no incentives to be fuel-efficient, most private investors chose to build plants using furnance oil as fuel because of their low construction costs and short lead times. This backfired as the oil price has trebled since the 1990s. Variable costs, and therefore prices to consumers, are at unsustainable levels. “No wonder many consumers can’t afford to pay their bills,” Munir says.
To make things worse, the government neglected to step on the brakes when its generous conditions attracted too many investors. Assuming economic growth would continue, it allowed too much capacity to be built and guaranteed the same return on that extra capacity, whether it was used or not.
Munir says the government should develop new power plants using cheaper fuels, and that this shouldn’t be a problem in a country with an abundance of coal, waterways and sun.
But Pakistan must first escape its vicious payment cycle.
“We need to get out of the the current deals,” says Munir. But at what cost, and does this imply default? “Your guess is as good as mine,” the academic admits.
The macroeconomics of electricity tariffs
https://www.thenews.com.pk/print/1190204-the-macroeconomics-of-electricity-tariffs
The macroeconomic landscape and power tariffs in Pakistan undergo quarterly adjustments, driven by a medley of factors. For instance, data from the Sahiwal coal power plant illustrates how these variables impact electricity generation costs and, consequently, power tariffs. Exchange rates are a linchpin in the power tariff equation, affecting the cost of imported fuels for power generation. From a reference period of 2016 and the exchange rate of Rs104.594/USD, the rupee has depreciated sharply to Rs278.500/USD in the April-June 2024 quarter. The tariff has been indexed to the US dollar and it reflects increases in various costs: fixed operating and maintenance costs have risen by 235 per cent, return on equity has increased by 184 per cent, debt repayment has gone up by 169 per cent, and interest charges have surged by 343 per cent.
Interest rates, both domestic and international, also bear heavily on power tariffs. The three-month KIBOR (Karachi Interbank Offered Rate) surged from 6.150 per cent to 21.990 per cent, while the three-month LIBOR (London Interbank Offered Rate) climbed from 1.380 per cent to 5.560 per cent. These higher rates inflate the cost of borrowing for power generation companies, with the cost of working capital soaring from Rs0.1541/kWh to Rs1.2568/kWh. The interest charge component of the tariff similarly rose from Rs0.3458/kWh to Rs1.5314/kWh, reflecting the escalating costs of servicing local and foreign debt.
Inflation weaves its influence through every aspect of power generation costs. The US CPI (Consumer Price Index) increased from 246.819 to 310.326, while Pakistan’s N-CPI (National CPI) surged from 131.010 to 260.010. These inflationary pressures push up prices for goods and services necessary for power plant operation and maintenance. For instance, fixed O&M (Operations and Maintenance) costs for foreign components rose from Rs0.1601/kWh to Rs0.5360/kWh, and for local components, from Rs0.1976/kWh to Rs0.3922/kWh.
This dramatic slide has skyrocketed the cost of imported coal from Rs13,605 per ton to Rs73,901.55 per ton. The ripple effect of this spike in import costs is a steep increase in power generation costs, inevitably passed on to consumers through higher tariffs.
Fluctuating global coal prices and calorific values further compound the issue. The weighted average price of imported coal has shot up, driving overall energy production costs higher. This is reflected in variable O&M costs for foreign components, which rose from Rs0.0763/kWh to Rs0.2554/kWh, and for local components, from Rs0.0628/kWh to Rs0.1246/kWh. The combined effect of these macroeconomic factors is a significant rise in power tariff components. The total capacity charge escalated from Rs3.2696/kWh in the reference period to Rs10.3445/kWh for the April-June 2024 quarter. The variable component of energy purchase price similarly climbed from Rs0.1391/kWh to Rs0.3800/kWh showing 173 per cent increase.
Hope things change for the better for Pakistanis. It's energy consunption per capita was slightly higher in 1999 at 416.82kg of oil equivalent compared to India at 413.99kg. Since then Pakistan has remained nearly flat and in 2022 it was 431kg versus 630.9kg for India.
Nitin: "Since then Pakistan has remained nearly flat and in 2022 it was 431kg versus 630.9kg for India"
This data is outdated 2014 figures from World Bank
https://data.worldbank.org/indicator/EG.USE.PCAP.KG.OE?locations=IN
BTW, Pakistan's official data doesn't take into account the massive amount of oil smuggled from Iran into Pakistan.
https://asia.nikkei.com/Politics/International-relations/Iran-smuggles-1bn-worth-of-fuel-into-Pakistan-annually-report
Last year, some $1.02 billion in Iranian petrol and diesel was smuggled across the 900-kilometer-long Iran-Pakistan border. That accounted for about 14% of Pakistan's yearly consumption, and resulted in losses "to the exchequer" of about $820 million, the report said.
Solar energy is the only viable option amid skyrocketing electricity bills and after Punjab and Sindh, the government of Khyber Pakhtunkhwa is also planning to distribute solar panels among the needy ones.
https://pakobserver.net/kp-govt-solar-scheme-2024-check-eligibility-for-2kilowatt-solar-setup/
The provincial government of KP now came up with program to distribute free solar panels among 1lac households in the region. CM Gandapur’s advisor on Finance, Muzammil Aslam, revealed this initiative.
Muzammil said each household will receive a complete 2-kilowatt solar setup, batteries, DC fans, and inverters. He explained that government is looking to equip 1lac households with these complimentary solar panel systems.
He also highlighted KP’s existing infrastructure of over 90 power plants that produce electricity at rates between Rs 6 to Rs 7 per unit, contrasting sharply with the Rs 27 per unit charged by the Water and Power Development Authority (WAPDA).
KP Solar Scheme
In the first phase, only protected consumers will be able to apply for government funded solar scheme.
Solar Scheme 2024
Punjab CM Maryam Nawaz and Sindh CM Murad Ali Shah announced electricity to over 200,000 households in partnership with the World Bank. Each household will receive complete solar system for Rs 7,000, encompassing solar panels, charge controllers, and batteries to power one fan and three LED bulbs.
Maryam Nawaz also sanctioned distribution of 1-kilowatt solar systems to thousands of families. This decision was made during a meeting chaired by CM Maryam Nawaz to evaluate energy projects. The solar systems will be provided to low-consumption electricity users, including two solar panels, batteries, an inverter, and associated wiring.
Punjab Govt bringing solar system for 45 lakh consumers: Maryam
Chief Minister of Punjab Maryam Nawaz Sharif, chairing the 11th meeting of the provincial cabinet on Tuesday, said that they were bringing solar system for 45 lakh consumers who spend up to 500 units. She said, ”Due to increase in electricity bills, there is anxiety among the public, together with my team, have found a … Continue reading Punjab Govt bringing solar system for 45 lakh consumers: Maryam
Dr Gohar Ejaz
@Gohar_Ejaz1
I'm sharing data from NEPRA for Jan 24 to March 24 showing a capacity payment of 150 billion PKR per month. Please note how this amount is distributed to various IPPs, with half running below 10% capacity. Four power plants are receiving 1000 crores per month each with #zero power supply.* This money, our halal income, is being given to 40 families under the guise of capacity charges. These plants should be declared merchant plants, where payments are made only for electricity produced, and we should buy from the cheapest suppliers. The government should not do business at the expense of the people of Pakistan. NEPRA must include representation from all large consumers in its distribution and management. This exploitation must end.
#Pakistan #ElectricityBill #IPPs
https://x.com/Gohar_Ejaz1/status/1814597980629966990
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Pakistan faces a 70% electricity price hike due to hidden charges - Profit by Pakistan Today
https://profit.pakistantoday.com.pk/2024/07/11/pakistan-faces-a-70-electricity-price-hike-due-to-hidden-charges/
During the seminar organized by the Centre for Economic and Energy Journalists (CEEF) in collaboration with SDPI, Dr. Waleed noted alarming increases in capacity payments, citing a 216% surge over five years in the capacity charges of an imported coal-fired power plant in Punjab. He attributed this escalation to factors like US dollar indexation and interest payments on circular debt, which now constitute 70% of the overall tariff.
Dr. Waleed underscored that the burden of these costs is disproportionately higher on smaller consumers, terming the current tariff structure as regressive. He urged the government to renegotiate IPP contracts, echoing past efforts that successfully ended US dollar indexation for some plants.
Ahad Nazir, another SDPI energy expert, pointed out that declining grid consumption, coupled with substantial investments in power generation without commensurate upgrades in transmission infrastructure, has led to excessive capacity and inflated capacity payments.
Efforts are underway to decentralize tariff structures at distribution companies to promote competitive pricing, although significant changes are not expected in the near term.
In conclusion, the escalating hidden costs embedded in Pakistan’s electricity tariffs are exacerbating affordability challenges for consumers and necessitate immediate policy interventions to stabilize
‘Sky-high power tariffs hindering exports’ - Business
https://www.dawn.com/news/1846800
“We are all sinking under the present Rs2 trillion capacity payments to 40 owners of these closed and partially operational IPPs,” Mr Ejaz told Dawn on Friday. He said that rising energy prices have affected industrial expansion, particularly in textiles and garments.
Mr Ejaz said that 53 IPPs are completely closed, but still receiving regular capacity payments from the government for not producing a single unit. He questioned the justification for such payments, which are collected from consumers and businesses.
In 2015, 13,000MW was consumed, and the capacity fee was Rs200bn with an installed capacity of 20,000MW. Mr Ejaz said that the current capacity payment was Rs2tr and that the consumption in 2024 still remains at 13,000 MW, with an installed capacity of 43,400 MW.
Mr Ejaz claimed that the same consumer is being charged ten times the capacity charges for the same units. He went on to claim that power is generated at Rs35 (including fuel charges of Rs10.60 and Rs24 in capacity charges) and distributed by Discos to paying domestic consumers at Rs60, yet the government still loses trillions of rupees.
He said the solution was to increase growth and invest in export-oriented industries, regretting that exports were not conceivable given the current high energy prices.
Huasun Celebrates Successful Delivery of 100MW+ HJT Solar Modules to Pakistan - SolarQuarter
https://solarquarter.com/2024/08/01/huasun-celebrates-successful-delivery-of-100mw-hjt-solar-modules-to-pakistan/
Leveraging its leading HJT technology, Huasun has been actively engaging in the development of Pakistan’s solar industry. The company has partnered with several local factory owners and EPC companies, including E-Group, DSG, and ESL. Notably, in September 2023, Huasun signed a Memorandum of Understanding (MOU) exceeding 100MW with its strategic EPC partner E Group. Additionally, in early 2024, Huasun established an exclusive strategic distribution partnership with AE Power, a prominent local solar company, to ensure a steady supply of high-efficiency HJT products to Pakistan.
Huasun’s HJT products have been successfully integrated into multiple solar projects across Pakistan. Notable installations include industrial rooftops at the 5MW Tayyab Textile Mill, the 3MW Sarfraz Textile Mill, and the 3MW Nisar Spinning Textile Mill. Importantly, Huasun has delivered a substantial number of HJT modules with power outputs exceeding 720W to the region, demonstrating the company’s leadership in both power and efficiency of the commercial solar panels.
“As more projects are successfully completed and local customers continue to recognize and trust Huasun’s products, the company’s reputation and influence in Pakistan are steadily increasing. Surpassing 100MW in shipments makes Pakistan one of the most prominent regions in Huasun’s global journey.” Said Rana Farhan, Director- Middle East & Pakistan at Huasun.
Pakistan, located on the South Asian subcontinent, enjoys excellent solar conditions with nearly 3,000 hours of sunshine annually. However, the region also faces hot and dry climates, high electricity demand, and substantial electricity costs. In response, the local government has introduced a series of incentive policies and long-term plans for renewable energy, significantly promoting the rapid development of the photovoltaic industry. Consequently, residential and commercial solar installations in Pakistan have seen a notable increase.
Huasun’s HJT products are manufactured using advanced technology and reliable materials. By optimizing cell technology and encapsulation processes, the company has improved the photoelectric conversion efficiency and reliability of its products. With an impressive temperature coefficient of -0.24%/℃, HJT modules perform exceptionally well in high-temperature environments. Compared to conventional modules, they offer higher power and efficiency, making them a particularly reliable choice for the Pakistani market.
Layne Qiu, Sales Director of MEA & South Asia at Huasun, remarked, “Achieving 100MW shipment milestone to Pakistan is a crucial step for Huasun in the South Asian market. This accomplishment not only highlights the exceptional performance of Huasun’s HJT technology but also underscores the immense market potential of our products. We are confident that in the near future, we will expand our delivery to gigawatt-scale high-efficiency HJT products across South Asia, the Middle East and Africa, significantly advancing the local energy industry’s transformation and sustainable development.”
Faseeh Mangi
@FaseehMangi
Pakistan’s market for solar power is booming, propelled by a surge in imports from China, according to BloombergNEF.
The country imported some 13 gigawatts of solar modules so far the year, making it the third-largest destination for Chinese exporters
https://x.com/FaseehMangi/status/1821855549396279766
Solar is gaining traction in the South Asian nation following hikes in power prices over the past few years, with the latest increase in July triggering widespread protests. Pakistan's market for solar power is booming, propelled by a surge in imports from China, according to BloombergNEF.
https://www.bloomberg.com/news/articles/2024-08-09/pakistan-sees-solar-boom-as-chinese-imports-surge-bnef-says?embedded-checkout=true
Pakistan Sees Solar Boom as Chinese Imports Surge, BNEF Says – BNN Bloomberg
https://www.bloomberg.com/news/articles/2024-08-09/pakistan-sees-solar-boom-as-chinese-imports-surge-bnef-says/
(Bloomberg) -- Pakistan’s market for solar power is booming, propelled by a surge in imports from China, according to BloombergNEF.The country imported some 13 gigawatts of solar modules in the first six months of the year, making it the third-largest destination for Chinese exporters, according to a report by BNEF analyst Jenny Chase. Pakistan’s installed capacity to generate power is just 50 gigawatts. China is the world’s biggest producer of solar equipment.Solar is gaining traction in the South Asian nation following hikes in power prices over the past few years, with the latest increase in July triggering widespread protests. Higher rates have seen grid electricity consumption drop to the lowest in four years as many people switch to independent solar. “Pakistan’s market has the potential to continue to be very large,” said Chase. “If solar is solving the market’s power problems, there is no reason to expect a crash any time soon.”BNEF expects that the country will add between 10 gigawatts and 15 gigawatts of solar this year, mostly on homes and factories, making Pakistan the sixth-largest market in the world. Given the surge in imports, that figure could end up being far higher — or growth could stall if the grid situation improves, prices fall, or the market of middle-class people who can afford solar panels on their roofs saturates, according to the report.
There are other complications in accurately assessing the market and its prospects, said Chase. Those include wide discrepancies between official data on installations and imports, as well as claims last year that solar imports were used in money laundering schemes.
Pakistan Sees Solar Boom as Chinese Imports Surge, BNEF Says – BNN Bloomberg
https://www.bloomberg.com/news/articles/2024-08-09/pakistan-sees-solar-boom-as-chinese-imports-surge-bnef-says/
(Bloomberg) -- Pakistan’s market for solar power is booming, propelled by a surge in imports from China, according to BloombergNEF.The country imported some 13 gigawatts of solar modules in the first six months of the year, making it the third-largest destination for Chinese exporters, according to a report by BNEF analyst Jenny Chase. Pakistan’s installed capacity to generate power is just 50 gigawatts. China is the world’s biggest producer of solar equipment.Solar is gaining traction in the South Asian nation following hikes in power prices over the past few years, with the latest increase in July triggering widespread protests. Higher rates have seen grid electricity consumption drop to the lowest in four years as many people switch to independent solar. “Pakistan’s market has the potential to continue to be very large,” said Chase. “If solar is solving the market’s power problems, there is no reason to expect a crash any time soon.”BNEF expects that the country will add between 10 gigawatts and 15 gigawatts of solar this year, mostly on homes and factories, making Pakistan the sixth-largest market in the world. Given the surge in imports, that figure could end up being far higher — or growth could stall if the grid situation improves, prices fall, or the market of middle-class people who can afford solar panels on their roofs saturates, according to the report.
There are other complications in accurately assessing the market and its prospects, said Chase. Those include wide discrepancies between official data on installations and imports, as well as claims last year that solar imports were used in money laundering schemes.
China adopted classic cutthroat pricing to shift a record 120,427 megawatts (MW) of solar module capacity exports in the first half of 2024, with Pakistan being Asia's largest single market, accounting for 10,450 MW.
Key to the strong export flow was a steep cut in module prices, which averaged 13.7 cents per megawatt over the first half of 2024, compared to an average of 18 cents/MW for the whole of 2023.
https://mettisglobal.news/pakistan-emerges-as-largest-asian-buyer-in-chinas-record-solar-exports/
The Netherlands remained the top country market for China's modules, taking in 23,421 MW of capacity during the opening half of the year.
Brazil was China's second largest market during the first half of the year, snapping up 10,511 MW of capacity.
Pakistan was the world's third and Asia's largest single market, accounting for 10,450 MW.
Meanwhile, India snapped up 8,324 MW.
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Key Markets
Europe was the top destination for China's solar modules, accounting for 43% of the total, or 52,158 MW.
That total was down 20% from the same period in 2023, as high interest rates, economic growth concerns and trade tensions with China stifled solar installation demand across the continent.
Nonetheless, Europe's purchase total was the second highest tally for a half-year period behind the first half of 2023.
The Netherlands remained the top country market for China's modules, taking in 23,421 MW of capacity during the opening half of the year.
While that total was 25% less than during the opening half of 2023, The Netherlands' purchases were still more than twice the size of any other nation during the first half of the year.
Spain, Germany and Italy were also notable buyers in Europe, but all also showed steep year-on year contractions in purchase volumes, Ember data shows.
Brazil was China's second largest market during the first half of the year, snapping up 10,511 MW of capacity.
That total was up 10% from the same period in 2023, and contrasts with a slight contraction in imports by the Latin American region as a whole during the first half of the year.
Growth Areas
Asia was the second largest regional destination for China's solar parts, accounting for a record 32,109 MW of capacity, or around 27% of the total.
That total was 86% more than during the first half of 2023, and was driven mainly by strong growth in South Asia. Meanwhile, India snapped up 8,324 MW.
Both markets recorded more than 200% jumps in solar imports from the same period in 2023, and represent key growth markets for China in the future.
The Middle East was another key destination for China so far this year, with exports to the region topping 13,000 MW for the first half of the year to account for a record 11% share of China's total solar panel and parts exports.
That compares to 6,228 MW during the first half of 2023, and was driven in large part by strong purchases by Saudi Arabia (7,649 MW), United Arab Emirates (1,892 MW) and Oman (1,396 MW).
Elsewhere, North America remained a tiny market for Chinese panels and parts due to the ongoing trade spat between China and the United States, while Africa's purchases shrank by around 9% from the first half of 2023, and accounted for only 4.3% of China's total sales
Scatec starts operating 150MW solar projects in Pakistan - PV Tech
Norwegian renewable energy developer Scatec has started commercial operation of 150MW solar PV plants in Pakistan.
The solar PV projects boast an annual generation capacity of 300GWh. Scatec signed a 25-year power purchase agreement (PPA) with the Central Power Purchasing Agency of Pakistan to supply energy in the South Asian country.
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In a first, women engineers set up 24 kW solar system in Pakistan
Five exceptional female engineers, trained at NED University, became first women to participate in the project
https://tribune.com.pk/story/2487267/in-a-first-women-engineers-set-up-24-kw-solar-system-in-pakistan
KARACHI:
Female engineers have successfully installed a 24-kilowatt solar system on the roof of Karachi's Hussaini Orphanage for the first time in Pakistan's history.
With hands-on support from KfW DEG Impuls and Develop, five exceptional Ladies Fund engineers—Areeba Rashid, Iman Batool, Farhan Anjum, Muskan Iqbal, and Rahemeen Haider Ali—completed the installation, becoming the first women in Pakistan’s history to be paid for solar roof work. They are now recognized as official installers for Ladies Fund Energy.
This achievement was part of the Ladies Fund Energy initiative, aimed at empowering female engineers in Pakistan. Certified female engineers trained at NED University completed the installation, which included six lithium batteries, marking the first-ever solar roof installation by women in the country.
The project, led by Dawood Global Foundation (DGF) in partnership with Ladies Fund Energy Pvt. Ltd., was designed to integrate women into the energy sector. The training of 28 female engineers from NED University was supported by KfW and Develop, with the female team taking on roles as both interns and installers to complete the solar installation at the orphanage.
Dr. Mohsin Aman provided internationally recognized "Solar Roof Installation" training at NED University, while Ladies Fund Energy designed a high-quality solar roof specifically for the orphanage. The success of this project was met with overwhelming interest, as 86 female engineers were waitlisted for the course. DGF plans to extend this training to girls from interior Sindh in the next phase.
Tara Azra Dawood, CEO of Ladies Fund Energy, highlighted the initiative’s dual purpose of training and recruiting female engineers for the Ladies Fund, while also positioning them as key players in the broader energy sector. She encouraged greater participation to enhance women’s representation in the field and contribute to a greener Pakistan, expressing gratitude to Hussaini Orphanage for entrusting the female engineers with this important task.
Karachi Mayor Murtaza Wahab, who attended the ceremony as the chief guest, expressed pride in the dynamic female engineers of Karachi, recognizing them as the pioneering installers of Ladies Fund Energy. He also promised to provide land and funds for training 100 female engineers at NED University through DGF, in collaboration with the government and KMC and granted Ladies Fund Energy the opportunity to pitch their tender for the solarization of KMC buildings.
Giving A Fair Deal To Distributed Solar In Pakistan
The author is a freelance contributor interested in sustainable energy and power sector policy, planning, and development. He can be reached at: msrahim@hotmail.com
https://thefridaytimes.com/18-Aug-2024/giving-a-fair-deal-to-distributed-solar-in-pakistan
Distributed solar needs a level-playing field to compete with conventional options. Government should provide an enabling legal, regulatory umbrella and an equitable decision-making framework to objectively evaluate every option
For much of its history, the electric supply industry (ESI) in Pakistan has enjoyed the status of being the most stable business and a favourite of investors. This was mainly due to "economies of scale" in generation, extended distances between load centres and good generation sites (especially, hydro), and the benefits that interconnecting isolated systems offered by way of reserve sharing, energy trading, and reliability. Alas, no more!
The advent of small gas-fired combined cycle power plants has ended the golden era of the large, central-station supply systems. Distributed energy generation technologies, particularly solar photovoltaic (PV), have dealt the proverbial death blow to the unchallenged reign of the traditional way of governing the ESI — using a central-station portfolio of mega-sized generation projects and delivering electricity produced by them to loads located far away.
Distributed solar technologies—located behind-the-metre or anywhere else in the distribution system—have been making rapid inroads into power grids across the world. Pakistan is no exception.
Pakistan did show an interest in solar technologies, but this has remained focused on their deployment in the power grid. Though important, it's not the only or even the best avenue for their uptake. The only initiative from the government to promote distributed solar has been its net metering schemeintroduced in 2015. Most other behind-the-metre solar PV systems have not merited any incentive from our governments.
Precise statistics for distributed solar in the country are not available from official sources but a recent report by "pv magazine" terms it "booming" as the import of PV panels saw a rise from 2.8 GigaWatt (GW) in 2022 to 5 GW in 2023 and may reach 12 GW in 2024. By June 2023, the total number of net metering connections had reached 63,703 with a cumulative capacity of 1,505 MW. The annual addition of new consumers to this list was around 1,596, with a cumulative capacity of 221 MW in 2023.
These statistics indicate that the number of net metering connections and their magnitude are still low, but electricity consumers in Pakistan are opting for non-grid interactive systems in rapid strides to reduce their electricity bills which have become unaffordable.
The rigid mindset of power sector functionaries, from top to bottom, is directly responsible for this alarming trend. They have treated consumers as captives to the grid and have used them to dump all the misgovernance costs. They are still not willing to wake up to the new reality that the consumers now have multiple choices. Distributed solar is just one of these and is destined to grow even more if the grid supply remains unreliable and expensive.
Distributed solar offers many benefits. It can avoid investments in the grid and reduce losses, help manage demand, support grid operation, avoid environmental pollution, spur local industrialisation, promote employment, reduce reliance on imported fuels, and enhance national security and sustainability.
Their presence in the grid does pose some technical challenges. In addition to the two-way flow of power, they add to issues like loss of frequency and voltage control, risks of backfeed to the upstream transmission systems, and impair the power quality.
K-Electric to Double Pakistan's Solar Energy Capacity in Next 2 Years
https://propakistani.pk/2024/08/19/k-electric-to-double-pakistans-solar-energy-capacity-in-next-2-years/
K-Electric Limited plans to add 640 megawatts of clean energy to its portfolio within the next two years which would double Pakistan’s solar energy capacity, reported Bloomberg.
Chief Strategy Officer Shahab Qader Khan said the bidding process for this begins on August 19 (today) and will close next month. The projects will include 200 megawatts of hybrid solar wind generation.
Solar energy makes up just 1 percent of the national energy mix, and K-Electric wants to alleviate some of the prevalent burden of electricity bills on residential consumers by reducing the country’s dependence on expensive fuel imports.
Looking ahead, K-Electric plans to add 1,200 megawatts of renewable energy over the next five years, while scaling back on costly energy sources like liquefied natural gas and fuel oil.
Pakistan currently faces high electricity costs due to heavy reliance on fossil fuel imports. It is pertinent to mention that monthly power bills have surged by 155 percent since 2021 and now exceed rent expenses for many households across the country.
Solar projects receive lowest-ever tariff bid
Bid of Rs11.2 per unit marks pivotal shift in renewable energy sector
https://tribune.com.pk/story/2489390/solar-projects-receive-lowest-ever-tariff-bid
KARACHI:
In a landmark development, K-Electric's (KE) 150-megawatt solar energy projects in Balochistan have achieved the country's lowest-ever tariff bid, setting a new industry benchmark and marking a pivotal shift in the renewable energy sector.
A bid of Rs11.2 per unit, revealed during a ceremony, underscores the trust in private sector-led initiatives, particularly in the context of Pakistan's ongoing economic challenges. Earlier, Bloomberg News highlighted KE's endeavours to nearly double Pakistan's solar capacity by adding 640MW of clean energy to its portfolio in the next two years.
It was revealed that the bidding process for those projects began in August and would conclude in September 2024. The portfolio, which includes 200MW of hybrid solar-wind generation, is also a critical component of KE's strategy to reduce reliance on expensive fossil fuels and lower the country's overall import bill.
The 640MW of projects, currently in the pipeline, have been divided into three tranches: 150MW solar projects in Balochistan, a 270MW project in Sindh and a 220MW site-neutral project that will be the first hybrid solar and wind energy venture. These projects are expected to significantly increase the share of renewable energy.
Pakistan has long been plagued by high electricity prices, driven by its dependence on costly fossil fuel imports. With monthly electricity bills having risen 155% since 2021, often surpassing rent costs for many families, the shift towards more affordable and sustainable energy sources is both urgent and necessary.
Currently, solar energy accounts for just 1% of the energy mix, with a total capacity of 630MW. Doubling this capacity could provide much-needed economic relief to consumers and help stabilise the energy sector.
The recent financial bid opening event in Karachi was attended by representatives from both international and local entities, including JCM Power Group and Hecate Global Renewables from North America, and Pakistani companies such as Atlas Power, Hub Power Holding Co and Sapphire Electric Co.
Future of Net-Metered Solar Power in Pakistan
https://ieefa.org/resources/future-net-metered-solar-power-pakistan
Pakistan's current Distributed Generation and Net Metering Regulations offer incentives such as high buyback rates, fixed long-term generation licenses, and generous allowances for installed capacity. These have resulted in ideal payback periods, leading to a surge in net-metered rooftop solar photovoltaic (PV) capacity across the country.
The current policy offers 2-4 year payback periods for 5-25 kilowatt (kW) net-metered solar PV systems. Power utilities are concerned that higher penetration of distributed solar could place the distribution infrastructure at risk of failure and increase capacity payments on non-net-metered consumers.
The government is considering reducing buyback rates and a shift to net billing from net metering, which could increase payback periods for consumers with a higher self-consumption ratio but may incentivize oversized systems. A net billing scheme would therefore need to limit system size. Despite all policy shifts, the payback periods remain under 5 years
For the government, while maintaining or improving buyback rates can encourage more renewable energy adoption, this must be combined with grid optimization and digitization. For consumers, choosing the right system size for their consumption profile can significantly impact their return on investment.
Rationalizing Incentives for Solar Photovoltaic (PV) in Pakistan
https://ieefa.org/sites/default/files/2024-08/IEEFA%20Fact%20Sheet_Rationalizing%20Incentives%20for%20Solar%20PV%20in%20Pakitan.pdf
The recent surge in rooftop solarization in Pakistan has raised concerns among power distribution companies about
system reliability and increased capacity payments.
The government is considering several changes to current energy policies, including reducing buyback rates,
limiting system sizes, and transitioning from net metering to net billing.
However, even with the proposed changes, the payback period for 5-25 kilowatt (kW) distributed solar PV systems
remains below the 5-year threshold
A mere 50 megawatts (MW) of netmetered solar capacity was added
between 2016 and 2019. However,
consistently high electricity tariffs
and a substantial decline in solar
panel prices have led to a recent
surge in solar PV additions.
Pakistan’s abundant
solar potential offers
specific yields of 3.8
kilowatt-hours per
kilowatt peak (kWh/
kWp) to 6kWh/kWp.
Since 2022, net-metered solar PV
installations have nearly doubled, with
764MW installed in 2023.
In June 2024, Pakistan’s
on-grid net-metered solar PV
capacity was approximately
2200MW.
The recent surge in rooftop solarization in Pakistan has raised concerns among power distribution companies about
system reliability and increased capacity payments.
The government is considering several changes to current energy policies, including reducing buyback rates,
limiting system sizes, and transitioning from net metering to net billing.
However, even with the proposed changes, the payback period for 5-25 kilowatt (kW) distributed solar PV systems
remains below the 5-year threshold
Under the current mechanism, which offers the prevailing National Average Power Purchase Price (NAPPP) of PKR 27 per
kilowatt hour (kWh) as the buyback rate, the relatively higher per kW cost of smaller 5kW and 7.5kW systems results in
extended payback periods ranging between 2.4-4 years. As the system size increases, the payback period decreases, with
a 25kW system recording the shortest payback period of 1.74 years.
• Reducing the buyback rate to the National Average Energy Purchase Price (NAEPP) of PKR 9.69/kWh could lead to a
10%–56% increase in the payback period, depending on the level of consumption and system size. Consumers with smaller
installations and lower consumption experience longer payback periods.
• Reducing the buyback rate to PKR 15/kWh would only result in a 6% increase in the payback period for consumers with
100% self-consumption, while for lower-consumption profiles it may increase by 25%.
• Shifting to a net billing mechanism would increase the payback period for consumers with a higher self-consumption ratio
but could incentivize the installation of oversized systems.
A solar power policy crisis for Pakistan - Asia Times
https://asiatimes.com/2024/05/a-solar-power-policy-crisis-for-pakistan/
Search Labs | AI Overview
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As of August 2024, Pakistan's net metering regulations allow excess energy from solar systems to be sold back to the grid at the National Average Power Purchase Price (NAPPP). This price reflects the average cost per unit of power that the DISCOs purchase.
In June 2024, some speculated that the government might introduce changes to the solar panel policy, including a shift from net metering to a gross metering system. However, the Federal Minister for the power division, Ahmed Khan Lagari, has denied these changes and assured the public that the existing net metering system will remain in place.
A bidirectional meter, which measures both the electricity generated and consumed, can help consumers reduce their reliance on expensive grid electricity. This system can also make solar investments financially viable, promote energy independence, and reduce the strain on the national grid.
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Optimizing solar incentives and grid infrastructure in Pakistan can benefit power distribution companies and energy consumers | IEEFA
https://ieefa.org/articles/optimizing-solar-incentives-and-grid-infrastructure-pakistan-can-benefit-power
The regulations created the framework for the successful adoption of distributed renewable energy in the country, with approximately 2.2 gigawatts (GW) of net-metered rooftop solar PV capacity connected to the grid by June 2024.
Budget 2024-25: Production of solar panels, inverters and batteries becomes cheaper - Must Read - Aaj English TV
https://english.aaj.tv/news/330365159/budget-2024-25-production-of-solar-panels-inverters-and-batteries-becomes-cheaper
According to the finance bill, the government has eliminated all taxes on machinery and equipment used in the manufacturing of lithium-ion batteries, most of these were subjected to taxes ranging from 5% to 20%.
----------------------
Pakistan’s energy system strained by surge in solarization, battery tech
https://www.thenews.com.pk/print/1215486-pakistan-s-energy-system-strained-by-surge-in-solarization-battery-tech
ISLAMABAD: The rapid solarization and advancements in battery technology are increasingly challenging Pakistan’s existing energy system.
The influx of over 7,000 megawatts of imported capacity, coupled with some industrialists and bulk consumers installing in-house plants of up to 1.5 megawatts, threatens to disrupt long-term agreements with Independent Power Producers (IPPs).
This situation is exacerbated by mounting frustration among power consumers, who are being burdened with substantial multi-billion-rupee capacity charges on their monthly bills.
The provincial governments, especially Punjab and Sindh’s distribution of solar panels to the public, will further pressurise the system, as they will now be drawing less from the grid and so the burden of capacity charges will increase and ultimately the tariff, which will further take away consumers from the grid power.
“Various bulk consumers have done aggressive solarization, even they installed capacity of up to 1.5 megawatts and have kept the grid at backup,” Chairman Nepra Waseem Mukhtar said while presiding over a public hearing on Wednesday adding, “It’s [solarization] a threat.”
The Nepra chairman said that this 7,000 MW imported solar capacity is not for only rooftops, bulk consumers are also installing their big capacities. He also tasked the CPPA with conducting a study on solar energy usage, mapping and submitting a report to Nepra.
Central Power Purchasing Agency (CPPA) while pleading the case on behalf of Discos reported that electricity consumption in June 2024 was 10 percent lower than the reference period consumption, while two percent less than last year.
Waseem Mukhtar said that the government has launched a study to determine if Pakistan requires additional power generation capacity. He emphasized the need for a logical approach to adding more electricity to the national grid. The study is also evaluating that Commercial Operating Dates (CoDs) for some plants may be postponed, he said, mentioning that the study will determine which plants can be retired early.
Electricity Tariff for Pakistan Residential Consumers- July 2024
https://arynews.tv/electricity-tariff-for-pakistan-residential-consumers-july-2024/
ISLAMABAD: The federal cabinet approved significant increase in the electricity tariff for residential consumers using 100 to 500 units per month, ARY news reported.
According to the details, the new basic tariff is fixed at Rs 48.84 per unit, which will increase to Rs 57.63 per unit after sales tax. With adjustments and other taxes, the maximum electricity tariff will exceed Rs 65 per unit.
As per the decision taken by the federal cabinet, the monthly tariff for consumers using 1 to 100 units is proposed to Rs 23.59, while those using 101 to 200 units will have to pay Rs 30.07 per unit.
Similarly, the tariff for those consumers using 201 to 300 units will increase to Rs 34.26, and those using 301 to 400 units will have to pay Rs 39.15 per unit.
The consumers using 401 to 500 units will be charged the most as they will have to pay Rs 41.36 per unit
Pakistan’s power sector caused a Rs403 billion loss in FY2022-23, revealed the National Electronic Power Regulatory Authority (NEPRA) report earlier.
The progress report of the power distribution companies including K-Electric was released by the NEPRA, indicating nine distribution companies including K-Electric failed to achieve 100pc recovery.
The line losses and low recoveries caused a loss of Rs403 bln to the national kitty, the report said. The report highlighted that the companies did not buy the electricity as per the assigned quota.
The companies carrying out loadshedding ‘deliberately’ as they are not buying electricity as per their quotas, the report said.
According to the International Renewable Energy Agency (IRENA), Pakistan's total solar installed capacity was 1,244 megawatts as of 2023, an increase of 17% compared to 2021. The country's government has proposed several efforts to raise the percentage of solar energy. Source: https://www.mordorintelligence.com/industry-reports/pakistan-solar-energy-market
https://www.mordorintelligence.com/industry-reports/pakistan-solar-energy-market#:~:text=According%20to%20the%20International%20Renewable,the%20percentage%20of%20solar%20energy.
Pakistan Solar Energy Market Analysis
The Pakistan Solar Energy Market size in terms of installed base is expected to grow from 1.41 gigawatt in 2024 to 9.53 gigawatt by 2029, at a CAGR of 46.55% during the forecast period (2024-2029).
Over the medium term, increasing adoption of solar PV systems, the declining price of solar panels and installation costs, and rising environmental concerns about the use of fossil fuels are the factors driving the market's growth.
On the other hand, the market is expected to be hampered by issues like transmission and distribution losses, a need for a solidified renewable energy policy, and unpredictability in the continuity of power supply.
However, Pakistan has abundant solar irradiance and receives solar energy almost yearly. This factor presents a phenomenal opportunity to exploit solar energy from the most irradiated sites in the country, combined with foreign investments. Additionally, the off-grid supply through micro- and mini-grids to electrify rural communities of the country and the integration of renewable energy sources in generation, transmission, and distribution systems are some factors expected to create opportunities for the market in the future.
Pakistan Solar Energy Market Trends
The Utility Sector is Expected to Dominate the Market
Solar energy converts energy from sunlight into electricity directly using photovoltaics (PV) or indirectly using concentrated solar power.
Due to the falling cost of solar modules and the number of upcoming projects, the utility sector will likely be the most significant part of the Pakistani solar energy market over the next few years.
The Pakistani government has established lofty objectives, such as 30% of the nation's power coming from renewable sources by 2030. Through the Alternative Energy Development Board, the government is attempting to construct solar power facilities nationwide to meet these objectives.
According to the International Renewable Energy Agency (IRENA), Pakistan's total solar installed capacity was 1,244 megawatts as of 2023, an increase of 17% compared to 2021. The country's government has proposed several efforts to raise the percentage of solar energy.
In December 2023, Orient Energy Systems and JA Solar announced they completed Pakistan's first n-type utility-scale photovoltaic power plant project. The project adopts JA Solar's n-type high-efficiency modules, which have a capacity of 26 megawatts. It is installed on the premises of Lucky Cement plant, Pakistan's largest cement manufacturer.
In March 2024, Hanersun Technologies agreed with My Energy, a local company, to construct a 500MW solar system in the country. The project is expected to have an investment of around USD 700 million.
Hence, with government support, these projects are expected to make the utility sector the dominant force in Pakistan's solar energy industry in the coming years. Source: https://www.mordorintelligence.com/industry-reports/pakistan-solar-energy-market
In Pakistan, the residential sector is the largest consumer of electricity, followed by the industrial sector:
Residential: The largest consumer of electricity, accounting for 47% of total electricity consumption in 2021–2022. The average household consumes 2,469 kWh per year.
Industrial: Consumed 28% of total electricity consumption in 2021–2022.
Commercial: Consumed 7% of total electricity consumption in 2021–2022.
Agricultural: Consumed 9% of total electricity consumption in 2021–2022.
Other sectors: Consumed 8% of total electricity consumption in 2021–2022.
Pakistan's electricity is mainly generated by fossil fuel-based thermal power plants, which account for 62% of the total electricity generation. Hydroelectric power plants account for 26% of the total annual electricity.
https://finance.gov.pk/survey/chapter_24/14_energy.pdf
https://www.mdpi.com/2075-5309/11/11/566#:~:text=Pakistan%20is%20among%20those%20countries,7%5D%20(Figure%201).
Arif Habib Limited
@ArifHabibLtd
Power Generation drops 17.4% YoY in Aug'24
(Grid) Power generation declined by 17.4% YoY to arrive at 13,179 GWh (17,714 MW) during Aug'24, compared to 15,959 GWh (21,450MW) during SPLY. Moreover, on a MoM basis, power generation witnessed a dip of 11.4%. For 2MFY25, power generation fell by 8.9% YoY to 28,059 GWh (18,857 MW) compared to 30,798 GWh (20,697 MW) in the SPLY.
During Aug’24, the actual power generation was 13.1% lower than the reference generation. This decline in generation is expected to result in higher capacity charges for the 2QFY25 QTA.
https://x.com/ArifHabibLtd/status/1836714300620337340
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Chinese solar panel boom threatens Pakistan’s debt-ridden grid
https://www.ft.com/content/69e4cb33-3615-4424-996d-5aee9d1afe19
Businesses in Pakistan are racing to cover their factory rooftops with ultra-cheap Chinese solar panels, after a surge in electricity prices that has made the state-owned power supply among the most expensive in South Asia. “Every bit of space I have, even if it’s a few feet, I want it covered in solar panels,” said Khawaja Masood Akhtar, chief executive of Forward Sports, whose factory near the Indian border is one of the world’s largest makers of footballs and a rare example of a successful export business. His company had already doubled the level of solar in its energy mix to 50 per cent over the past two years, in response to pressure to go green from Adidas, which contracts Forward to churn out millions of balls each year.
Akhtar is now ploughing a chunk of last year’s profits into importing another haul of panels from China to lift the share of solar supply to his operations to 80 per cent by next April, to blunt the impact of soaring tariffs for state-provided power. “It’s the only way we can beat our competitors” in China and India, he said. “Allah has given us this gift to get out of this mess.” China is also involved on the other side of the “mess”. In order to put an end to widespread electricity shortages a decade ago, the Pakistani government drew in billions of dollars from Chinese and other lenders to its power sector with promises of sovereign-backed, dollar-indexed returns and commitments to pay for even unused electricity. Financing mostly flowed to the coal-fired plants, and power tariffs in Pakistan have more than doubled over the past three years alone, as the cash-strapped government scaled back subsidies and passed the capacity payments made to power producers on to consumers. In response, moneyed Pakistanis have capitalised on the country’s punishingly harsh sunlight by importing some $1.4bn worth of Chinese solar panels in the first half of this year, making it the third-largest national destination in the world, according to data compiled by BloombergNEF. Shimmering blue panels now sit atop a vast array of factories, high-end households, hospitals and mosques.
Irteza Ubaid, chief operating officer of Shams Power, a Lahore-based importer, said that multinational companies in Pakistan, including Coca-Cola, Mondelez and Hyundai, are gobbling up the panels he imports from China, as they chase savings of up to 70 per cent on their electricity bills. The federal government sees the switch to solar as being in the country’s environmental interests, as climate change has brought more extreme weather, including deadly heatwaves and floods, which caused the deaths of more than 1,500 in 2022.
But the mass adoption of solar panels also risked making the power provided by the Pakistani grid “unaffordable”, Awais Leghari, the energy minister, told the Financial Times. “Demand is shrinking off the grid. That’s a big concern for us.” Earlier this year, the ministry complained that “solarisation has grown too fast”, as a result of a policy to buy some excess solar power from households and industry at above-market prices. A remaining estimated 30mn low-income consumers who cannot afford the new solar panels or lack the rooftop space now face rocketing prices for the state-owned power supply.
World Bank approves $1 billion additional financing for Dasu hydropower project
https://www.hydroreview.com/business-finance/finance/world-bank-approves-1-billion-additional-financing-for-dasu-hydropower-project/
The World Bank’s Board of Executive Directors has approved $1 billion in a second round of additional financing for the Dasu Hydropower Stage I (DHP I) Project.
This financing will support the expansion of hydropower supply, improve access to socio-economic services for local communities, and build the Water and Power Development Authority’s (WAPDA) capacity to prepare future hydropower projects, the World Bank said.
“Pakistan’s energy sector suffers from multiple challenges to achieving affordable, reliable, and sustainable energy,” said Najy Benhassine, World Bank country director for Pakistan. “The Dasu Hydropower Project site is one of the best hydropower sites in the world and is a game changer for the Pakistan energy sector. With a very small footprint, the DHP will contribute to ‘greening’ the energy sector and lowering the cost of electricity.”
DHP is a run-of-river project on the Indus River about 8 km from Dasu Town, the capital of the Upper Kohistan District of Khyber Pakhtunkhwa Province. Upon completion, it will have an installed capacity of 4,320 MW to 5,400 MW. The project is being built in stages. DHP-I has a capacity of 2,160 MW and will generate 12,225 GWh/year of low-cost renewable energy. DHP-II will add 9,260 GWh to 11,400 GWh/year from the same dam.
“DHP-I is an essential project in Pakistan’s efforts to reverse its dependence on fossil fuels and reach 60 percent renewable energy by 2031.” said Rikard Liden, task team leader for the project. “The second additional financing will facilitate the expansion of electricity supply and potentially save Pakistan an estimated $1.8 billion annually by replacing imported fuels and offset around 5 million tons of carbon dioxide. The annual economic return of DHP-I is estimated to be around 28 percent.”
The additional financing will further support ongoing socio-economic initiatives in Upper Kohistan, particularly in the areas of education, health, employment and transport. The project will also continue ongoing community development activities on roads, irrigation schemes, schools, medical facilities, mosques, bridges, solar energy systems, and science laboratories and libraries, all with a particular focus on women beneficiaries, including the establishment of free healthcare clinics/camps with women doctors/nurses, training for female health workers, training on livelihoods and literacy for women, and awareness-raising programs on health and hygiene.
Pakistan has been a member of the World Bank since 1950. Since then, the World Bank has provided over $46 billion in assistance. The current portfolio has 55 projects and a total commitment of $14.7 billion, according to a release.
JCM Power wins 240 MW hybrid PV-wind project in Pakistan with $0.031/kWh bid
https://www.pv-magazine.com/2024/09/25/jcm-power-wins-240-mw-hybrid-pv-wind-project-in-pakistan-with-0-031-kwh-bid/
JCM Power has won a 240 MW hybrid wind-solar project in Pakistan with a bid of $0.031/kWh. The facility will be located in Dhabeji, near Karachi, and will supply power to local utility K-Electric.
Canada's JCM Power has said that it will build a 240 MW (AC) hybrid wind-solar project in Dhabeji, near Karachi, Pakistan.
The company secured the project through a procurement exercise held by utility K-Electric. It submitted a bid of PKR 8.9189 ($0.031)/kWh. The tender was held with the supervision of the National Electric Power Regulatory Authority (NEPRA).
JCM Power said it will partner with Pakistan-based Burj Capital and Gharo Solar Limited in the development and construction of the facility.
The project has been described as the largest renewable energy facility to be included in K-Electric's network to date. It will be linked to a 220 kV grid station operated by the private utility.
Pakistan’s cumulative installed solar capacity stood at 1.2 GW at the end of 2023, according to figures from the International Renewable Energy Agency (IRENA).
Pakistan Is Only the Beginning of the Cheap Solar Revolution
By Ryan Cooper, managing editor at The American Prospect, and author of the book "How Are You Going to Pay for That?: Smart Answers to the Dumbest Question in Politics."
No need for expensive imported fuel when your energy is coming from the sun.
https://heatmap.news/economy/pakistan-solar
Pakistan imported a whopping 13 gigawatts of solar panels, mostly from China, in just the first half of 2024, mostly for rooftop installations for homes and businesses. That’s a mind-boggling amount of new solar for a country that only had about 50 gigawatts of installed generation capacity in total in 2023.
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Fuel imports are one of the largest expenses for even prosperous countries. For places like Pakistan, they are a punishing economic drain. Paying for vast amounts of imported coal, gas, and oil in scarce foreign currency is hard enough in good times, but it’s disastrous when one’s currency has depreciated by about 40% over two years.
Dirt cheap solar power could ameliorate or solve many of these problems at a stroke. Panels are now so cheap, even Pakistan can afford to import them by the millions — an expense, yes, but a one-time one. And while solar is inherently intermittent, and therefore not a solution to Pakistan’s reliability problems, batteries are also plummeting in price — down about 90% between 2010 and 2023 — and can help balance out supply. Cheaper batteries also mean cheaper EVs, with (as usual) Chinese models coming out at bewilderingly low prices. And because Pakistanis mostly drive motorcycles (often manufactured domestically) over relatively short distances, electrifying the personal vehicle fleet there will be far cheaper than in America or Europe; vastly smaller batteries require vastly simpler charging infrastructure.
If all goes well, this will free up vast amounts of economic capacity for Pakistan to invest in domestic development. Businesses will have stable, reliable power supplies that will justify more investment. Households will be able to upgrade their insulation, install heat pumps, and generally spend more on things other than energy. The government will be able to upgrade legacy transmission lines to accommodate solar production from the remaining hydro and nuclear plants.
Finally, of course, there is the climate benefit. Pakistan is one of the countries most threatened by climate change. Summer heat waves are bad and getting worse, to the point where murderous wet bulb events are increasingly likely. Catastrophic warming-fueled storms in 2022 caused the worst flooding in the country’s history, inundating about a third of Pakistan’s land area, killing nearly 2,000 people and causing billions of dollars in damages.
In short, a path to economic development will be opened. It is by no means guaranteed, but it will be a heck of a lot easier than trying to dig out from under the debt mountain of the collapsing coal-powered system. Look around the developing world and you’ll find there are a great many nations in similar situations.
Pakistan emerged as second-largest market for Chinese photovoltaic products | REVE News of the wind sector in Spain and in the world
https://www.evwind.es/2024/10/02/pakistan-emerged-as-second-largest-market-for-chinese-photovoltaic-products/101434
Pakistan has emerged as a significant new market for Chinese photovoltaic (PV) companies, aligning with its path toward energy transformation.
According to statistics from the China Photovoltaic Industry Association (CPIA), in the first half of 2024, Asia overtook Europe as the largest export destination for PV products and Pakistan has become the second-largest market for module exports after Europe.
During the same period, China exported inverters worth a total of RMB 1.714 billion to Pakistan. In August alone, the total value of inverter exports to Pakistan reached 326 million yuan, showing a year-on-year surge of 429.04%. And shimmering blue panels now sit atop a vast array of factories, households, hospitals and mosques.
The surge in exports of photovoltaics and supporting products reflects the urgency of turning to new energy power generation in Pakistan, China Economic Net reported on Tuesday.
“Electricity prices continue to rise; thus, people are trying to find their own way out,” Abbas a Pakistani trader said at the Investment and Trade Forum for Cooperation between East and West China.
As of June 2023, the installed capacity of solar power in Pakistan stood at 630 megawatts, namely 1.4% of the overall installed power capacity, which has a huge room for improvement.
In terms of natural conditions, according to the World Bank’s Global Solar Atlas data, taking Balochistan with good lighting conditions as an example, the average annual total photovoltaic output power of a 1KW household photovoltaic system can reach 1990kWh (corresponding to approximately 1990h of sunlight), which is approximately 41% and 59% higher than New Delhi, India and Shandong Province, China, respectively; the Global Tilted Irradiance (GTI) can reach 2536.5KWh/square meter, which is approximately 36% and 61% higher than New Delhi, India and Shandong Province, China respectively.
In terms of policies, for the past few years, the Pakistani government has highly supported the development of renewable energy, setting a strategic goal of increasing the share of renewable energy and alternative energy in Pakistan’s electricity market to 20% by 2025 and to 30% by 2030.
The IGCEP2047 released by NEPRA showed that Pakistan’s PV installed capacity will achieve leapfrog growth in the next few years. It is expected that by 2030, the PV installed capacity will reach 12.8GW, and by 2047 it is expected to reach 26.9GW. According to calculations, in order to achieve the 2030/2047 goals, the average annual new PV installed capacity needs to reach 1.65/1.07GW respectively.
Businesses in Pakistan are racing to cover their factory rooftops with reasonably priced Chinese solar panels. “Every bit of space I have, even if it’s a few feet, I want it covered in solar panels,” said Khawaja Masood Akhtar, chief executive of Forward Sports, whose factory is one of the world’s largest makers of footballs. His company had already doubled the level of solar in its energy mix to 50% over the past two years. Akhtar is now ploughing a chunk of last year’s profits into importing another haul of panels from China to lift the share of solar supply to his operations to 80% by next April.
Pakistan's farmers feel the (solar) power | UNIDO
https://www.unido.org/stories/pakistans-farmers-feel-solar-power
In the photo (above), a smallholder farmer from Bhagwela, Rahim Yar Khan, in Punjab province, inspects her solar tube well, a type of water pumping system that utilizes solar energy to bring up water from underground sources, such as wells or boreholes. It is an eco-friendly and cost-effective alternative to the diesel or mains electricity-powered pumps commonly used in agricultural irrigation.
With the solar-powered tube well irrigating her farmland, the farmer has cut costs and improved her crop yields. She is one of the nearly 500 women and men engaged in farming and running small enterprises in the provinces of Punjab and Sindh who UNIDO has helped apply renewable energy solutions for productive uses. The National Rural Support Programme (NRSP), a leading microfinance and development organization in Pakistan, provides loans for the procurement and installation of renewable energy solutions, and UNIDO covers the interest payments so that the loans are interest-free.
Another farmer, Kaneez Fatima, from the Sargodha district in Punjab, expressed her thanks. "I own a small piece of land, and access to water and electricity is always a problem. I received UNIDO's assistance through the NRSP - an interest-free loan to purchase a 2KW solar panel to run a tube well to irrigate my land. The installation process was extremely smooth, according to the land irrigation needs and water level."
The electricity costs for beneficiaries have drastically dipped. A post-installation impact survey conducted by the NRSP found that 80% of respondents reported savings of of up to 15,000 Pakistani rupees (around €50) a month, with the other 20% saving even more.
Small farmers and entrepreneurs have been suffering from fuel price hikes in recent times. Agriculture and small and medium-sized enterprises (SMEs) are the mainstays of Pakistan's economy, providing jobs for around two-thirds of the population.
Rashid Bajwa, CEO of the NRSP, laments the impact of the enegy crisis on the economy. "The majority of our population generates income that is barely enough to meet their needs and the situation is getting worse," says Bajwa. "We need to adapt and improvise, and alternative or green energy just might be the solution that will enable our SME sector to sustain and grow."
The farms and businesses supported by UNIDO have not only reduced costs by switching from diesel, they are also helping save the climate. With a capacity to produce 1,825 MWh of clean energy a year, the project beneficiaries will be able to avoid more than 800 metric tons of CO2 emissions annually.
Shah Jahan Mirza, Managing Director of the government agency, the Private Power and Infrastructure Board, commended UNIDO for introducing renewable energy technogology to smallholder farmers and small enterprises in Punjab and Sindh provinces. "These rural communities generally don't have funding to finance these systems. There are also doubts and misconceptions about these technologies, i.e. they are not reliable and very costly, or may not help. Providing interest-free loans is a breakthrough. UNIDO has taken a lead in this which will go a long way, as the people have now started using this technology. "
The UNIDO initiative is part of a bigger project, Sustainable Energy Initiative for Industries in Pakistan, funded by the Global Environment Facility (GEF). Collaborating with public and private partners, UNIDO has facilitated investments in energy efficiency and renewable energy in 50 industrial units. In addition, UNIDO has placed significant emphasis on capacity building, and has trained more than 625 professionals, including 30 women, in energy management systems and energy optimization.
The project has yielded significant results, implementing more than 12MW of renewable energy projects in the industrial sector, and thereby reducing over 17,000 metric tons of CO2 emissions.
Pakistan ends power deals to save $1.48 billion, cut tariffs | Reuters
https://www.reuters.com/business/energy/pakistans-biggest-private-utility-says-govt-power-deal-ends-prematurely-2024-10-10/
Government to save 411 billion rupees
Negotiations with more power producers underway
IMF bailout talks influenced decision to revisit power deals
KARACHI, Oct 10 (Reuters) - Pakistan's government has ended power purchase contracts with five private companies, including one with the country's largest utility that should have been in place until 2027, to cut costs, officials said on Thursday.
The news confirms comment from Power Minister Awais Leghari to Reuters last month that the government was re-negotiating deals with independent power producers to lower electricity tariffs as households and businesses struggle to manage soaring energy costs.
"We studied these agreements and we decided what plants we need and what plants we don't need," Leghari told a news conference in Islamabad on Thursday, adding the termination of the take or pay agreements will save the nation nearly 411 billion rupees ($1.48 billion) in the coming years.
Take or pay is referred to as capacity payments in Pakistan where the government has to pay private companies irrespective of how much of the power they generate is transferred to its grid.
Negotiations have also begun with other power producers to revise their contracts, Leghari said, adding people would soon see the impact in their monthly bills.
"Our aim is to bring the tariff down," he said.
The need to revisit the deals was an issue in talks for a critical staff-level pact in July with the International Monetary Fund (IMF) for a $7-billion bailout.
Earlier on Thursday Prime Minister Shehbaz Sharif said Pakistan has agreed with five independent power producers to revisit purchase contracts. He said that would save the country 60 billion rupees a year.
Pakistan's biggest private utility, Hub Power Company Ltd (HPWR.PSX), opens new tab, also said the company agreed to prematurely end a contract with the government to buy power from a southwestern generation project.
In a note to the Pakistan Stock Exchange, it said the government had agreed to meet its commitments up to Oct. 1, instead of an initial date of March 2027, in an action taken "in the greater national interest".
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