This is a best prospect industry for this country. Includes a market overview and trade data.
Pakistan is overcoming a severe energy crisis that had directly and indirectly affected all sectors of the economy in the past. Pakistan generates its power from an energy mix that includes oil, gas (natural gas and liquefied natural gas, LNG), coal, renewable sources (solar, wind and hydro energy), nuclear, and biomass. According to National Electric Power Regulatory Authority’s (NEPRA) 2020 yearly report, Pakistan’s total installed power generation capacity at 38700 MW, of which 57 percent of energy comes from thermal (fossil fuels), 31 percent from hydro, 4 percent from renewable (wind, solar and bagasse) and 8 percent from nuclear. Country’s electrical load pattern varies from season to season. Overall electricity consumption in the country was affected by the global pandemic as compared to FY19 as power consumption was reduced due to negative economic growth in country. Going through long power outages in the past, Pakistan has significantly increased its power generation capacity enough to meet country’s total demand.
In the current scenario where country is more dependent on importing the energy, renewable energy (RE) resources can play an important role. With current government’s tilt towards renewable energy, Government has developed a long term Alternate Renewable Energy (ARE) policy 2019. ARE 2019 policy outlines a comprehensive framework not only for the renewable energy generation but also encourages utilization of renewable technologies in country. The policy reportedly seeks to have 20-30 percent of all energy derived from renewable energy sources by 2030 and envisages development of large-scale renewable energy projects in Pakistan. Over the last five years, 19 wind power projects of 980MW, 06 solar power projects of 418MW and 08 bagasse projects of total 258 MW achieved commercial operations and are providing electricity to the grid.
Pakistan has considerable potential for using wind energy in the coastal belt of Sindh and Baluchistan (in southern Pakistan). The Government of Pakistan (GOP) has developed a wind power energy corridor along the southern coastal regions of Sindh and Baluchistan. Wind data, provided by Pakistan’s Meteorological Department, measures Pakistan’s coastal belt at 60km (Gharo-Keti Bandar) and 180km long, with an exploitable potential of 50,000MW of electricity generation through wind turbines. Currently there are 24 private wind projects operating, producing approximately 1235MW. In addition to this, 12 wind projects with cumulative capacity of 610 MW have achieved financial close and are under construction. However, GOP has curtailed electricity off-take from few existing wind plants as energy purchase agreements with these developers have become expensive due to impact of corona pandemic on economy, higher tariff, grid instability and currency devaluation which may impact completion of new projects. Yet, these wind projects, existing and upcoming, offer potential for U.S. companies particularly for turbine manufacturers.
In addition to large hydro, there are certain prospects of development of small-mini-micro hydro power. GOP considers small hydropower projects as clean and inexpensive source of energy. Small hydropower projects are mainly located in the remote areas of Pakistan particularly North of country. Primarily, these projects are awarded and approved by provincial governments to developers. At present 128 MW of small hydro projects are operational, whereas projects of 877 MW are under implementation.
Pakistan has an average of nine and a half hours of sunlight daily. Opportunities are unlimited in this sector but there are challenges. The biggest challenge to an on-grid solution is the unsolidified renewable energy policy and its implementation through an autonomous energy authority. An unpredictable Feed-in-Tariff and challenges to getting a Letter of Intent (LOI) dampens enthusiasm for investment in this sector. However, scalable, and off-grid solutions have huge potential. There have been some efforts to install and expand the use of solar energy at the national level. Quaid-e-Azam Solar Park – a photovoltaic power station - was established in 2016 with a designed capacity to generate 1000 MW. However, this project is currently producing only 400 MW with plans to enhance its generation capacity. In sum, Alternate Energy Development Board (AEDB) is pursuing 22 solar projects with cumulative capacity of 890 MW. Of these, 6 solar projects are operational and generating more than 400 MW of solar power. The remaining projects are at different stages of development.
To expand renewable energy in Pakistan’s energy mix, the World Bank has provided $100 million of financing to Sind Solar Energy Project to support independent power producers develop 400 MW of new solar power projects and provide partial grants to private sector firms for the commercial provision of Solar Home Systems to 200,000 households.
With the rising costs of electricity in Pakistan and an unreliable grid supply, more industries and commercial organizations are turning to captive solar solutions. There has been a strong surge in domestic installation of rooftop photovoltaic panels in larger cities. For projects under 1 MW, net metering regulations came into effect in September 2015. This sector is trending toward significant growth soon as the GOP is targeting at least 1 million customers and adding approximately 3000 MW of solar power through net metering.
The most promising opportunities within this sector are:
- Solar Panels / Photovoltaic Panels
- Dry Batteries
- Wind Farm Equipment (especially turbines)
- Biomass Boilers
- Transmission Equipment
- Distribution Equipment
- Biogas Equipment
- Technical Consultancy