Framework Guidelines Approved For Solar Initiatives 2022 To Promote Local RE Sources

The incumbent government has approved the framework guidelines for fast-track Solar Initiatives 2022 to promote and develop cost-effective local renewable energy (RE) sources, reducing the impact of high prices of imported fossil fuels in the global markets, resulting in high electricity tariffs and drainage of precious foreign exchange

ISLAMABAD, (UrduPoint / Pakistan Point News - 8th Jun, 2023 ):The incumbent government has approved the framework guidelines for fast-track Solar Initiatives 2022 to promote and develop cost-effective local renewable energy (RE) sources, reducing the impact of high prices of imported fossil fuels in the global markets, resulting in high electricity tariffs and drainage of precious foreign exchange.

According to Economy Survey for the year 2022-23 unveiled by Finance Minister Mohammad Ishaq Dar, the Federal Cabinet in its meeting held on 18th October 2022, approved the Framework Guidelines for Fast Track Solar Initiatives 2022.

The framework covers Solar PV Energy substitution for expensive imported fossil fuels, Solar PV generation on 11 kV Feeders, and public buildings solarization.

The government aims to achieve a 60 per cent share of electricity generation capacity through indigenous clean energy technologies (ARE and hydro) by 2030, based on the Indicative Generation Capacity Expansion Plan (IGCEP).

This framework is based on key pillars including the substitution of expensive imported fossil fuels with Solar PV Energy, Solar PV-based power generation capacity to substitute expensive imported fossil fuels used for power generation that will lower the average basket cost of generation for the system.

The government also plans to add approximately 6,000 MW of solar PV capacity under this initiative.

Solar PV Generation on 11 kV Feeders Decentralized, medium-scale Solar PV power can contribute cost-efficiency to alleviate some of these problems by feeding directly into the medium-voltage (MV) network, thereby improving the local losses, power outages, and voltage situation.

Furthermore, the injection of Solar PV power into the MV network would provide cheap electricity to the national grid without any augmentation or significant upgrade of the grid infrastructure.

Accordingly, solar PV projects of suitable capacity up to a maximum of 4 MW will be procured through competitive bidding at an 11 kV feeder level.

Solarization of Public Buildings Solarization of public buildings will help meet a specific portion of the electricity load through clean energy technology, reduce electricity bills of public offices, and relieve electricity utilities/distribution companies from long-term dues.

Under this initiative, building-specific Solar PV net-metering-based systems will be installed through bidding on Lease (10-year BOOT basis) and the Own-cost models.

AEDB has been tasked to carry out the solarization of public buildings through competitive bidding on behalf of public sector entities.

The base case of NTDC's plan IGCEP 2022, currently pending approval by NEPRA, estimates the country's demand at 41,338 MW and installed capacity at 69,372 MW by 2031.

It also adds 13,278 MW of solar (8,350 MW) and wind (4,928 MW) capacity by 2031, increasing their power mix shares to 20 per cent and 10 per cent, respectively. AEDB prepared the Request for Proposal (RFP) packages for competitive bidding for wind and solar projects and made NEPRA-required amendments. NEPRA will determine the benchmark tariff for competitive bidding.

The draft of IGCEP 2022, prepared by the National Transmission and Despatch Company (NTDC) and currently under approval with the National Electric Power Regulatory Authority (NEPRA), projects the country's demand at 41,338 MW and an installed capacity of 69,372 MW by 2031 as the base case.

Nuclear power plants (NPPs) are a reliable source of electricity, as they can run for up to 18 months without refuelling and store enough fuel for another 18 months on site.

The nuclear fleet, comprising six NPPs with a total capacity of 3,530 MW, contributed about 27 per cent of the total electricity generation in the national grid in December 2022.

In 2016, the government imposed a moratorium on new imported fuel-based power projects. Moreover, the government plans to convert all commissioned imported coal independent power producers (IPPs) to Thar coal.

As such, Thar has the country's largest coal reserves, which have been actively developed in recent years.

With the addition of three power projects during the current fiscal year, the total installed capacity from five Thar coal-based power generation plants has reached 3,300 MW.

According to the Economic Survey, the country's total installed electricity capacity stands at 41,000 MW and the percentage share of hydel, thermal, nuclear, and renewable is 25.

8 per cent, 58.8 per cent, 8.6 per cent, and 6.8 per cent, respectively. The share of thermal as a dominant source of electricity supply has declined over the past few years, showing the increased reliance on indigenous sources.

On the other hand, against total electricity generation of 94,121 GWh, the share of hydel, nuclear, and renewable is combined as 53.8 per cent, which is a good sign for the economy and the environment.

The Private Power Infrastructure Board (PPIB) so far has successfully managed to develop 45 Independent Power Producers (IPPs) of about 20,911 MW, more than half of the country's installed capacity, attracting over US$ 25 billion foreign direct investment (FDI).

These initiatives boost economic development, employment, and livelihoods by generating much-needed electricity.

PPIB also facilitated the country's massive transmission line project (LahoreMatiari), the first HVDC Transmission line project created by the private sector.

This project, worth US$ 1.65 billion of FDI, shows PPIB's crucial role in private sector resource mobilization for power transmission infrastructure projects.

PPIB also promoted indigenous Thar-coal and hydel resources to generate cheaper electricity and accelerates hydel and Thar coal-based power generation projects. PPIB is processing 16 power generation projects of over 8,300 MW, 13 hydroelectric projects of 5,455 MW, 1 Thar coal-based project of 1,320 MW, 1 RLNG-based project of 1,263 MW, and an imported coal-based project of 300 MW.

The total installed capacity from 5 Thar coal-based power production plants is 3,300 MW after 3 projects reached Commercial Operations Date (COD) during FY2023.

Thar Energy Limited (330 MW), ThalNova Power Thar Private Limited (330 MW), and Shanghai Electric (1320 MW) reached COD on 1st October 2022, 17th February 2023, and 5th February 2023, respectively.

The US$ 2,908 million investment will supply 13 billion electricity units and save Rs 360 billion annually.

In addition, 660 MW Engro and 660 MW Lucky Thar coal-based projects were also commissioned by PPIB.

The US$ 1,707.7 million 884 MW Suki Kinari project on river Kunhar in Mansehra is being developed under CPEC with a debt-to-equity ratio of 75:25. About 88.5 per cent of construction work has already been completed.

700 MW Azad Pattan hydropower is a run-of-river project on river Jehlum at the border of AJK (District Bagh) and Punjab (District Rawalpindi).

PPIB is implementing it with an investment of US$ 1,350 million in the CPEC framework and these projects is likely to be completed by December 2024. Another energy project under CPEC is the 1,124 MW Kohala Hydropower project.

It is the country's largest private investment in an IPP. The US$ 2,355 million worth of project will be developed on river Jhelum, which flows into AJK in the northeast.

However, an early land acquisition resolution is needed to reach a financial close by September 2024.

The government is also planning to convert all commissioned imported coal IPPs to Thar coal. A feasibility study was conducted under the direction of the Ministry of Energy (Power Division), which suggested starting on-site testing of 10 per cent Thar coal blending with the imported coal.

Accordingly, efforts have been started to blend Thar coal with imported coal for Sahiwal, Port Qasim, and Hub coal projects, having a total capacity of 3,960 MW.

The government has also planned to merge AEDB into PPIB to extend one window by PPIB for all technologies.

The government encourages consumers to utilize renewable energy technologies in household, commercial, and industrial sectors in addition to large-scale RE projects.

Under the NEPRA (Alternative and Renewable Energy) Distributed Generation and Net Metering Regulations, 2015, AEDB promotes renewable energy-based net-metering. Under AEDB (Certification) Regulations, 2018, AEDB certifies solar system service providers, vendors, and installers to help consumers and DISCOs and ensure quality.

However, the government's Ease of Doing Business vision simplified the restrictions in August 2021. As such, in July�March FY2023, 145 new installers received certifications, bringing the total number of active AEDB-certified installers to 307.

Furthermore, net metering-based systems of 355.3 MW total capacity were installed by different consumer segments during the same period, while 50,656 installations totaled 863.4 MW as of March 2023.