Pakistan’s energy mix heavily relies on non-renewable fossil fuels. About 64% of Pakistan’s electricity comes from non-renewable sources and 36% from renewable energy sources such as solar, hydropower, nuclear power and wind.
History of dependence on non-renewable energy sources
This dependence on non-renewable energy sources for power generation has depleting Pakistan’s limited indigenous oil and gas resources, forcing the country to import oil, gas, and coal at a significant cost. This reliance on imports has also negatively impacted Pakistan’s economy, putting it under pressure and contributing significantly to climate change.
Pakistan meets approximately 85% of its oil demand through imports. According to the Pakistan Economic Survey of 2021-2022, the oil import bill increased by 95.9 percent to US$17.03 billion during July-April FY2022. Natural gas is also an essential component of Pakistan’s energy mix, with a share of approximately 30% in the primary energy mix. Due to limited gas reserves and depletion of local gas reserves, Pakistan imports heavily liquidated natural gas (LNG). In 2020, Pakistan imported 7.4 million tons of LNG; in 2021, nearly US$2.6 billion worth of LNG was imported. The Institute for Energy Economics and Financial Analysis (IEEFA) estimates that Pakistan’s LNG imports could rise to over US$32 billion by FY2030.
Coal is another crucial energy source in Pakistan, with significant potential (185 billion tons) in the country, making Pakistan the world’s 28th largest coal reserve holder. Dr. Mubarakmand, a Pakistani nuclear scientist, claimed that the Thar Coal Power project could generate 500,000 MW of electricity annually for 500 years. Still, such a prediction is currently looking for reality because the inferior quality of domestic coal in Pakistan generates a small amount of electricity from the Thar coal power project, forcing Pakistan to rely on imported coal for power generation. Cement companies in Pakistan import around 8.0 million tons of coal annually, while power plants, including Sahiwal Power Plant and Port Qasim Power Plants, import 12 million tons. This means that Pakistan imports 20 million tons of coal annually, and it is estimated that Pakistan’s coal imports will surge to 30 million tons per annum from the existing 20 million tons/annum.
Currently, Pakistan generates 5280 MW of electricity from coal, with 75% (3,960 MW) generated from imported coal and only 1,320 MW from Thar coal. This means that Pakistan relies heavily on imported coal for electricity generation, which not only presses the country’s economy but could lead to an energy crisis. Pakistan’s energy demand is increasing by more than 9% annually, and it is projected to increase eightfold by 2030 and twentyfold by 2050.
Why Pakistan Needs More Renewables energy
Due to the heavy and expensive import of fossil fuels, depletion of domestic fossil fuel resources, increasing energy demand, and the adverse consequences of fossil fuels on the environment, Pakistan must prioritize reducing the share of fossil fuels in electricity generation and increasing the share of renewable energy sources specifically solar energy.
Renewable energy, particularly solar energy, proliferates worldwide and presents a sustainable solution to the energy demand and supply gap. It is the cheapest form of renewable energy today. Moreover, with increasing climate change-related disasters occurring worldwide, every country has started focusing on climate change in its own way. Many countries have set goals for reducing the share of fossil fuels in their energy mix for generating electricity. For example, Morocco plans to increase the renewables in its electricity mix to 52% by 2030, Germany with targets of 80% by 2030, the world’s largest carbon emitter. China can also be a leader in renewable energy and plans to generate one-third of its energy from renewable sources by 2025.
Through the “Alternative & Renewable Energy Policy 2019,” Pakistan aims to produce 60% of its energy through renewable resources by 2030. Still, it seems that it will be just a dream, considering our pace.
Pakistan’s strategic position provides year-round exposure to sunlight, which means great potential for solar energy as a resource for clean power generation. Pakistan has enormous potential for renewable energy, including 2,900,000MW for solar, 346,000MW for wind, 3000MW for biogas, 2000MW for small hydropower, and 1000MW for waste-to-energy. However, Pakistan’s solar power currently plays a negligible role in the country’s power generation mix, accounting for only 1.7% of the total energy mix and heavy reliance on non-renewable sources for the energy mix specifically for power generation.
One way for Pakistan to tap into this potential is by planning mega solar power projects, which involve building large solar power plants that generate electricity on a large scale. However, such projects require significant investment and resources, which may not be feasible for Pakistan’s current economic situation.
Another viable approach for Pakistan to harness its solar potential is by promoting the installation of rooftop solar PV at the household level. This method, which involves installing solar panels on the rooftops of homes, is not only efficient but also cost-effective. It presents a feasible solution that does not require significant investments, providing reassurance about the practicality of transitioning to renewable energy. Pakistan currently has Solar PV Power Projects with a cumulative capacity of 600 MW, and the peak electricity demand stands at nearly 31,000 MW so according to some rough estimates setting up 52 solar power plants capacity of 600 MW in Pakistan can meet the country’s electricity demands solely by using solar energy, according to the World Bank, utilizing just 0.0071 percent of the country area for solar PV power generation would meet Pakistan’s current electricity demand.
However, practical problems may arise while implementing such a plan to set up massive solar power plants. The most significant problem is the cost of setting up 52 solar power plants of 600 MW. Pakistan needs substantial funds for this, which we currently don’t have. We must find a solution to this financial challenge. The second problem is maintenance. Who will maintain these huge solar panels? They require regular cleaning, which is a challenging task for humans. The need for thousands of cleaning robots will add to the cost. Additionally, the limited lifecycle of solar panels is another issue. At such a large scale, solar panels will not continue producing electricity indefinitely. Studies show that they have a lifespan of about 30 years, meaning that you can only harness energy from these solar panels for 30 years before they need to be replaced.
Therefore, one solution to efficiently utilize solar energy without setting up large solar power plants is to set up small solar panel plants at the household level. In such an initiative, the government should subsidize and encourage users to install rooftop solar panels, as there is no cheaper alternative to rooftop solar electricity today.
Household-level solar systems are of two types: on-grid and off-grid. In an on-grid solar system, you install a solar panel at your home and connect it to the local grid. Here, you get the net metering facility, where surplus energy from solar panels is sent to the grid. When solar panels do not produce electricity at night, you can use electricity from the grid. If your solar panels produce more surplus electricity, you will get paid for the electricity you transmit to the grid.
The second option is an off-grid system, which means you do not connect your solar system to the grid. Instead, you connect it to a battery, where you fulfill your electricity requirements at night. However, the problem with this option is that the cost of batteries is often very high, and you also don’t get a net metering facility if your solar produces surplus electricity.
Researchers emphasize that Households are essential for solar PV adoption because it is a significant electricity consumption sector in Pakistan; the share of households in electricity consumption was 47% percent in FY2022. A solar system at the household level can also help a very large part of the rural population that does not have electrification facilities because they are either too remote or too expensive to connect to the national grid. Providing them with solar panels at subsidized prices will help them have access to electricity.
Energy experts recommend on-grid solar systems as a more beneficial option. However, in the case of Pakistan, there are challenges such as transmission, grid up-gradation, and net metering. One significant issue is the slow on-grid registration process, which is causing problems for many individuals. It is crucial for the government to expedite this process, making it less troublesome for individuals to own and sell renewable energy. This will also facilitate the connection of small-scale renewable energy systems to the grid, thereby promoting solar PV adoption.
Positive Initiatives for Solar Energy Utilization in Pakistan
Some initiatives in utilizing renewable energy, specifically solar power, in Pakistan have positive signs, such as
Policy for Development of Renewable Energy for Power Generation 2006
The Policy for Development of Renewable Energy for Power Generation 2006 aimed to promote the development of renewable energy technologies and achieve a renewable energy mix of 5% by 2015 and 10% by 2025. In terms of solar energy, Policy for Development of Renewable Energy for Power Generation 2006 states that Pakistan enjoys abundant solar irradiation, particularly in regions like Balochistan, Sindh, and southern Punjab, where the annual sunshine duration exceeds 3,000 hours, and solar irradiation levels reach over 2 MWh/m2. This high solar potential makes the country suitable for photovoltaic (PV) and solar thermal power generation. However, the 2006 policy does not explicitly address solar energy because the Policy for Development of Renewable Energy for Power Generation 2006 focuses more on exploring and developing Pakistan’s hydroelectric renewable energy potential.
Net Metering Policy of 2015
The 2015 policy of Net Metering, the National Electric Power Regulatory Authority (NEPRA), in 2015 allows consumers to install solar panels on their rooftops and connect them to the grid. The excess electricity generated by the solar panels must be transmitted to the grid, and the consumers will be credited for this surplus electricity. This scheme has been implemented by the Alternative Energy Development Board (AEDB) and the National Electric Power Regulatory Authority (NEPRA) in collaboration with the power distribution companies. Still, the problem with that is power distribution companies are not paying back the price of surplus power that the consumer supplies to the grid.
State Bank of Pakistan’s Solar Financing Scheme
The State Bank of Pakistan (SBP) initiative finances renewable energy projects in the country. The scheme encourages individuals and organizations from the industrial, commercial, residential, and agricultural sectors to invest in renewable energy sources, specifically solar power. Those who invest in renewable energy projects will get loans under the SBP Solar Financing Scheme.
Alternative & Renewable Energy Policy 2019
The Alternative & Renewable Energy Policy 2019’s objective is to recognize Pakistan’s vast renewable energy potential, promote renewable energy sources, and reduce the country’s dependence on fossil fuels. This particular Policy not only recognizes the country’s vast renewable energy potential but also sets specific targets to promote its utilization. These targets include achieving at least a 20% renewable energy generation capacity by 2025 and reaching a minimum of 30% renewable energy generation capacity by 2030.
Apart from that, projects such as the Sindh Solar Energy Project (SSEP), a $40 million 400MW solar park at Manjhand town in Jamshoro district, a $25 million project to install rooftop solar systems with a 20MW capacity on public sector buildings in Karachi and Hyderabad, and the $30 million project to provide 200,000 rural households access to affordable solar home systems.
The initiatives and projects mentioned above are a positive move towards utilizing solar energy, contributing to a cleaner and more sustainable energy future, and reducing our dependence on fossil fuels, which results in heavy import bills and climate disasters.