Acknowledging that the neglect of the energy and water sector is responsible for the current crisis-like situation in the country, Sindh Information Technology Minister Raza Haroon has said that the energy system of the country is “inefficient and incapable of meeting the present and future energy requirements and, therefore, there is a need to tap alternative energy resources”.
The minister said this while inaugurating an international conference on power and energy in connection with Earth Day on Saturday.
Federal Water and Power Minister Raja Pervez Ashraf who was supposed to attend the conference did not turn up at the meeting.
Addressing the “4th Power and Alternative Energy Asia International Conference”, Sindh IT Minister Raza Haroon said that the country’s energy needs were expected to double in the next 20 years while the current dependence on fossil fuel resources could not meet this increased demand in any sustainable manner in the future.
He said that Pakistan ignored its energy sector and the country paid about $12 billion for its energy imports in 2008, which was 63 per cent of the total export earnings. In 2009, our oil import bill increased to $13 billion, he said.
“However, Pakistan continues to experience energy shortage which is causing economic losses which exceeded $6 billion in 2008 alone, which also exceeds the financial package of the International Monetary Fund to Pakistan,” he said.“And yet,” the minister added, “today, only 63 per cent of our people have grid connected electricity, and 80 per cent of the population is without piped natural gas — and this is forcing these deprived rural poor people to use inefficient, low quality and expensive fuels.”
“The poor in Pakistan are paying three to five times more for their energy supplies as compared to those of us living in the urban areas,” he said.
He said that in the hydro-power sector Pakistan has a potential of over 50,000 megawatts. However, only less that 15 per cent of it had been tapped to date, he said.
The minister said that the Alternative Energy Development Board (AEDB) was helping provinces in this sector and already eight projects totalling 110MW were under implementation in the private sector and many more were in early stages of preparation in the private sector.
He also lauded the AEDB for working with the Aga Khan Rural Support Programme (AKRSP) to install 103 micro-hydro-power projects in Chitral and Gilgit-Baltistan of which some 60 projects had already got completed in the past year.
He said that 63 additional feasibility reports were under preparation which could be provided to the private sector so that they could consider them for investment in these projects.
He expressed satisfaction over the financial closure of four plants of 50MW each which would add 200MW to the national grid till 2011 from the Gharo-Keti Bunder wind corridor alone by using the wind power.
Speaking on the occasion, the chief executive officer of the Alternative Energy Development Board (AEDB), Arif Allauddin, while referring to various initiatives, said that the mandate of the Alternative Energy Policy had been expanded in consultation with all stakeholders and it would be released in a few weeks.
“The government has also agreed to offer preferential rates of return to all alternate energy investments — and the new rate is expected to be 17 per cent Return on Equity (ROE),” he said.
“Further, the National Electric Power Regulatory Authority (Nepra) is expected to announce incentive of up to 1 per cent ROE on the projects that come early,” he said.
The government had accepted the proposal of creating a renewable energy development fund for the promotion of the alternate energy in the country, which could invest and be a partner with the private sector, he said.
“Special proposals for the 2010 budget, proposing subsidies, fiscal and financial incentives for off-grid products are also under active consideration,” he said.
He said that that AEDB had negotiated special grant assistance from donors for the mapping of energy resources and for the development of projects in Balochistan and Sindh.
“Similar assistance is already in place for the NWFP and Punjab and once the projects are developed the AEDB will utilise the Renewable Energy Development Sector Investment Programme (REDSIP) funding available to it for financing the viable projects.”
The meeting was told that by the end of this year at least 15 per cent of the parts of wind turbine will be manufactured locally for which memorandums of understanding (MoUs) has been signed with foreign companies. Mr Allauddin also highlighted the potential of solar energy in the country.
British Deputy High Commissioner Robert Gibson appreciated the government of Pakistan on putting greater emphasis on renewable energy and spelt out the UK’s experience in the alternative sources of energy.
He informed the attendees that London set an ambitious target of 10 per cent renewable energy or 2700MW in the country’s energy mix by the year 2015.