Pakistan’s solar energy market size set to increase from 1.3 GW in 2023 to 9.77 GW by 2028
To promote and develop cost-effective local renewable energy sources, Pakistan has approved the framework guidelines for fast-track solar initiatives in 2022. It is expected to reduce local price volatility because of less reliance on the worldwide market and ease the foreign exchange requirements. It is said that this framework covers three main aspects such as solar PV energy substitution for expensive imported fossil fuels, solar PV generation on 11 kV feeders, and public buildings solarisation.
To attain a 60 per cent energy generation, share of indigenous clean energy technologies, IGCEP is prepared, whereas AEDB and PPIB in the right direction are facilitating the execution of power projects. Statistics from the International Renewable Energy Agency (IRENA) explained that the Pakistan solar energy market size is expected to increase from 1.3 GW in 2023 to 9.77 GW by 2028, at a CAGR of 49.68 per cent during the forecast period (2023-2028).
The solar power installations presently have seen remarkable growth, with an installed capacity of over 2,368MW as of FY22, reflecting the growing popularity and potential of solar energy.
The Government of Pakistan can attract foreign investment in the manufacturing of solar panels and allied equipment at the local level provided it formulates strategies that deliver legal safeguards to financiers and guarantee a consistent regulatory framework.
Sources said that Pakistan’s partnership with China in developing the solar power sector holds immense potential for both of the countries. To retain and expand Chinese investment in solar panels and allied equipment manufacturing, the Government of Pakistan must prioritise the creation of a timely and enabling environment. China would support Pakistan by the provision of 5,000 sets of solar home systems and would offer capacity-building programmes for Pakistani officials.
The previous government of Pakistan announced the National Solar Energy Initiative in September 2022, registering that the programme would assist in generating 10,000MW solar power and substitute costly energy with cheap solar power, which will offer massive relief to people and save precious foreign exchange.
Sources also recorded that the solar initiative aims to start off by switching government buildings and tube wells from diesel to solar power, while power plants operating on diesel, coal and furnace oil will also be partially replaced.
Statistics showed that Pakistan’s current energy mix is about 58 per cent fossil fuels, 30 per cent hydropower and 10 per cent renewables and nuclear power. By 2030, the Government of Pakistan has vowed to produce 60 per cent of its energy from renewable sources. Pakistan’s total nuclear energy production capacity grew to 1,400MW when Pakistan’s 6th nuclear power plant opened 2-year ago. Located in the southern port city of Karachi, the 1,100MW plant was also constructed with Chinese assistance. It is also important to mention here under the drive of the Sindh government to promote the usage of clean energy sources, solar systems have been installed at 233 basic health units and 73 public sector hospitals. The solar panels similarly, will be installed at 40 large public sector buildings in the province including the Sindh Assembly and government offices etc.
To organise manufacturing units for indigenous production of solar panels to save precious foreign exchange otherwise spent on importing renewable energy equipment, the Sindh government would completely support any plan. In Pakistan no doubt, the solar power option has massive potential to generate an abundance of clean electricity at the cheapest rates for the concerned power consumers. The solar energy resources despite being one of the cheapest power production sources in Pakistan had the least contribution to the national energy mix.
Benefits of solar PV energy
According to the government of Pakistan’s officials under the initiative, Solar PV-based power generation capacity shall be solicited to substitute expensive imported fossil fuels used for power generation that will lower the average basket cost of generation for the system.
The Government of Pakistan plans to add about 6,000MW of solar PV capacity under this initiative. In the first phase, for a solar PV project of 600MW capacity at Kot Addu, District Muzaffargarh, NEPRA approved the RFP and Security Package Documents (SPDs). The benchmark tariff is also determined for the competitive bidding of this project. Decentralised, medium-scale solar PV power can contribute cost-efficiency to alleviate some of these issues by feeding directly into the medium-voltage (MV) network, thereby enhancing the local losses, power outages, and voltage conditions. Furthermore, the injection of solar PV power into the MV network would offer 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 4MW will be procured by competitive bidding at an 11 kV feeder level. The Standard RFP and EPA are already prepared for developing small solar projects of up to 4MW capacity at the feeder level in Pakistan.
Solarisation of public buildings
Solarisation of public buildings will assist meet a specific portion of the electricity load by 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 the lease (10-year BOOT basis) and the own-cost models. AEDB has been tasked to carry out the solarisation of public buildings through competitive bidding on behalf of public sector entities.