Green energy: NEECA prepares ‘concept note’ to seek assistance

ISLAMABAD: The National Energy Efficient and Conservation Authority (NEECA) has prepared a concept note to seek technical assistance from International Development Partners on development of Green Hydrogen Policy and Framework for Pakistan as the United Nations Industrial Development Organisation (UNIDO) has shown willingness to extend $14 million funding for clean hydrogen, official sources told Business Recorder.

NEECA with the Technical Assistant of the Asian Development Bank (ADB) has already completed the “pre-feasibility study on Pakistan Green Hydrogen Energy” which was launched on January 18, 2024. At a recent meeting of the Working Group of the SIFC NEECA was directed to submit a Concept Note to Economic Affairs Division (EAD) for exploring technical assistance on development of Green Hydrogen Policy and Framework.

The forum was apprised that the Government of Punjab has already received investor interest of around $ 4.3 billion in the Green Hydrogen projects where a production cost of $ 1.2/kg is being offered which is highly competitive and promising in global terms. It was noted that existing power plants have long-term Power Purchase Agreements (PPAs) making it difficult to provide electricity to produce Green Hydrogen, hence, projects with an inbuilt offer of Renewable Energy (RE) infrastructure shall be prioritized.

NEECA again transferred to Power Division

Pakistan’s current primary energy mix is dominant with approximately fossil fuels (85%), mostly based on imported fossil fuel including RLNG, coal and RFO. Due to Pakistan’s reliance on imported fuel and very high energy prices at global level, it has become difficult for Pakistan to manage reliable and cost effective energy supply. This dependency on fossil fuels also results in the higher GHG emissions. The cost-effective solution to this problem is to harness the maximum potential of indigenous RE resources in the country. Hydrogen due to its high energy content environmental compatibility, storage and distribution and its ability to address intermittency of RE sources, is an essential energy sector to ensure the reliable and cost effective harnessing of the RE resources of Pakistan.

Pakistan, like many other countries, faces numerous challenges in transitioning to a sustainable energy paradigm. With a growing population and increasing energy demand coupled with environmental concerns and the imperative to reduce carbon emissions, Pakistan stands to benefit greatly from harnessing the potential of Green Hydrogen. However, the country lacks a comprehensive Policy and Regulatory Framework to facilitate the development, deployment and utilization of Green Hydrogen Technologies.

The primary objective of this initiative is to collaborate with International Development Partners to develop a comprehensive Green Hydrogen Policy and Framework. The key objectives include the following: (i) conducting a comprehensive assessment of RE potential of Pakistan particularly in terms of solar and wind resources suitable for green hydrogen production; (ii) analyzing the current policy landscape and Regulatory Framework related to RE and Hydrogen in Pakistan identifying gaps, challenges, and opportunities for integration of Green Hydrogen; (iii) engaging relevant stakeholders including Government Agencies, private sector entities, research institutions and civil society organizations to ensure inclusive and participatory policy development; (iv) formulating policy recommendations and guidelines for promoting investment , research and development infrastructure development and market mechanisms to accelerate the adoption of Green Hydrogen Technologies; (v) building institutional capacity and expertise within government agencies responsible for energy planning, regulation, and implementation to effectively implement and monitor the Green Hydrogen Policy and Framework.

The sources said, Pakistan aims to achieve the following from Technical Assistant of International Development Partners; (i) establishment of a clear policy and Regulatory Framework conducive to the development of Green Hydrogen as a key component of Energy Transition Strategy of Pakistan; (ii) increased awareness and understanding of Green Hydrogen Technologies, benefits, and opportunities among stakeholders across various sectors; (iii) mobilization of investment and resources for the deployment of Green Hydrogen projects, contributing to economic growth, job creation, and environmental sustainability; (iv) strengthened institutional capacity and coordination mechanisms for effective governance, implementation and monitoring of Green Hydrogen initiatives in Pakistan; and (v) enhanced international cooperation and partnerships for knowledge exchange, technology transfer and capacity building in the field of Green Hydrogen.

Pakistan Ambassador in Vienna has conveyed that in response to the Pakistan Embassy in Austria’s persistent engagement with the UNIDO for introducing new technologies in industry and energy transition, with Green Hydrogen being at core of these discussions, the UNIDO has now responded positively and prepared a draft project proposal worth $14 million titled, “accelerating de-carbonization in the industrial sector of Pakistan for sustainable energy transition through innovative technologies.”

As per Pakistan’s Mission in Vienna production of green/clean hydrogen and ammonia in Pakistan is the main feature of this project. Some other elements of this project include the following: (i) finance of $ 04 million expected through Global Environment Facility (GEF) and co-financing of $ 10 million from other sources; (ii) 48 months duration of project; (iii) focus on developing green/clean hydrogen and ammonia; (iv) provision of technical assistance by UNIDO besides support for promoting green investments aimed at de-carbonization in the industrial sector; (v) implementation of the project through UNIDO, Ministry of Climate Change, Ministry of Industries and private sector; and (vi) UNIDO intends approaching World Bank and Asian Development Bank for the purposes of large-scale infrastructure development projects, if needed.

Copyright Business Recorder, 2024