Renewable energy policy

The three-phase renewable energy policy, approved by the ECC, constitutes the first such solid initiative in the country to meet its spiralling energy deficit.
The policy offers liberal fiscal and financial incentives to the private, public-private and public sector renewable power projects, thereby deregulating small-scale power generation through renewable resources (upto five megawatts for hydropower and one megawatt for the net metered sale), which will be particularly beneficial for micro, mini and small-scale hydro and solar-based power production.
According to a Recorder Report, the policy framework for immediate, medium-term and long-term renewable energy generation, covering periods from January 2006 to December 2007, from January 2008 to December 2010 and from 2011 onwards respectively, lays down the modus operandi to be followed during each phase. The first phase ie from January 2006 to December 2007 will be largely devoted to creating awareness among the stakeholders of the need to develop renewable energy sources and to study the support mechanisms employed in other parts of the world.
It also spells out the guidelines for tariff determination by Nepra to supply wind power to the national grid. Small projects for self-use will not require any permission from the government and the investors will be in a position to market surplus power to Discos.
The policy recommends the signing of long-term power purchase agreements to secure confidence of the private sector investors. The medium-term strategy deals with evolving specific marketing and financing mechanisms, RE monitoring and evaluation systems, and an indigenous manufacturing and technical capability.
In the long-term perspective, renewable energy will be fully integrated in the country's energy planning, leading to exposure of RE technology to full competition from the alternative sources of energy. Under the policy vision, renewable energy will become widespread at the rural and urban household level, leading towards provision of electricity to the entire population.
The approval of national policy on renewable energy, ie hydropower, solar, wind, geothermal and biomass, augurs well for the country's energy sector. The incentives offered to investors include zero customs duty and sales tax on import of machinery or spare parts, exemption from income tax, turnover tax and the withholding tax on imports, repatriation of equity along with dividends, as well as the permission to raise local and foreign finance etc.
Other incentives include the permission to issue corporate registered bonds, shares at discounted rates and the purchase of securities etc. A special feature of renewable energy is that it is practically inexhaustible, does not harm the environment or compromise the ability of future generations to use the same kind of services.
In Pakistan, the largest single source of renewable energy is, of course, hydropower followed by wind and solar energy. Under Wapda's Vision 2025, the country has to construct storage capacity of 65 MAF by 2015. But will it be possible for the government to achieve the target by the cut-off date, given the extremely slow pace of implementation of power projects in the country?
Although the central development working party (CDWP) has given concept clearance for Diamer-Bhasha, Kalabagh and Akhori dams, it seems hardly likely that these projects will be completed by the target date, given our propensity to allow things to linger on.
Meanwhile, the country's annual energy deficit has been rapidly mounting, and according to one projection, it will be at least 1,000 megawatts from 2007 onwards, while its demand for energy has been growing by six to seven percent per annum. Solar parks and windmills are the other major renewable energy projects.
Incidentally, windmills are installed at places where there is a steady wind blowing at least at a speed of 20-25 kilometres per hour. That is why hilltops and coastal areas are best suited for this purpose. Similarly, solar marks yield optimum results in a hot climate, such as in Balochistan. There are plans to install 100 wind power turbines in the remote coastal areas of Sindh and Balochistan.
The approval of renewable energy (RE) policy by the ECC is a good, though belated, step that can facilitate the tapping of the abundant RE resources present in the country. However, it would be better to fine-tune the policy to make its applicability more comprehensive so that no snags crop up in its implementation in future.