At a time when Pakistan has started getting as many as 206 megawatts of electricity from windmills in the national grid, consumers, including businessmen, urge the government to improve its policies to develop generation from solar energy too. Punjab government inaugurated its first-ever Quaid-e-Azam solar park of 1,000 megawatts in October 2013, claiming that it would start generating 100 megawatts of electricity by December 2014 but it is yet to be added to the national grid.
Nauman Khan, one panel importer and chief executive officer of Grace Solar Pakistan, told Business Recorder on Thursday that windmills can only be installed in the specific wind corridors while the solar panels can be installed anywhere in the country.
"Wind projects are in fact independent power producers and they earn money by providing electricity to the national grid," he said, urging the government to also introduce net-metering for the solar projects as well.
Commercial banks should come forward and finance solar installations by the individuals as they are doing for cars, generators and other projects, he said.
"Majority of the individuals cannot afford the upfront cost of solar panels installation and if the banks start financing them, it can bring an immediate boom in the economy and energy sector," he said.
Pakistan faces a year-round electricity crisis and the shortfall jumps to over 6,000 megawatts in summer. The ruling party has often claimed to facilitate the private sector for investment in the renewable energy but facts do not bear witness to this claim.
Naseer Ahmad, president of Renewable and Alternative Energy Association of Pakistan, told Business Recorder that inconsistency in the government's policies about the renewable energy was hindering its uptake in the country.
"There is no consistency in policies of the government regarding the renewable energy and this is a major obstacle in the investment in this sector," he said.
Ahmad said the government should itself invest in renewable energy as it is far better than investing billions of dollars in dams and other long-term projects.
"The State Bank should prod the private banks to start financing for installation of solar panels in homes and offices," he said, adding the solar panels are costly and buying power of majority of the people is weak.
According to a 2011 report published by the International Energy Agency, 38 percent of Pakistan's population lacks access to electricity; therefore the government should also launch simultaneous projects to provide electricity to more people instead of just focusing on alleviating load-shedding.
The Bangladesh government aims to provide electricity to all of the country's households by 2021. With financial assistance from the World Bank and other development partners, it plans to generate 220 megawatts of electricity for around 6 million households by 2017 through the solar home system programme.
Asjad Imtiaz Ali, Chief Executive Officer at Alternative Energy Development Board, said that eight windmill projects of some 500 megawatts are in different phases and they will all start contributing to the national grid by 2016.
He said the government was just facilitating the private sector to install different renewable projects and was not investing itself. "We expect to get 100 megawatts of electricity from the Quaid-e-Azam solar park by next month while the remaining 900 megawatts will come to the national grid by next year," he said.
Meanwhile, the Economic Co-ordination Committee (ECC) of the Cabinet has reportedly reduced delayed payment rate to KIBOR + 2 per cent from 4 per cent in the Standardised Project Agreement (SPA) for solar PV power projects.
Sources said that SPA is basically a legal framework for energy purchase agreement between government and parties approved by the last ECC meets chaired by Finance Minister Ishaq Dar. SPA for solar energy based projects under the policy for Development of Renewable Energy for Power Generation, 2006, is subject to; (a) requisite clarification be incorporated in section 9.3(a) of the Implementation Agreement which now states: "including, to the extent applicable, relating to locally manufactured items"; (b) the delayed payment rate has now been reduced to KIBOR + 2%; (c) the gird related events leading to extension of Required Commercial Operation Date are covered under the definition of "Emergency" in the Grid Code of Energy Purchase Agreement."
The ECC also authorised Alternate Energy Development Board (AEDB) to make project specific amendments in the SPA for solar power projects, as required during negotiations, but which do not increase government obligations or liabilities beyond those stipulated in the Project Agreements.
Water and Power Ministry has reportedly said that government policy for Development of Renewable Energy for Power Generation, 2006 provides for standard security agreements for grid-connected Renewable Energy lPPs. The draft standardised security agreements, also called the Project Agreements, comprises the Implementation Agreement (IA) and the Energy Purchase Agreement (EPA). These agreements provide legal and contractual framework for the design, financing, engineering, procurement, construction, commissioning, operation and maintenance of power projects based on solar energy. Initially, the project agreements were prepared by AEDB for solar energy projects with the support of GIZ and were circulated amongst stakeholders. Several fundamental observations were raised on the draft agreements. As a result, the AEDB Board assigned the task of preparing revised project agreements to an international legal consultant, who had earlier prepared standard project agreements for thermal power projects. These prepared drafts were not favourably received by the industry because these drafts demanded similar risk profile in the project agreements as was offered in the ECC approved wind power project agreements. The industry also asked for limited technology-specific changes.
The AEDB, based on feedback from the industry, held meetings with project sponsors on solar EPA and IA from December, 2014 to January, 2015 and incorporated their suggestions in the Project Agreements. The new solar upfront tariff regime announced by NEPRA on 22nd January, 2015 has also been made a part of the document. The overall contractual framework, obligations and liabilities of the government have been maintained as per ECC approved security package for other power generation technologies such as thermal, wind etc. Technology based specific modifications have been made in compliance with NEPRA's Upfront Tariff determination for solar PV projects. The Project Agreements have been prepared in consultation with NTDC/Central Power Purchase Agency, prospective solar PV power project investors, local and international solar technology consultants, experts and lending institutions.
The ECC was further informed that the Project Agreements catered for the requirements of majority of potential solar energy based power projects. However, there would be room for project specific amendments such as extension of contractual timeframes due to the phasing of transmission access by NTDC, location of a project, and technology etc. Additionally, it will be ensured that government exposure does not increase beyond the agreement's framework. AEDB's legal counsel has cleared the Project Agreement documents for submission before the ECC for approval.
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