While the debate on power sector continues to revolve around more generation versus curtailing T&D losses, Engineer Asad Mahmood and his colleagues at NEECA have been quietly lobbying for energy efficiency & conservation, which seemed like a lost cause in Pakistan.
Arguments for energy efficiency are usually treated with suspicion, as it is often assumed that conservation can make little difference in ensuring energy sustainability. BR Research asks Asad Mahmood how his organization plans to make efficiency a priority in the country.
BR Research: Why did NEECA need to be created when another federal body, Enercon, already existed? If the two organizations have similar goals to achieve energy conservation at national level, how is NEECA distinct from Enercon?
Ahsan Mahmood: NEECA is the successor organization to Enercon, National Energy Conservation Centre, which was formed in 1986. While NEECA shares its predecessor’s vision, Enercon lacked the legal tools and muscle to enforce regulation, and only served as a guiding body that made recommendations for energy conservation in different sectors of economy.
In its heydays, Enercon enjoyed a period of success as its projects received support from USAID and Planning Commission. Enercon pioneered building codes for construction sector, which was a first in South Asia. However, lack of sustained interest by successive governments led to reassignment of agency to several different ministries. The department suffered from a brain-drain as it was unable to retain talented experts and was reduced to a stepping stone for civil servants waiting out their promotions.
In contrast, NEECA has been formed as an autonomous agency through an act of parliament in 2016. Under its mandate, NEECA has legal jurisdiction and administrative control to implement business rules that cover five major sectors including agriculture, industries, power, building & construction, and transport.
BRR: Why do you believe that NEECA will succeed where Enercon failed, and instead suffer from a similar lack of political will?
AM: As an instrumental part of the team that fought a long hard battle for eight years to get legislation through parliament, I certainly hope that we will succeed this time.
Back when Enercon was formed, prices were so low that energy cost was considered a negligible input in industrial production. Ever since, the context of global conversation about energy efficiency has been transformed completely. Locally, we notice an increased interest by different organs of state in energy security. Conservation and sustainability have become a regular theme due to growing awareness about climate change and degradation.
Nevertheless, the single most powerful determinant of our success will be attracting and retaining competent professionals who exhibit an entrepreneurial mindset. It will also remain essential that NEECA becomes financially self-sustaining. We plan to achieve this in several ways by creating regulation for product licensing fee, labeling fee, energy audits, etcetera to businesses of all sizes and color.
BRR: Given that following the 18th Amendment environmental conservation has become a provincial subject, does NEECA have provincial representation? Should autonomous bodies not have been created on provincial level?
AM: Not for two reasons: first, power continues to remain a federal subject, and second, since NEECA plans to set standards and regulations, it is crucial that we create industry-wise standards that are consistent across the country.
Of the 23 board members we have representation by federal and provincial secretaries from ministries of finance, petroleum, natural resources & planning, science & technology, housing & works, agriculture, and industries. In addition, provincial authorities already engaged in conservation are also represented, such as Punjab Energy Efficiency & Conservation Agency (PEECA); Power Development Cell, Sindh; Pakhtunkhwa Energy Development Organization; and, Energy Department, Balochistan.
By involving a wide variety of stakeholders, especially private sector professionals such as nominees of the FPCCI, NEECA shall achieve greater success at implementing its mandate. This would not be possible if it only had a provincial role.
BRR: What are NEECA’s short-term and medium-term targets? What does NEECA hope to achieve through conservation when incentives & subsidies already exist in power sector for investment in renewable energy generation?
AM: Our goal is to create incentives for suppressing energy demand in various sectors. We seek to adopt international standards and energy saving models. Setting up a renewable energy plant requires large scale capex that usually entails importing machinery that drains precious foreign exchange. Currently, per mega watt generation costs one to two million dollars’ worth of investment, which roughly translates into 3-5 cents per kilowatt, which increases further due to T&D losses.
Therefore, we believe saving 1 unit is better than generation of 3 units, as gains from efficiency lead to higher savings. By enforcing appropriate regulation, we believe Pakistan can target demand suppression of 500-1,000 megawatts per annum, which equals $500-$1,000 million less capex investment on the generation side.
BRR: Can you outline major achievements secured by your agency? What potential do you see for energy conservation in the factors and labor market over the coming period?
AM: We have made some major breakthroughs in recent years, one such example is the introduction of Pakistan Energy Labeling regime enabling consumers to buy energy efficient products. Another is the zig-zag brick kiln initiative that has achieved 40 percent less coal, 70 percent less emissions, and at the same time doubled the production level. I believe that with adequate funding and targeted regulation, NEECA’s initiatives will pick up pace and generate two to three thousand jobs for engineers, environmentalists, and energy auditors.
Similarly, cottage and informal sectors show huge potential for conservation, as small business owners operate under very lean budgets, are usually cash-strapped, and jump at any opportunity to increase cost savings. Recently, laboratories for standards have been established for various appliances, such as fans, LEDs, and refrigerators have been established by stakeholders such as PCSIR.
Once NEECA introduces regulation for product labelling viz energy efficiency, the commercial sector will be bound by law to seek product registration by accredited labs; this in time should create a market of its own, leading to more jobs in the technical sector.
In addition, we are already running awareness campaigns in education sector, especially universities about the NEECA Act. Career mentors and students both have begun to foresee that demand for trained resource will soon pick up, encouraging them to seek specialization in this area.
BRR: Is the authority also involved with any international bodies? If so, what objectives have been set and achieved under these programs?
AM: We have received technical assistance from World Bank; similarly, we have signed MoU with JICA to conduct domestic household survey for energy efficient appliances. UNEP has also given a grant of $1.6 million for a pilot project to establish LED/SMD standards and to prepare a National Efficient Lighting Strategy.
Apart from donor funded projects, we are also running independent projects such as advocating legislation for provincial C&W departments to only procure labelled energy efficient appliances. We are also in the process of revising PC-1 and PC-II forms to bring them in line with latest standards in energy efficient construction methods. While we can create both supply and demand side pressures on manufacturers and consumers to encourage demand for energy efficient appliances, the biggest challenge we face is on the retailers’ end. We plan to start an awareness program for retailers to push labelled appliances by creating the right incentives for them to push compliant brands.
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