The proposed medium-term national renewable energy policy for Pakistan will pave the way for the development of renewable projects under a transparent process for reducing transaction costs, delays, and frustrations by potential investors.
The two-day national consultative workshop held here on Tuesday discussed threadbare the proposed medium-term national renewable energy policy for Pakistan aimed at accelerating investments in the sector and expanding the renewable energy supply in the country.
The conference organised by the Asian Development Bank (ADB) and the Alternative Energy Development Board (AEDB) was attended by over 100 delegates from the government, private sector, and the donor community.
Some of the important recommendations included streamlining of roles and functions of various government institutions, compensation to National Transmission Dispatch Company for incremental costs incurred for connection to grid, continuation of general incentives such as sovereign risk guarantee, fiscal and financial incentives, and simplification of certified emission reduction (CER) scheme.
The proposed five-year policy is designed to replace the current policy, which is set to expire in 2009. Despite the government's efforts over the past few years, private investments in commercial renewable power generation remained lacklustre, partly due to lack of investors' interest and the absence of local precedent, policy, regulations, and tariff structure. Only a handful of independent power producers for wind energy project are scheduled to be signed by next year. The policy proposes a system of multiple technology-based fixed feed-in tariffs based on actual avoided costs, as the current practice of negotiated tariffs based on financial cost-plus formulation has proven to be time-consuming, contentious, and ineffective.
The policy also recommends competitive tendering for limited projects using solar, photovoltaic, and waste-conversion technologies, as these are not yet financially feasible for Pakistan. The new policy will adopt approaches that have been proven successful in other countries, including an introduction of technology-based calculation to determine the optimum mix of renewable and conventional power generation. External costs and benefits of the various energy options, such as greenhouse gas emissions and oil import prices are also to be considered.-PR