As usual, Pakistan finds itself caught in a quagmire when it comes to its energy policy. Never mind that it added power when it didn’t have the capacity to bear charges. Keep aside that it hasn’t promoted economic growth in any way to ensure power consumption is at par with ‘capacity’ to produce. Also let it be that its inconsistent policymaking has always taken a turn for the worst.
This article is about addressing Pakistan’s energy concerns and the role renewable energy can play.
As this is published, a severe heatwave is taking its toll on the country.
However, the debate over the reduction of buyback rates for net-metering electricity is also dominating headlines. Ironic.
The introduction of net-metering was a step towards incentivising solar roof-top installations, empowering households and businesses to generate their electricity and sell excess power back to the grid.
However, the proposed cut in buyback rates has sparked concern among solar users who view solar power as a means to alleviate rising energy costs. Money saved will also be used to pump economic growth one way or another. But this kind of economic theory is lost on Islamabad and so-called policymakers.
Revision of buyback rates: PM directs Nepra, PD to amend net metering rules
Coming back to the discussion.
While some argue that a reduction in buyback rates may not significantly impede the growth of solar power, it is essential to consider the broader implications. There are also whispers of a move away to ‘gross-metering’.
Zeeshan Ashfaq, CEO Renewables First, a think-tank for energy and environment, says that completely doing away with the net-metering policy is a regressive step and represents a conscious rejection of technology.
“Fear and suspicion of anything new appear to be endemic among our policymakers who are adamant on compelling people to adopt centrally planned electricity sources, irrespective of the financial impact on the public,” said Ashfaq via message to Business Recorder.
Net metering consumers: PD presents buyback rate cut mechanism to prime minister
“Under the circumstances, progressively revising tariffs for new net-metering users seems only reasonable; however, applying such revisions retroactively does not reflect positively on the government’s credibility, which is already in expeditious decline.
“The addition of power plants running on imported fuels with over 10 GW capacity in the last 7-8 years serves is evidence of such impositions,” he added.
Progressive revision of tariff means gradual reduction in buying electricity from solar producers as technology matures and is deployed at scale.
Systematic reduction with yearly revisions through prior notices would ensure a balanced approach that will not only support growth of renewable energy but also create stability in the market.
“Net metering opens up numerous opportunities, such as implementing demand-side management and demand control measures, which could significantly manage national peak demand during the summer months, saving billions spent on additional capacity,” explained Ashfaq.
In an article written by energy sector expert Moin M Fudda for Business Recorder, it was stated that the government is buying a unit of electricity from Solar IPPs at an average of Rs38.59. Meanwhile, it costs just Rs22.9 from roof-top solar producers. The government is looking to cut this rate as well.
It is reported that based on the permissions granted by Discos, the country’s total roof-top solar installation is estimated at 2000MW of both residential and commercial. From these installations, on an average 500MW is supplied to Discos since almost three fourths is self-consumed.
Based on the current capacity factor of 17%, only 85MW is a surplus from net metering which is 0.3% of the total lowest transmission of 28,000MW to the National Grid.
Net metering policy likely to be revisited: Leghari
Despite their minimal contribution to the national grid, targeting roof-top solar generators instead of IPPs seems absurd.
Recent developments, including proposals to slash buyback rates for roof-top solar generators, threaten to undermine progress in the renewable energy sector. Such measures risk stalling the momentum gained through initiatives like net metering, which have garnered substantial public support.
To chart a sustainable energy future, policymakers must prioritise collaboration between the Power Division and the Ministry of Climate. Decisions must align with environmental imperatives and emission reduction targets.
Furthermore, empowering households and small businesses to adopt solar infrastructure through financing initiatives and facilitating single-phase net metering can democratise access to renewable energy.
Long-term strategies for domestic manufacturing of solar panels and inverters are essential to fostering self-reliance and technological innovation.
Can aging thermal power plants in Pakistan be revitalised?
In conclusion, the path to a resilient energy landscape necessitates holistic policymaking, mindful of environmental stewardship and social equity. As the nation navigates its energy transition, a concerted effort to engage stakeholders and uphold regulatory integrity of the NEPRA will be paramount.
Only through collective action can Pakistan realise its renewable energy potential and secure a sustainable future for generations to come.
But one thing’s for sure: Pakistan’s policymaking needs to become consistent, coherent, and have a long-term view on issues. The time to make mistakes when it comes to the economy has long gone. We don’t afford mistakes anymore. And remember: it is the people who will take economic growth forward. This path needs to be inclusive.
The article does not necessarily reflect the opinion of Business Recorder or its owners