The efforts toward green energy transition have been underway for some time in Pakistan.
Dr. Hassan Daud Butt
The global financial downturn induced by COVID-19 has hampered the effectiveness of renewable energy developments, impeding the accomplishment of the United Nations’ sustainable development targets.
In the past three years, the pandemic has significantly delayed renewable energy progress mainly due to the investor’s capacity to travel across countries and create suitable arrangements for joint ventures. This widespread dilemma also jeopardized the supply networks of renewable, impeding the transition to renewable energy.
As a response, the world further electrifies energy use in the transportation, building, and industrial sectors. In the post-COVID time, Chinese has given its post-Covid FDI plans under the Global Development Initiative (GDI) where China continues to make greater contributions to global development through deeper reforms and higher levels of openness.
Pakistan can leverage the initiative to address the challenges in the renewable energy transition and also explore opportunities for innovation, investment, and partnerships. We are witnessing new partnerships being built including the 10th Arab-China Business Conference being held and Saudi Arabia’s Ministry of Investment has signed a $5.6 billion deal with Chinese electric car maker Human Horizons.
In Pakistan, supporting green growth can be achieved through various measures and budget allocations that prioritize environmental sustainability and the transition to a low-carbon economy.
Allocating funds and providing financial incentives, such as tax breaks or subsidies, for the development and deployment of renewable energy projects can encourage investment in clean and sustainable energy sources like solar, wind, and hydropower, contributing to green growth and reducing reliance on fossil fuels.
Similarly, allocating resources for energy efficiency initiatives, including public awareness campaigns, research and development, and implementation of energy-saving measures in public infrastructure and buildings can help us conserve energy and contribute towards green growth.
Green growth seeks to decouple economic growth from environmental degradation. It acknowledges that traditional models of economic development often rely on unsustainable practices that deplete natural resources, contribute to pollution, and exacerbate climate change. In contrast, green growth focuses on sustainable development pathways that minimize environmental impacts and promote the efficient use of resources.
This year the Ministry of Planning and Development has launched a multi-pronged 5Es Strategy Framework. Out of the five Es, the fourth E relates to Energy & Infrastructure. The government through the initiative wants to promote secure, sustainable, and affordable energy for all including the industry and other development sectors.
This fourth E also emphasizes energy efficiency and conservation measures to reduce consumption, cut costs, and promote environmental sustainability. Similarly, in order to ramp up no fossil electricity, the federal government has proposed eliminating customs duty on solar panels and related equipment in the budget for the fiscal year 2023–2024 in an effort to promote power generation using alternative energy sources and to support domestic solar panel producers and promote solar energy consumption throughout the nation.
The government has also proposed to exclude inverters, batteries, and other similar equipment from the duty in the financial bill and to explore the solar potential of approximately 2900 GW.
These efforts toward green energy transition have been underway for some time in Pakistan. In 2013, also when Pakistan and China started their engagement under the CPEC JWG on Energy, the first and foremost agenda was to develop roadmaps for the energy transition and to build an energy basket that can ensure energy security by using all available indigenous sources including hydel and to boost renewable energy generation as electricity is a critical input for economic development and the provision of adequate, reliable and affordable electric power is essential for economic development, human welfare, and better living standards.
It was mutually agreed to speed up with de-carbonization plans and integrate intermittent renewables such as wind and solar while maintaining reliability. The challenge was also the investment required to transmit and integrate large quantities of wind and solar power for which a Partnership with China was ever so critical as it can help Pakistan develop its renewable energy potential as at that time a perception persisted that solar and wind are too expensive, or that they are only competitive with conventional generation plants because of government incentives, such as tax credits.
During the SWOT analysis, the biggest strength was Pakistan’s strategic geographical location which makes it a potential hub for energy trade. The combination of wind and solar PV has the advantage that the two sources will complement each other since the peak operating times for each system occur at different times of the day and year in order to utilize the huge renewable resource potential of Pakistan in a sustainable manner.
The power generation of such a hybrid system including battery storage, is more continuous i.e. fluctuates less in terms of time and frequency if these are developed and operated jointly.
In the LTP of CPEC, it was planned to attract Chinese investment to develop wind and solar energy based on local conditions and establish diversified energy supply channels, and to develop the industry for manufacturing of energy sector equipment required for generation, transmission, and distribution including renewable energy technologies. It was also desired that both countries shall negotiate to sign cooperation documents on grid connectivity, power utilization, and electricity price in due course.
But for all this to happen Multiple intergovernmental processes have to be established to promote coordination and exchange, including High-level Political forums on energy transition to strengthen coordination and collaboration on data and statistics among stakeholders to create the enabling environment for the energy transition to take place. This also calls for alignment of economic growth and green and low-carbon transition agenda based on own realities and requires enabling domestic policies, and cooperation based on the principle of common.
Pakistan must continue to look towards China and the world to increase technology transfer and capacity support by contributing proactively according to our own national conditions and capacities in view of the aggressive targets pertaining to renewable energy envisioned by the Government of Pakistan in the Indicative Generation Capacity Expansion Plan (IGCEP). Pakistan must ensure indigenization of energy mix with higher and aggressive targets of on-grid renewable energy generation mix of 20% by 2025 and 30% by 2030. Future plans are required to be aligned with international best practices pertaining to renewable energy and the transition towards the already approved multi-buyer and multi-seller market reforms under the Pakistan- competitive trading bilateral contract market (CTBCM).
This will also require strengthening institutions and enhancing their capacity to provide Ease of doing business based on principles of good governance and absolute harmony as only through these steps can a fair and just transition be achieved and green, low-carbon, and prosperous Pakistan.
The writer is a
projects management specialist and is a faculty member and
research fellow at
various academic
institutions.
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