Solar to solve power woes

10,000 MW solar initiative envisages annual savings of Rs 270 billion

Karachi: The power tariff is on an upward trajectory since the budget was announced in June this year owing to ever-increasing fuel prices in international markets triggered by the Ukraine war.

To tackle the beast, the government has embarked upon an ambitious programme of replacing expensive power plants with solar energy projects. Federal Minister for Energy, Khurram Dastgir, has announced that the government will soon float a tender for 600 MW in the first phase.

If everything goes according to the plan, all government buildings will be converted to solar energy. With this ambitious initiative, the government is expected to save billions of rupees annually by switching over to a cheaper and environment-friendly energy system.

The cost of solar power has dropped in recent years it is now cheaper than coal or other fossil fuels in many countries. Due to increased production, government subsidies, tax exemptions and mounting environmental concerns, the direct costs of solar energy for consumers have decreased considerably.

the government has launched a 10,000-megawatt fast-track initiative that envisages a saving of Rs270 billion annually. If compared to the LNG power plants, there will be a saving of about 300 billion rupees. Under the project, small solar panels will be installed across the country.

The government will not only provide land for the projects but will also guarantee power off-take. Investors will be exempted from all import-related duties and taxes; including income tax on profits and gains for the first 10 years. Foreign exchange for the project is likely to be arranged from abroad with the government providing a payment guarantee.

According to a report published in the Urdu Language Daily of Saudi Arabia, a senior official of the Ministry of Energy confirmed that the 10,000 MW project would be completed in the next two to three years, however, the 600 MW project would be ready for production in four to 10 months. The land for setting up solar panels for the project is available in Bahawalpur.

The government will also provide roof space for solar installation, and the minimum energy yield will be guaranteed by the vendor. All the power generated will become the property of the government. For the lease model, fixed quarterly payments will be determined through bidding and will be guaranteed in advance preferably through a revolving bank guarantee.

With the completion of this project, over 19 billion units will be generated annually at the rate of Rs10 per unit. Compared to furnace oil, there will be an annual saving of about 443 billion rupees. Moreover, if the coal power plants are also replaced by solar energy plants, then 270 billion rupees will be saved annually.

In the second phase, all tube wells facilitating more than 2.6 lac agricultural consumers will be converted to solar and taken off the grid, paving way for free electricity to the farmers. For the project, funding is being sought from international financial institutions like World Bank and Asian Development Bank. In the third phase, 1500 out of 10 thousand feeders of 11 kV in remote rural areas will also be replaced by solar energy projects.

As the nation still produces insufficient electricity, power outages are widespread in rural areas. The situation in these places is made worse by the high frequency of load shedding compared to the cities. In such a situation, it becomes difficult for farmers to water their fields in time for the growth of crops. Therefore, a solar tube well is an incredible idea for farmers and landlords in Pakistan. Pakistan, being an agricultural country, enjoys contributions of 19.2 per cent to the GDP and employs 38.5 per cent of the total labour force. More than 65-70 per cent of the population depends on agriculture for its livelihood.

The question arises whether this step will also have a trickle-down effect on the common people in the form of a drastic drop in food prices.

Under the plan, solar projects of 50, 100 and 200 megawatts will be set up across the country through private investment, generating six thousand megawatts and the government will not bear any cost for it will be a 100 per cent private initiative. According to the estimate of the Pakistan Solar Association (PSA), 2000 megawatt solar systems were imported in Pakistan last year and currently 160 megawatt solar systems are connected to net metering in the country according to NEPRA.