A World Bank study published on Tuesday shows that a significant increase in variable renewable energy (VRE) could aid Pakistan save up to $ 5 billion in costs over the next Twenty years, mainly through reduced fuel consumption.
The report states that “Pakistan must quickly implement a significant increase in solar and wind energy production.”
The study, entitled “Variable Renewable Energy Integration and Planning” (VRE), showed that Pakistan needs to significantly expand its use of solar and wind energy “variable renewable energy” in order to reach a share of at least 30 percent of total installed Energy Capacity by 2030 to help reduce energy costs, improve energy security and reduce greenhouse gas (GHG) emissions.
“Large and sustainable development of solar photovoltaic and wind power, along with hydropower and large investments in the power grid, is both achievable and desirable,” said Naji Bin Hussain, World Bank Country Director for Pakistan.
Such an initiative will bring immediate and long-term economic and environmental benefits. This will improve security of supply and will also place Pakistan at the forefront of the global energy transition. We stand ready to support Pakistan in achieving the goal of ensuring reliable and affordable energy for all by 2030.
According to the study, many sources of fossil fuel production are no longer competitive and should be phased out or significantly reduced. This includes domestic and imported coal, which is considered uneconomical compared to VRE for the next ten years and has additional disadvantages associated with greenhouse gas emissions, air pollution and the use of limited water resources.
The study, based on hourly analysis of all generation options available in Pakistan, found that significant and immediate VRE capacity expansion represents a “less costly” expansion strategy in Pakistan, including considering the costs of integrating variable solar and wind energy supply.
It should be noted that a short-term decline in demand growth – even a drop in demand as a result of the ongoing Covid-19 pandemic – does not affect this outcome, and the country’s energy policy must be viewed over much longer time horizons.
Even with the relatively short development and construction periods associated with solar PV and wind projects, competitive bidding for new VRE capacities and associated transmission investment should begin immediately if Pakistan hopes to benefit from cost, energy security and the environment. indicated in the study.
“We recognize that in order to achieve the renewable energy targets set out in the 2019 Alternative and Renewable Energy Policy, we need to make adequate investments in the transportation system, including modern automation, control systems and a robust forecasting system.” said a member of the National Electricity Transmission and Transmission Company (NTDC).
The report also recoomends that Pakistan needs to avoid repeating the load-shedding cycle followed by bailout purchases and oversupply, as it has in the past.
This means that it continues to plan for new capacity (from VRE) even when there is an oversupply in the country, recognizing that it will take several years for new capacity to appear in the stream.
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