This blog is simply dedicated to one of my passions; to environmental problems and their resolution, focusing mainly on Pakistan; let's join hands to make this planet of ours better, greener, safer!
Monday, October 10, 2011
Karachi, Oct. 05 -- IN 1978, the first multi-megawatt wind turbine power plant set up in Denmark triggered an exponential growth of global wind power industry. Currently, the wind energy output worldwide, stands at 157,899MW, mostly concentrated in the US, Europe and China.
India started its commercial wind power generation in the 1990s and now has a total installed capacity of 14,200MW.
Pakistan started looking into harvesting the wind potential in 2002 and the Alternative Energy Development Board (AEDB) was set up the following year.
According to the AEDB, Pakistan has the potential to produce 50,000MW of wind energy along the wind corridors of Jhimpir, Gharo and Ketti Bandar. However, not a single commercial wind farm has been commissioned so far.
The Renewable Energy Policy 2006 was designed to attract investment in renewable energy sector. The policy is investment friendly and offers a return of 17 per cent in real dollar terms. In addition, there is a wind risk guarantee under which the investor will be paid even if the plant doesn't produce electricity due to low or no wind. Despite such an investment-friendly policy, Pakistan is lagging far behind its regional peers.
The main reason for this has been the government's inability to take the driving seat. It has been a mere spectator. The wind mast that records the wind data has only been installed at a single site in Nooriabad, Jhimpir. There is a need to set up at least one wind mast, one each at Ketti Bandar and Gharo because of the importance of the accurate wind data for the investors.
Currently, the wind data collected by AEDB in Jhimpir dates back to 2003 including many missing months due to persisting faults in the equipment. According to three international wind energy consultants working in Pakistan, the quantity and quality of data available to the AEDB is not sufficient enough to carry out a reliable feasibility study.
Second, whenever a government seeks private investment in a new technology, it should set up a pilot project. This not only helps in marketing the technology, but also builds up the investor's confidence.
Unlike in China, India and Sri Lanka where the governments took the initiative to set up a state-owned commercial wind farm, Pakistan failed to establish any such project as a prototype for the private investors to benefit from it. The results are obvious.
The private investment in wind power sprouted in regional economies barring Pakistan, despite less favourable policies for investors as compared to Pakistan. The AEDB has already issued 90 Letter of Interest (LoI) to various potential investors to develop 4,500MW of commercial wind farms of 50MW each. However, only six out of 90 projects are progressing while the sponsors of the remaining are just sitting idle on the land allocated to them.
The reason for the "wait and see" policy adopted by these investors, is the exogenous risks associated in developing a wind farm as there is not even a single successfully operating commercial wind turbine installed in the country.
The government needs to set up a pilot project. The estimated project cost of developing a 50MW wind farm is between $135-145 million. With a debt to equity mix of 75:25, the government requires between $34-36 million (Rs2.9 - 3.1 billion) while the rest of the amount can be easily arranged in the form of debt from no more than a consortium of five banks.
If set up, the state-owned commercial wind farm project would have certainly reduced the lead time by at least 12 to 16 months that is currently taken by the investors in understanding the investment process, selecting the appropriate engineering, procurement and construction (EPC) and operations and maintenance (O&M), hiring contractors, drafting the concession agreements and negotiating security package.
The government is promoting investment in alternative energy sector other than wind e.g. solar, biomass, etc. For that purpose, a new draft policy "Alternative and Renewable Energy Policy 2011" has been circulated for the feedback from various stake holders.
While it is expected that the new policy to be effective shortly, it may meet the same fate as "Renewable Energy Policy 2006" if the government doesn't step forward proactively and set up the state-owned commercial proto type projects of electricity generation from different alternative energy source Published by HT Syndication with permission from Right Vision News. For any query with respect to this article or any other content requirement, please contact Editor firstname.lastname@example.org