By Engr Hussain Ahmad Siddiqui
The National Energy Security Plan 2005-2030 envisaged development of renewable energy, with focus on wind-power, to achieve, from almost zero to a five per cent share in national power generation mix by 2025. However, the ground realities do not raise any such hopes.
Anticipating completion of the pioneering 150-MW wind-power project and other renewable energy on-going schemes of 30 MW capacity by 2005, the plan envisages progressively adding 700 MW to the national grid by 2010. Another 800 MW to attain a total of 1,680 MW installed capacity by 2015. By the end of 2025, it is planned to have 5,850 MW cumulative renewable/wind energy power, while total power generation capacity at national grid is projected at 110,760 MW.
But the Alternative Energy Development Board (AEDB) has not yet been able to develop a single project worth mentioning, either of wind-power or of solar energy. Tall claims made by AEDB since its inception in July 2003 have proved to be mere rhetoric.
Over the last five years, the AEDB has issued as many as 93 LOIs (letter of interest) to foreign and local investors for setting up a number of wind-farms, each of 50 MW or higher capacity, on build, operate, own and transfer (BOOT) basis. Many other EOIs (expression of interest) are said to be in various stages of processing for approval.
None of the prospective independent power producers (IPPs) however has obtained the letter of support (LOS) as the requisite power purchase agreement (PPA) with Wapda/KESC has not been concluded by any. The signing of an Implementation Agreement (IA) is next step towards achieving financial close for the project. Most of these LOIs have thus become invalid. Interestingly, the government has already allocated 23,645 acres of land in Sindh to 15 prospective IPPs and an additional 10,330 acres of land allocated provisionally to another seven investors.
Initiative for promoting large-scale use of wind-power was taken sometime in 1997-1998, when the United Nations Development Programme (UNDP) undertook a comprehensive study for commercialisation of wind-power potential. The study, completed in April 2001, confirmed that the coastal belt of Sindh possesses enormous potential, of 50,000 MW power generation, for economic and sustainable wind-power development.
The first project identified consisted of two or three wind-farms of 50 MW capacity each in the Gharo-Keti Bunder wind corridor. The project, to be developed by the then ministry of environment, rural development and local government was to take-off in June 2002, but was transferred, at initial stages, to the AEDB on the promise of implementing it on fast track basis.
AEDB was provided Rs100 million by the government for some of the activities related to the project that was basically funded by the UNDP, GEF (Global Environment Facility), a division of the World Bank) and NORDIC of Norway. In addition, technical assistance was provided to the board by the GTZ (German Agency for Technical Co-operation) worth euro 3.50 million and the Asian Development Bank (ADB) amounting to $0.55 million. Instead of implementing the project itself, however, the AEDB decided to associate private sector through international competitive bidding.
After evaluation of the proposals received from many international and domestic entrepreneurs, the board had awarded these projects of cumulative 150 MW capacity to three selected companies. A 50-MW wind-farm will cost about $50 million and spread over an area of 1,000-1,200 acres of land. But, the Sindh government has allotted 19,807 acres of land to these prospective IPPs.
The projects, which were to be completed by June 2005, were re-scheduled twice and the last COD (commercial operations deadline) for the three projects was committed by the AEDB as June 2007. But there is no progress achieved on any of the three projects as yet, and it is not known when the projects could see light of the day, if at all. If implemented in time, it would have helped in reducing present power shortage in the KESC system.
A variety of factors are cited that have impeded implementation of the projects in hand, such as non-availability or longer delivery of wind turbines due to recent surge in international market, and lack of wind mapping and resource assessment.
This is hardly acceptable since all the three projects are being developed by world-reputed manufacturers of wind turbines, i.e. GE Energy of Canada, Vestas of Denmark and Siemens/Fuhrlander of Germany, in partnership with the domestic investors, and have developed similar projects recently in other countries.
On the other hand, the government offers various financial and fiscal incentives to encourage investment in wind-power, including guarantee for power purchase and protection against various risks including that of availability of wind speed that impacts on energy output. The land required for wind-farms too has been made available on subsidised government rates. Tariff for wind power generation has been revised upward a numbers of times, and the latest levelised tariff for the first 10 years is cents 11.6089 per kWh and for next 10 years cents 4.0300 per unit. This is comparable to tariff allowed for thermal power generation projects.
Progress on other wind-power projects, of cumulative 700 MW capacity, also remains unsatisfactory. In all, seven prospective IPPs have completed project feasibility studies, which are reported to be neither bankable document nor of international standard, as required under the policy.
National Electric Power Regulatory Authority (NEPRA) has issued generation licenses to six companies; namely New Park Energy (Pvt) Ltd, WinPower (Pvt) Ltd, Green Power (Pvt) Ltd, Tenaga Generasi Ltd, Milergo Pakistan Ltd and Zorlu Enerji Pakistan Ltd. Meanwhile, a new transmission- line network from Mirpur Sakro to Thatta is being constructed by Wapda/NTDC in order to sustain the load generated by the proposed wind-farms.
Wind energy is rapidly growing energy resource in the world. Today, global installed wind-power capacity has surpassed the mark of 100,000 MW, including on-shore and offshore installations. In 2007, wind-power capacity had increased by a record 20,000 MW bringing the world total to 94,100 MW.
Germany, with 22,200 MW, has the largest wind-based power generation installed capacity, followed by the USA (16,800 MW) and Spain (15,100 MW). Denmark leads in offshore wind-power installations. Emerging markets include India, with installed capacity of 8,000 MW, and China, with 6,050 MW in 2007.
China has made remarkable progress in wind-power development—from 2,600 MW in 2006 to 10,000 MW by August 2008. Now China plans to set up the world’s largest wind-power project in the northwest, consisting of three wind-power plants, with an initial capacity of 6,000 MW to be attained in 2010, and finally reaching at 15,000 MW in 2015. When would Pakistan, which has around 346,000 MW wind-power generation potential, get on the bandwagon?
It is time for effective implementation of action plans and programmes launched by the AEDB. As Pakistan faces acute shortage of power generation, it becomes imperative to exploit, on priority, all possible avenues of energy resources commercially, in particular clean, abundant, inexhaustible, cheap and indigenous resource—-that is wind-power! The writer is former chairman of State Engineering Corporation, Ministry of Industries and Production.
Source: Daily Dawn, 29/9/2008