According to the Center for Science and Environment in Delhi, solar energy has finally “arrived” – it is now causing trade wars between the US, Europe and China, which tells you that this sector is growing and is lucrative (hence all the competitiveness). Today, solar energy is positioned to become a new source of power to lead the world to a low-carbon future and hopefully, away from a global climate catastrophe (caused by rising emissions from burning fossil fuels). For solar energy to become so cheap that it can compete with coal and oil, its deployments needs to be greatly scaled up.
That is happening already – not just in the western countries like Germany and Spain, but also in the developing world. In South Asia, Bangladesh and India are quickly deploying this technology already, which is becoming cheaper each year. The Chinese have actually managed to bring down prices in the last few years – it is estimated that in 2011 Photo Voltaic (PV) modules cost 60 per cent less than what they did in 2008. Today, China has a glut of solar panel production and Chinese manufacturers that supply most of the world’s solar panels are struggling to avoid bankruptcy after expanding too fast. The resulting plunge in solar-panel prices means that investors can expand into new markets. Pakistan can use this opportunity to request the Chinese government for major solar power installation financed by China. Instead of talking about nuclear and coal, we should be seriously considering this modern, renewable energy, which is THE energy of the future.
Currently, we have an installed capacity of around 23,000 megawatts and a demand of only around 16,000 megawatts so we are actually OK for now. What we need to do in the short term is to finance the circular debt and address the massive theft and corruption that takes place in our power sector. Energy reforms are of no use unless they are long-term and we need to be thinking of the future. Our political leaders should be planning for the long-term, which means thinking years ahead (taking our population growth and the increased demand for electricity into consideration).
According to development expert Dr Tariq Banuri, who is a great advocate of renewable energy in Pakistan: “Unless we have a solvent system, it is difficult to attract investment in new capacity. Not surprisingly, the only ‘investors’ we seem to be able to attract are snake oil salesmen out to make a quick buck (in fact, a quick million bucks), in cahoots with the high level decision makers, but with no interest in building new capacity and helping the country overcome the energy gap. This leads me to three points. First, given the insolvency of the system (and the insolvency of the exchequer), we have to be mindful of what the rest of the world would be willing to contribute in order for us to attain an adequate level of energy availability. This is the argument for renewable energy. In case of all other technologies, we will either be on our own, or may in fact face unanticipated repercussions in the future. Second, we need to strengthen the dual pricing system in such a way that it leads to strict segregation between low-income consumers and those with high-incomes plus the commercial, government (including military), agricultural, and industrial sectors. The best way of doing it is to reserve the low cost energy (WAPDA/ hydro power/ domestic gas) for the low-income sector and ask the industrial, agricultural, commercial, institutional (e.g., military) and high-income residential areas (e.g., defense housing authorities) to generate their own energy. Instead of diesel generators during load shedding, they should be encouraged to build large scale and efficient and non-polluting energy systems. Third, the incoming government has to address the stratospheric level of corruption in the energy sector”.
The Alternative Energy Development Board in Pakistan (AEDB), which is promoting renewable energy in the country, says that currently both the Solar PV and Solar Thermal based markets are rapidly developing in the country without any government subsidies or direct assistance. Although Pakistan has yet to install its first ‘MW scale’ solar PV project, there has been a sharp increase in the capacity of installed Solar PV technology in the country during 2012 (small-scale kW range installations). The AEDB report for 2012 explains that: “Considering the significant energy shortfall with heavy load shedding in major cities of the country with hardly any electricity being supplied to the rural communities, increasing trust and popularity of the effectiveness of the technology within the country as well as reduction in Solar PV systems globally, this trend is not surprising and is expected to continue in the future. It is also worth mentioning that development of the capacities of the local technical staff and vendors working in the Solar PV market has also resulted in improved quality of O&M and played a key role in developing consumer confidence to install Solar PV systems”.
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According to Najeeb Nayyer, a Karachi based engineer, who is also a big promoter of renewable energy, “The cost of a reliable 5.0 kW solar system is under 1.0 million rupees and there are several reputed suppliers selling solar panels, deep cycle batteries and inverters. There is also a massive growth in small wind turbines (upto 10 kW) and again a 5.0 kW system (for Sindh and Balochistan’s windy coastal areas) could be installed in 1.0 to 1.5 million rupees”. He points out, however, that before buying and installing such a system, a household should first reduce the house's total energy requirement by cutting down all wastage of energy. This can be done in part by switching to LED lighting – according to Najeeb, “Recently a friend in Lahore dropped the total load of all domestic lights (switched on in the house) from 1600 watts to 200 watts. It was done by shifting to LED lighting. Once you do something like this you have substantially reduced the acquisition cost of an alternate energy system as now you are buying panels, batteries and inverters for a much smaller load application”.
Another important energy saver is insulating the roof and walls, something that we just don’t do in Pakistan. Najeeb recalls: “For years during the 1990s, I was amazed to see the Karachi office of a friend which was cooled by a single 2.5 ton AC. The office was 2000 SFT. My friend is an importer of insulation and sound absorption materials and he had literally packed his entire office walls and ceiling with sample panels of his insulation boards and rolls. This is just one example of how effective the insulation can be in creating a comfortable environment with 1/4th the energy need”. There are now special paints available in the market to paint one’s roof to reflect sunlight – if nothing else, just try white washing the rooftop to lower the building temperature.
But solar power is not just a solution for the middle classes (the elite can afford generators) in this country – it is actually a pro-poor technology. For millions of poor people living off the grid in this country, solar energy is perhaps the only way they will ever get access to electricity. Carl Pope, a well known US based climate change and renewable energy expert who visited Pakistan this year, advocated the setting up of “direct current micro-grids that can provide solar lighting and cell-phone charging to rural households at a cost lower than current kerosene expenditures, with payback periods of less than two years”. He elaborated further: “There are over 10 million households in Pakistan without electricity. These households spend at least 750 million dollars a year on kerosene for lighting. For 1.2 billion dollars, which is about worth 18 months of kerosene bill, each one of these households can get a solar energy system. The payback period is 18 months, and if the households were to regularly pay back to the providers what they saved on kerosene, the provider would make a ton of money within two years. It's a good business, a big business, a two billion dollar business…”. He pointed out that people have tried similar models on smaller scale in Africa and India. “In this model, three things are required: a) a bank to provide financing, b) reputable distributors and supply-chain/logistics companies that make sure that the product that is being provided (solar panels) is a good product, that it will actually work, and c) somebody willing to provide the first-loss guarantee to the bank. If you get the last two together, they can get the bank”.
Without a doubt, solar energy has a substantial role to play in the country and needs to be actively promoted by the government on a priority basis. However, without some sort of financing, solar installations for now remain expensive and out of reach of the many. If bank finance schemes are made available, a lot more people will install solar systems. The technology is sound, the vendors are ready, the need is desperate – we just need the government and the banks to jump onto the solar bandwagon!