Govt unveils Alternative Renewable Energy Development Policy

Around 8,000MW cheap renewable clean and green energy will be added to the system by 2025 while it will be increased to 20,000MW by 2030.

ISLAMABAD    -     Federal Minister for Energy Omar Ayub, while announcing Alternative Renewable Energy Development Policy 2019, Wednesday said that the country has a potential of $40 billion investment in renewable energy.

The Alternative Renewable Energy Policy 2019, approved by the federal cabinet, will help the government to have 30 percent renewable energy in system by 2030 and combined with hydro power it will be 60 to 65 percent of the mix energy, Federal Minister for Energy Omar Ayub said while unveiling the renewable energy policy.

Flanked by Special Advisor to Prime Minister on Petroleum, the energy minister said that around 8,000MW cheap renewable clean and green energy will be added to the system by 2025 while it will be increased to 20,000MW by 2030.

He said that the previous government had commissioned expensive RLNG based electricity in the system which is costing around Rs 17.5 per unit which has resulted increased circular debt.

The minister said that there is potential of around $ 40 billion investment in the renewable energy sector alone. The investment has already started pouring as the government has signed agreements with 12 wind power companies for the generation of 600MW electricity which will bring $ 700 million investment, Omer Ayub said. Replying to a query that whether the 12 wind power companies were qualified through competitive bidding, the minister replied that those were the projects that were killed by the previous government but now have been revived on the directive of the Prime Minister.

The minister said that besides generation of renewable energy companies are interested in the manufacturing of solar panels and wind turbines in Pakistan. Danish, Chinese and Japanese companies have shown their interest in the manufacturing of wind and solar material in Pakistan, he informed.

He said that 80 percent feeders are loadshedding free in the country as with various measures an additional revenue of Rs 229 billion has been generated.

Talking about the salient feature of the new renewable policy, special advisor to Prime Minister on petroleum Nadeem Baber said that the rule of upfront tariff has been abolished. Now all the future tariffs will be on the basis of competitive bidding. The government will set the target every year and will invite biddings from the investors. He said that as per the target the share of renewable energy will be increased to 20 percent by 2025 and 30 percent by 2030. By 2025 the combined share of renewable and hydro will be 52 percent and by 2030 will reach to 63 percent of the energy mix, he added.

The current renewable policy is totally different from the previous one as earlier the investor used to choose the site, fuel and cost but “now we have changed it, Nadeem Baber said. Now the government will provide the site, type of energy and will award the contract to lowest bidders, he explained.

Secretary Power division said that the policy will be sent for the approval of the Council of Common Interests (CCI). He said that all the provinces have been given basic role and more say in the decision making regarding renewable energy projects.

Replying to a query of G to G agreements in the new policy, the secretary said that it is only for the under developed areas in Balochistan and Gilgit Baltistan while for the rest of the country it will be competitive policy.

To another query regarding payment to Turkish Company Karkey, the energy minister replied that no payment was made to the company.

Replying to another query regarding capacity payment to the wind and solar power companies, advisor on petroleum informed that there will be capacity payment in the new policy; the companies will get payment for the energy generation only.

Regarding the Neelum Jhelum Surcharge, Omer Ayub said that it will be abolished soon without giving any deadline.


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