Mega solar or small

The central focus of the National Solar Energy Initiative appears to be the early start of mega projects

Dr Pervez Tahir September 09, 2022
The writer is a senior political economist based in Islamabad. He can be reached at [email protected]

Among the earliest policy intents expressed by Prime Minister Shehbaz Sharif, solarisation had a special place. It all started with a meeting with the Chinese who were invited to invest in solar projects. There was also the review of the renewable projects cleared during the PML-N period but not implemented by the PTI government. Initially, the news came out that the new policy would target an addition of 14,000 MW of solar power. The new national solar policy was to be announced on August 1. A realistic assessment by the taskforce set up for the purpose seems to have scaled down the target, with the Prime Minister tweeting on September 1 that a pre-bid conference of stakeholders would be held this week to deliberate on the generation of 10,000 MW.

While there are plans to solarise diesel based tube wells and government buildings, the central focus of the National Solar Energy Initiative appears to be the early start of mega projects. There are several unresolved issues here. First, the objective is to replace the costly imports of fossil fuels with cheaper solar power. This will add to capacity which, according to some, is already in excess and there are huge costs for not utilising it. Secondly, the output of the new solar projects is expected to use the existing transmission system that is known for its high level of wastage. Thirdly, due to our well-known inability to negotiate foreign deals in our interest and the weaknesses of the legal system, the private investment in solar power poses dangers similar to the IPPs. Finally, the critical macroeconomic situation dictates against the PSDP funding.

Governments in Pakistan, especially of PML-N, prefer mega projects for their visibility. The future is solar, but rushing into mega projects may create more problems than it will solve. There is, however, every reason to rush into demand creation rather than adding to supply. With less than respectable access to electricity, going small will add more value. Solarising tube wells and agricultural implements is already there in the new policy. Off-grid rural households and public services in rural areas offer great potential. All new house construction and commercial places in urban areas should be mandated to solarise. As the initial cost of solarisation is lumpy, the need is to work out an incentives framework. At present, most solar equipment is imported. The little that is produced domestically is of poor quality. Even the imports, largely from China, are not of great quality.

For years, this writer has advocated the establishment of an R&D facility, with the objective to create and design high quality solar equipment locally. As there is no better use of public investment than innovation and replication, the facility should have no funding constraint. It should be modelled after the Kahuta project, with the same professional zeal to succeed, come what may. Perhaps the Pakistan Atomic Energy Commission and the other nuclear labs can put together a team motivated to launch Pakistan brand in the highly competitive world market. The prototypes produced by the facility should be offered to the private sector to scale up. In the meantime, the demand creation has to be encouraged by a liberal regime for imports and local taxes, besides concessional credit. The present energy mix shows only one per cent contribution from the solar generation. As solar supply is not continuous, other sources cannot be completely eliminated. It can, however, be the predominant source and a great leap forward to ensuring affordable, cleaner and sustainable supply. Let the sun shine on the economy.

Published in The Express Tribune, September 9th, 2022.

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