But the Pakistan’s coastal belt holds particular promise for wind energy, with a potential of producing 50,000 megawatts, according to the US National Renewable Energy Laboratory.
Arif Alauddin, chief executive of Alternative Energy Development Board (AEDB), on Friday said talks were underway with six Pakistani investors to build wind farms.
"We have reached a stage I can say at least four deals will be finalised this year and production would start next year," he told. "The worth of these deals will be $500 million." They would encompass four 50 MW wind turbines plants with expected completion by the end of 2011, he said.
AEDB is trying to boost local private investment in alternative energy by offering incentives and access to wind turbines makers and operators such as Siemens, Nordex, Goolwind, SWEG and General Electric. Nordex in March agreed to supply FCC Energy Ltd., a local company, with turbines for a 50 MW wind farm in the southern Sindh.
To attract private investors, Alauddin said the government is guaranteeing an annual rate of return of up to 18 percent and will pay power producers if the wind blows below an annual average of 7.3 metres per second.
AEDB has already allocated land for 18 independent power producers for wind power projects of 50 MW each. The US Agency for International Development has plans to help Pakistan develop wind farms to generate 300 MW by the end of 2014.
"You cannot expect changes overnight. It’ll take time. But we believe some 10,000 MW would be coming through wind energy in the next five to 10 years," Alauddin said.
AEDB is carrying out national wind mapping for possible farms in other locations such as Balochistan and Khyber-Pakhtunkhwa. Pakistan is also looking at solar energy as another renewable option, and the central bank is offering to finance 80 percent of local solar investments. The government has removed duty and sales taxes on solar technology imports.
Sixty-five percent of cash-strapped Pakistan’s electricity comes from oil and gas and 30 percent from hydroelectric sources. An additional 5 percent comes from two nuclear plants.
Out of total imports of $31.48 billion in the last 10 months, oil imports were $8.3 billion, government figures show. "We’ve got to turn around our energy mix. We cannot afford it," said Mohammad Khaid, director general of the state-run Pakistan Electric and Power Company (PEPCO).