In India, the Wind Farm Capacity is over 13,000 MW (annual growth rate of 56pc) while, in China more than 50,000MW. Pakistan in naturally gifted for wind power projects as Jhimpir-Gharo Wind Corridor has capacity for over 30,000 MW and falls under wind zone with high average wind speed availability. This has been assessed and proved by UNDP, AEDB and other private studies.
The government has already announced special incentives for fast track renewable energy projects including wind power projects which were earlier facing inordinate delays since 2006 due to various bureaucratic snags. Thermal power projects favoured by NEPRA & PPIB in tariffs and approvals have high fuel, inventory and O&M costs with ever-increasing oil import bill, negatively affecting trade balance and rupee value and have severe environmental effects.
On the other hand wind power has no fuel requirement and has no environmental impact but is overlooked for mysterious reasons. To speed up wind power projects GOP recently allotted land to reputed corporate groups for faster implementation of wind farm projects and big names like Sapphire, Lucky, Fauji Foundation, Tapal, Fauji Fertilizer, Green, Master, Sachal. Tenaga, Al-Abbas, CWEC China, Green power, Zephyr, Beacon, Gul Ahmad and Habib have initiated wind energy projects with a total capacity size of 800 MW, potentially needing an investment of $2.0 billion. One wind farm, being developed by Fauji Fertilizer has recently achieved financial close.
However as our bureaucracy historically spoils projects of national interest, recently NEPRA issued a notice of hearing for development and determination of upfront Wind energy projects tariffs. Unfortunately, the terms of the upfront tariff are so much worse than the recently closed Fauji Wind Project that it looks like an effort to slow down projects rather than speed them up.
This recent misadventure by NEPRA, if approved, will kill investor’s interests in wind energy projects just for the sake of favouritism and several investors till recently buoyed up in this sector will simply lose the investments already made. Concurrently, if Wind Power Projects are replaced with High Tariff Thermal Power projects, one could see massive impact on macro economics, inflation and rupee value. This exercise to please a few people, oil marketing companies and vested interests will have long lasting impact on Pakistan Energy Scenario and its sustainability. GOP & President Asif Ali Zardari should take immediate steps in this regard to restore investor’s confidence and ask NEPRA to stop taking anti-investment steps.