A Renewable Future for Pakistan

Pakistan recently submitted its revised Nationally Determined Contributions (NDCs) to the United Nations Framework Convention on Climate Change (UNFCCC). NDCs are at the heart of the Paris Climate agreement and contain ambitious targets set by countries for themselves for successive periods of 5 years. The purpose of these targets is to reduce national emissions and adapt to climate change in a progressive manner. While the revised NDCs of Pakistan this year outline quite a few of them, a closer look lays bare some glaring issues.

First, the document describes a target for 60% share of renewables in Pakistan’s power mix by 2030. This ambitious figure has in fact only recently been devised in the June 2021 Council of Common Interests meeting by redefining what constitutes as ‘renewable energy’. The already existent 30% share of large hydro has been included in the scope of renewables and the previously defined target of 30% variable solar and wind in national mix by 2030 as per the Alternative & Renewable Energy (ARE) policy 2019, has been added on to it. However, what makes this bundling problematic is that in the recently approved Indicative Generation Capacity Expansion Plan (IGCEP) 2021-30, by declaring large shares of new thermal and hydro projects as committed in the overall planned expansion, it has become impossible for variable solar and wind to go beyond 19% (11,798 MW out of total planned 61,112 MW) by 2030, even in the best-case scenario. Not only do the NDCs fail to note this on-ground situation with clarity, but they also neglect any consideration of the challenges associated with large hydro.

Secondly, the document points out that “from 2020, new coal power plants are subject to a moratorium, and no generation of power through imported coal shall be allowed.” While it is true that the Prime Minister announced a moratorium on coal power plants last year, the reality is quite different. IGCEP 2021-30, which is the planning document responsible for Pakistan’s energy capacity expansion for the next ten years, has no such agenda. Five new coal power plants (2970 MW in total) are expected to come on-line in the next 2 years and two new imported coal power plants, Jamshoro Coal Unit-I of 660 MW & Gwadar plant of 300 MW, are to be commissioned by 2022 and 2023 respectively. As confirmed by IGCEP, by 2030 imported coal will have a capacity of 4920 MW and generation of 18,448 GWh in the nation’s electric grid, making it the 4th largest source of electricity. Thus, the NDCs and the IGCEP are clearly at odds with each other and show the huge disconnect between different policy making institutions of the country.

Third, the NDCs mention plans for liquefaction (CTL) and gasification (CTG) of indigenous coal. These technologies have potential concerns which must be studied. Coal liquefaction or gasification is highly water intensive which can be a serious concern in a water scarce region like Thar, where most of the coal is located. A Swedish study[1] highlights three further risks associated with CTL technology. First, it may result in increased GHG emissions due to high amounts of coal required for small amounts of liquid. Second, it brings with it high and often uncertain capital costs which can have economic implications and increase levelized fuel costs. Third, negative externalities such as water contamination can occur in local water sources. All these risks must be studied carefully before inclusion into the NDCs, and specially before launching any mega-scale initiatives for liquefaction and gasification of the country’s massive coal reserves.

On a positive note, there is one project in the NDCs which makes the country stand out as a global leader: the Ten Billion Tree Tsunami Program (TBTTP). This massive afforestation program is the largest ever in the country’s history and one of the most ambitious ones globally. The TBTTP has already finished planting its billionth tree in 2021 and is expected to sequester over 84 Mega tonnes of CO2e overall in the next ten years. Unfortunately, while such nature-based initiatives set Pakistan far ahead of its peers, lacking a firm stance against coal brings it back again, proving detrimental to its climate leadership.

Coal has become an increasingly unattractive option for energy generation over the past years. Renewable energy tariffs have seen sharp drops around the world with tariffs going as low as US 3.5 cents per unit in India and Pakistan.[2],[3] Centralized electricity generation models are becoming outdated as the future moves towards distributed and local fulfillment of energy demand. Net metering has seen an unprecedented growth with more than 5000 licenses granted by NEPRA so far. Renewable & distributed energy generation not only ensures energy security, but it also contributes towards development of remote areas where these sources are generally in abundance. But despite such competitive advantages the current share of solar and wind in Pakistan’s national grid remains a meager 5%.

Recognizing the importance of a shift away from coal, many lending bodies including banks and sovereign governments, historically responsible for coal financing worldwide, have announced commitments to stop funding coal development overseas. The latest on this list is China, with Xi-Jinping declaring an end to Chinese financing of overseas coal development at the recent UNGA summit. China’s patronage has been instrumental for the initiation of Pakistan’s coal mining and exploration program, enabling the country to utilize its domestic coal for power generation. Pakistan’s future plans for coal gasification and liquefaction also hinge on Chinese financing and technology. China’s exit from the global coal financing stage may very well jeopardize these plans. Pakistan needs to prepare itself in light of these changing dynamics.

A good starting point would be to carry out studies on potential economic and environmental costs associated with delaying the integration of variable solar and wind in the country’s grid in favor of coal power. A coal phase-out plan and roadmap, in addition to being a part of NDCs, should also be high on Pakistan’s COP26 agenda. In absence of such an active stance, large demands for aid like the $101 billion dollars quoted in NDC documents are not likely to receive a serious response from the international community. Moreover, investing in coal at this stage is the equivalent of inviting stranded assets in the near future. Although all western countries have built their economies around coal in the past, it is no longer a viable path. Combined with investments in nature-based solutions like tree plantation, a firm approach to phasing out coal can cement Pakistan’s position as the regional leader for climate action in Asia.

In addition to the above, Pakistan should also prepare a long-term energy plan with the goal of 100% renewable energy. Under such a scenario of macro level VRE integration, hydropower will also play a role, in particular as a flexibility and balancing option. However, the main share of the country’s energy, in this case, will still come from domestic solar and wind. Planning for such a positive scenario beforehand will not only give guidance to the players involved in the energy sector but would also contribute to strengthening Pakistan’s economic, social and environmental resilience.

Author: Ammar Qaseem is a Research Associate (Pakistan) at the World Wind Energy Association. He can be reached at ammarqaseem@gmail.com

[1] Mikael, Hook. (2014). ‘Hydrocarbon liquefaction: viability as a peak oil mitigation strategy’. Uppsala University Publications. http://uu.diva-portal.org/smash/record.jsf?pid=diva2%3A670680&dswid=2048
[2] Revised Indicative Generation Capacity Expansion Plan, 2021-30. National Electric Power Regulatory Authority.
[3] Jai, Shreya. (2020, Nov 25). ‘Solar power tariff touches record low of Rs 2 per unit in SECI auction’. https://www.business-standard.com/article/economy-policy/solar-power-tariff-touches-record-low-of-rs-2-unit-in-seci-auction-120112400221_1.html