Quantum Leap in Wind Power in Asia

– Structured Consultation

Country Profile

Opportunities & Challenges to Scaling up

Wind Power in Pakistan

Presentation by

Mr. SAIF ULLAH Mr. ARIF ALLAUDIN

Joint Secretary (Power) Chief Executive Officer
Ministry of Water and Power Alternative Energy Development Board
Government of Pakistan

June 21 21--22
22,, 2010
ADBofHeadquarter
The views expressed in this presentation are those the presenter and Manila, Philippines
do not necessarily represent those of the Asian Development Bank.
 Presentation

• Pakistan Power Sector Overview

• Wind Resources in Pakistan
• RE Development Plan
• Institutional Framework
• Unique Features of the RE Policy
• Steps for the Development of Wind IPP
PAKISTAN POWER SECTOR
OVERVIEW
 PAKISTAN POWER SECTOR OVERVIEW

Public Sector
MW %
Public Sector Private Sector PEPCO (Thermal) 4,829 24
(Thermal) (Thermal)
4,829 MW 8,496 MW WAPDA (Hydel) 6,444 33
(24.0%) (41.6%)
NUCLEAR 462 2

Sub Total 11,735 59

Private Sector
MW %
Nuclear
IPPs (Thermal) 6,314 31
Public Sector 462 MW
(Hydel) (2.3%) KESC (Thermal) 1,756 9
6,444 MW Rental & SPP 426 1
(32.1%)
Sub Total 8,496 41
Optimum summer capacity 17,897MW
Optimum winter capacity 13,215MW Grand Total 20,231 100
 DEMAND & SUPPLY POSITION

20
18
-5022 MW
16
M W in T h o u s a n d

14
12
10
8
6 Demand
4 Supply
2
0
FY-02 FY-03 FY -04 FY-05 FY-06 FY-07 FY-08 FY-09 FY-10

5
 COUNTRY PEAK DEMAND & SUPPLY
FUTURE PROJECTIONS 2007–2030

120000
113695
100000
80566
90000
80000
54359
MW

60000 70000

36217
40000
24474 40000
18883
20000 27000

15500 19000
0
FY-07 FY-10 FY-15 FY-20 FY-25 FY-30
Year

MW Supply MW Demand
6
 ENERGY SUMMIT APRIL 2010

The Govt of Pakistan organized the Energy Summit in April

this year in order to built up major political consensus to
address the immediate issues of the energy sector.

First time ever a major nation wide energy conservation

and efficiency improvement campaign evolved.

This reflects the will of the nation to emerge out of the

energy crisis by adopting the best practices.
 CONSEVATION MEASURES ADOPTED
through Energy Summit April 2010
 Achievements:

Ut The unscheduled power outages reduced from 12 -16 hours a day
to 4 -6 hours and savings of about 2000 MW has been achieved.

Reduction of lights up to 50% in President, Prime Minister’s

Secretariats, Federal Ministers, Governors, Chief Ministers, all
Provincial Ministers and all Government Offices and induction of
energy savers.

Illumination of alternate street lights and non-supply of power to

billboards and neon signs.

Staggering of weekly holiday for Industry.

Closure of markets and shops at sun-set. During the day shops shall
be provided with at least two continuous spells of power supply.

Five day week for Government Departments and affiliated Institutions.

 CONSEVATION MEASURES ADOPTED
through Energy Summit April 2010

OTHER IMPORTANT DECISION

Inefficient irrigation/water supply motors and pumps to be

replaced by efficient equipment.

Only energy efficient appliances to be allowed to be manufactured

and imported in Pakistan.

Mandatory energy audit of industrial, commercial and public

concerns.

Energy Building Code shall be enforced immediately.

Setting up of Energy Development Fund (EDF) – PM already

announced Rs. 20 billion as seed money, which is reflected in the
budget. Donors being requested to supplement the fund.

Reallocation of 183 MMCFD Additional Gas to Power Sector.

Renewed focus on Renewable / Domestic generation resources

WIND RESOURCE IN PAKISTAN
Disputed Area
 WIND RESOURCE IN PAKISTAN

• Pakistan has a 1,046 Km

coastline in the South
• Average wind speed more
than 7.4 m/s in Gharo
Wind Corridor
• Estimated wind potential
more than 50,000 MW
• Other sites in Balochistan,
Punjab and Northern Areas
being identified
INSTITUTIONAL FRAMEWORK
 ALTERNATIVE ENERGY DEVELOPMENT
BOARD (AEDB)

• AEDB established as a one window facilitator in the areas of RE for the

Private Sector

• Mandated by the Government of Pakistan to:-

to:-
• Implement policies, programs and projects through private sector in
the field of Alternate Energy
• Assist and facilitate development and generation of Alternate
Energy to achieve sustainable economic growth
• Facilitate transfer of technology and develop indigenous
manufacturing base for RE Technology
• Facilitate power generation / provision of energy services using
Alternate energy resources

• 2010 AEDB act permits AEDB to undertake RE projects to lead and

prime the sector.
RE DEVELOPMENT PLAN
1st Phase Wind Power Program (Sindh Province)
MICRO SITING OF WIND FARMS IN JHIMPIR BY AEDB
 PAKISTAN’S RENEWABLE ENERGY POLICY

 Wind Risk taken by the Government

 Guaranteed Electricity purchase
 Grid provision is the responsibility of the purchaser
 Attractive cost of land for wind energy projects
 Standardized Project Documents (LOI, LOS, AI, EPA etc).
 Attractive Tariff (Return on investment 17% to 18%)
 No Import Duties on Equipment
 Zero Sales Tax
 No Income Tax / withholding tax
 Repatriation of Equity along with dividends freely allowed
 Permission to issue corporate registered bonds
 Easy Convertibility of PKR into USD
 Net Metering
 Banking of Electricity
 Wheeling Provisions
 Grid Spill Over Concept introduced
 Carbon Credits mainly to the investor
Key Steps Involved for setting up
a Wind Power Project in the
private Sector
 STEPS FOR WIND POWER PROJECTS

Letter Of Intent (AEDB)

Land Acquisition (AEDB or Private Land)

Feasibility Study (Approved By AEDB)

Generation Licence (NEPRA)

Tariff – On Cost Plus Basis – (By NEPRA)

Letter Of Support – (AEDB)

Energy Purchase Agreement – (AEDB/NTDC)

Implementation Agreement – (AEDB)

Financial Close

Implementation / Execution
 Wind Power Projects - (50 MW Each)
PROGRESS STAGE
S# IPP
Tariff Energy Purchase Cost
Feasibility Gen License
(c / kWh) Agreement (Million USD)

1 Zorlu Enerji p 12.10 p p 121.99

2 Green Power p 10.28 p p 108.80

3 Dawood Power p 11.87 p + 120.34

4 Beacon Energy p 12.50 + p 130.00

Fauji Fertilizer
5
Company p x + p 143.00

Arabian Sea Wind

6
Energy p x + x 142.23

7 New Park Energy p 9.50 P x +

8 Zephyr Power p + P x +
Sapphire Wind
9
Power Company p x x x +

10 Lucky Energy p x x x 132.35

 CURRENT STATUS OF WIND IPPs

First wind farm of commercial scale in country’s history

was established in Pakistan in 2009

Four IPPs – 50 MW each (200 MW) to achieve Financial

close in 2010.

Ten IPPs - 500 MW worth of Projects are expected to get

Financial Closure by end 2011.

Government to undertake 150 MW project in the next 2

years

Local Manufacturing being encouraged as a Government

Policy.
 GOVT OF PAKISTAN’S VISION ON
DEVELOPMENT OF RENEWABLE ENERGY

The Government of Pakistan is keen to develop Renewable Energy

(RE) on war footing:
• To address the issues of energy deficit
• To increase the share of RE in Energy Mix
• To develop indigenous resources and reduce dependency
on imported fuel

The RE target for Pakistan is 9700 MW by year 2030

Renewable Policy 2010 (expected July 2010) will provide additional

focus on local Manufacturing, of grid application and safeguards for
the private investors.

Pakistan seeks support from DFI’s, IFIs, and support to learn from
the success of other developing countries.
THANK YOU