Renewable energy targets demand $100b investment

Express Tribune

29-01-2025

ISLAMABAD:
Pakistan needed over $100 billion investment to shift its policy towards renewables to achieving a carbon neutral energy sector, climate ministry officials informed the Senate Standing Committee on Wednesday.
They said that the country required $50 billion to achieve 60% renewable energy target by 2030, more investment to reduce emissions by 50%, besides $18 billion to fully operationalise the National Energy Efficiency and Conservation Authority (NEECA) Plan-2023-30.
The committee met here with its chairperson Sherry Rehman in the chair. The meeting was informed that support from the Global Environmental Facility (GEF) and the Green Climate Fund (GCF) would play a crucial role in implementing the plans and achieving climate targets.
The committee received a briefing from industries and production ministry officials on the electric vehicle (EV) policy. The officials said that he prime minister had formed a steering committee on the EV policy.
During the meeting, the climate change secretary said that introducing EVs in public transport was crucial to reduce carbon emissions. He stated that transport had the greatest impact on air quality, adding that a proposal to subsidise two- and three-wheelers was currently under consideration.
However, the chair noted that pollution from other sources was spreading more than vehicular emissions. She also criticised the industries ministry officials for lack of preparedness. "It is regrettable that the officials do not even know the exact number of local EV manufacturers," she said.
Rehman asked the officials as to how they planned to operate EVs without a clear strategy. She emphasised that the government could not halt solarisation by modifying net metering regulations. She urged the climate change ministry to oppose any policies that discouraged solar energy.
Energy Minister Awais Leghari told the committee that a solar revolution was already under way in the country. He reminded the committee that he had introduced net metering regulations in 2017 and assured that there was no plan to discourage solarisation.
Leghari stated that solar investments were currently recovered within 18 months, but under the new regulations, this period would extend to four years. He noted that solar system owners were selling electricity at Rs22 per unit. However, he highlighted that the government was buying electricity from solar producers at high costs and selling it to the consumers at lower rates.
Senator Zarqa Taimur urged the government to reduce transmission losses and emphasised that agreements under net metering should remain unchanged. Leghari warned that if the new regulations were not enforced, other consumers would bear an additional burden of Rs103 billion.
Leghari revealed that the government had exited the business of direct purchase of electricity from the producers. He also disclosed that the plans were in hand to divide the National Transmission and Dispatch Company (NTDC) into three entities.
The energy minister confirmed that talks with the International Monetary Fund (IMF) were under way for a three-year energy package, and assured that the government had plans to allocate electricity to industries at affordable rates.
Leghari acknowledged that previous power plants were installed under various policies but under a new system, future power plants would be installed through a competitive bidding process. He emphasised the need for green finance to support the transition.
According to Leghari, 2,500MW of thermal power plants had already been retired, and the government was actively working to accelerate the shift towards green energy. He added that the government was working to retire 200MW furnace-based power plants which required green financing.
Leghari underscored the importance of attracting investment to successfully implement the EV policy. He argued that more charging stations would encourage the adoption of the EVs. "With more charging stations, people will be more inclined to switch to electric vehicles," he stated.
The climate change secretary told the committee that the State Bank of Pakistan (SBP) was actively working on financing green energy projects. However, Rehman criticised a slow progress. "Even after five years, the authorities are still saying that the State Bank is working on it," she said.
Senator Sherry Rehman called for availability of loans to the consumers for transitioning to EVs. The climate change ministry officials confirmed that the federal government had introduced a special tariff for the EVs charging stations.