Are Chinese solar panels the answer for Global South, or do costs not add up?
The rise of decentralised solar power has prompted a Pakistani think tank to call for China to play a leading role in Pakistan's energy transition, creating a model for other countries in the Global South. However, a Chinese energy scholar has questioned whether its vision is too expensive to be true.
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An increasing flow of cheap Chinese solar panels to the South Asian nation is undercutting demand for power from coal-fired plants that China helped finance and leading to a vicious cycle of stranded assets, according to a report by Renewables First, a think tank based in the Pakistani capital, Islamabad.
'China's solar panels are outcompeting China's power plants,' said Muhammad Basit Ghauri, lead author of the report. 'What we are seeing is an unintentional but profound strategic contradiction. And Pakistan is ground zero for this global experiment in energy disruption.'
Pakistan had witnessed a rapid transition to 'distributed' solar power generation on people's rooftops over the past five years, with 39 gigawatts of solar panels imported over that time, mostly from China, the report said, adding that was roughly the equivalent of three-quarters of Pakistan's total installed power generation capacity.
With a zero tax rate for solar power imports, Pakistan has emerged as the second-largest destination for Chinese solar panels, behind only Brazil.
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According to data from the Pakistani government's Finance Division, thermal power generation accounted for 59.4 per cent of the country's installed capacity at the end of March last year, followed by hydroelectricity on 25.4 per cent, nuclear on 8.4 per cent and renewables on 6.8 per cent.
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