Omar shares strategy to produce 75% of energy through indigenous resources

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ISLAMABAD, August 12 (APP): Minister for Power and Petroleum Omar Ayub Khan on Wednesday unveiled the salient features of Alternative Energy Policy-2019, under which 75 percent of the country’s total electricity would be produced through indigenous resources by 2030.

“We have the target to produce 20 percent of the country’s total electricity through renewable means, including solar, wind and geothermal, by 2025 that will be taken to 30 percent by 2030. While, 75 percent of the total energy-mix needs to be fulfilled through indigenous resources by 2030, “he said.

He was addressing a news conference flanked by Minister for Science and Technology Chaudhry Fawad Hussain, Special Assistant to Prime Minister (SAPM) on Petroleum Nadeem Babar, SAPM on Power Shahzad Qasim and Secretary Power Omer Rasul.

Omar Ayub said the Council of Common Interests (CCI) had recently approved the new policy with consensus to make the country self-sufficient in energy sector.

Under the policy, he said competitive bidding would conduct to bring down the electricity rates.”The solar energy projects that have been initiated during our tenure have brought down the rate even from four cents per unit,” he added.

The minister said availability of inexpensive electricity would benefit industry and domestic consumers, besides creating more job opportunities.

He said Pakistan was also focusing on local manufacturing of the equipment like solar panels and wind turbines used in renewable energy production.

Elaborating the new Alternative Energy Policy, Special Assistant to the Prime Minister (SAPM) on Petroleum Nadeem Babar said it was for the first time that each and everything would be acquired through open and international bidding to ensure transparency.

“In all previous polices, someone carried upfront tariff and someone cost-plus. But this time, the fundamental pillar of the policy is that there will be open bidding and lowest cost bidder will win,” he said.

Another uniqueness of this new policy, he said, was that location for installation of new power plant would be determined in consultation with all four provinces including Azad Jammu and Kashmir and Gilgit-Baltistan.

He said a steering committee had been formed by the Alternative Energy Development Board (AEDB), where provinces would themselves decide about distribution of renewable energy.

The SAPM said dollar devaluation would be kept in view while floating tenders, adding those who would be bidding in rupees considered “low cost” and the bidding in linked with dollar rate would be taken as “high cost.”

“Major factor behind the surge in electricity price during the last five-ten years, is the exchange rate improvement,” he added.

Nadeem Babar said another salient feature of the new policy was that Pakistan would bring in the technology, for which incentives had been given to produce renewable energy equipment.

Although, he said, initially renewable energy panels were being imported, but “We want to locally produce solar panels and wind turbines.”

The SAPM said three major Chinese companies and one European firm had already contacted Pakistan and expressed desire to start production of solar panels and wind turbines here.

“This policy contains a complete mechanism to initially import the equipment and gradually set up plants for manufacturing the equipment.” he added.

Nadeem Babar said a major shift in the new policy was that there would be auction every year, keeping in view new two-three years electricity requirement.

He said it would help boost confidence of international investors that there would be opportunity every year in Pakistan’s energy market.

The SAPM said this policy touched each and every renewable source, whether it was currently available with Pakistan or not.

He said a separate policy was being finalized for the hydel energy after amending the existing one in coming months, which would be covering solar, wind, waste to energy, geothermal, hybrid, tidal, battery storage, biogas and agricultural waste.

“We are working on development of technology and transfer of technology. All imported equipment in that regard will be free of custom-duty and taxation. Cost of electricity generation will be income-tax free. There will be only withholding tax,” he said.

He said there would be no fixed-capacity payment, adding payments would be made against only the produced electricity, contrary to the previous policy under which fixed payment was made, even if the plant operated for few months.

Answering a question, the SAPM said there was a $ 3.5 billion facility on account of oil supply on deferred payment from Saudi Arabia. “We utilized the facility as per our requirement. We did not utilize the complete facility of $ 3.5 billion,” he added.

He said a request had been forwarded to extend the facility with upward or downward adjustment. “It is a normal process.” Chaudhry Fawad said Pakistan, Saudi Arabia and United Arab Emirates were enjoying close and cordial relations.

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