Pakistan's first Solar Photovoltaic (PV) Power Plant is being planned by Wah Industries in its own premises, in a village called Sanjwal, some 100 kms west of Islamabad.

A tariff petition has been made with Nepra, which is the basis of most of the following discussion on the project.

It has been estimated that the sun radiates more energy in one hour than is consumed by the whole world in one full year.

It is often acknowledged that solar energy is the future.

That future is coming closer by the day.

It is being projected that sometime in 2020-25, solar electricity may be competing with conventional electricity in terms of cost and prices.

One USD per watt or even lower prices is the target of Western governments and companies, which in effect is being implemented by the Chinese companies with their ever-lower prices.

It augurs well that we are taking interest in this technology.

The National Institute of Silicon Technology (NIST) now named PCRET (Pakistan Council of Renewable Technologies) was founded more than three decades ago to learn and develop solar PV technology, particularly solar cells.

We started late for wind power and for various reasons are running after it and are offering unreasonably high tariffs to lure investment in the wind power sector.

The capacity of the proposed plant is 1 MW, although of any consequence in view of the huge gap and loadshedding, it is sufficient for introductory purposes.

Its high tariff may not significantly affect the average power tariff in the country.

The project cost is 337 million rupees amounting to 3.96 US dollars per watt, a bit on the higher side, if we keep in view the downward trend in prices of the PV systems.

The resulting cost of generating electricity (CoGE) would be US cents 26.62 (levellised, some kind of average) or 26.62 rupees per unit.

In Germany and Spain, the corresponding CoGE is around 40 cents.

But their solar resource (radiation intensity) is 50% that of Pakistan and its adjoining regions of Gujarat and Rajasthan in India.

In Gujarat, the new solar PV tariff is about 24 US cents.

In India, solar PV tariff was higher earlier, determined on cost-plus basis at IRs 17.44 per kWh.

Good for them that they invited competitive bids which offered more than 30% discounts on the announced reference tariff and offered around IRs 10 per unit which is about 24 cents the new proposed tariff in (Gujarat) India.

Solar-server, a veritable Website of the solar market, has reported a price of 1.74 USD per watt for crystalline solar cells originating from Germany and 1.28 USD per watt originating from China.

Balance of the system costs are generally 100%, and add another 10% margin for local costs, it comes to around 3.82 USD, close to 3.96 USD that the project proponents have asked for.

It appears that the Gujarat tariff of 24 cents is more appropriate for the region.

The differences are not as much as we find in Wind Power project, 50-100% higher than the norm in other countries.

The proponents have made an amazing concession, however.

They are entitled to 18% rate of return, but have voluntarily offered a much discounted rate of 10% only.

The reason offered is that otherwise with 18% RoR, the CoGE/tariff would have gone too high.

Obviously regional tariffs are known to the foreign partners, whoever they may be.

The proponents have in fact, lent support to the arguments this scribe has been making for quite some time now.

Renewable energy is capital intensive and the cost of renewable energy is very sensitive to financing cost and RoR to equity.

The excessive up-front tariff of 15 cents for wind has been due to high financing costs and over-booked capital costs.

Normal RoR on Equity in the power sector is around 10%.

India offers 14-15% RoR in local currency, although India has much more stable currency than Pakistan.

The 1 MW project will yield 1.6 GWh of electricity every year, which gives a capacity factor of 18%.

It has been assumed that the initial efficiency (availability) would be 85% which would degrade at a rate of 0.65% per year to a level of 69.4% in the 25th year.

Poly-Crystalline panels of 235 watts are planned to be installed, which would require 4,255 panels.

No trackers are provided, and apparently fixed optimum tilt would be utilized for mounting structure.

For maintenance and cost reasons, optimum fixed tilt is a good option for a location, which has a high solar availability and intensity.

Convenience and self-use may have been the location criteria, otherwise much better and solarly productive locations are available.

For the readers' information, the area between Quetta and Chaghi has the highest solar insulation numbers.

Generally and comparatively, almost the whole of Pakistan has good solar resources, more or less, especially for installing solar PV plants.

It is unfortunate, however, that the fertile and productive Punjab suffers from lack of adequate energy resources and in solar, as well, its rating is comparatively lower than other provinces like Sindh and Balochistan.

To date, some 64,000 MW of solar PV plant capacity have been installed globally, half of which is in rather cold Germany, and more than half of the world market of PV equipment is being supplied by China.

One MW utility plants are not a rarity, although solar PV plants today have reached a capacity level of 97 MW.

In our region, India has made significant strides in the sector.

Under the National Solar Mission, India plans to install 20,000 MW of solar power by 2020, which may still be 7-10% of India's demand.

However, solar power installed capacity by 2010 was only 10 MW, but another 100 MW projects are in the pipeline to be completed by end 2011.We may not be able to afford a lot of solar capacity before 2020, as the costs would still remain prohibitive by that time.

However, one would recommend 50-100 MW of Solar capacity by 2020 largely for the purpose of technology introduction, which should include some indigenization programme like Solar panels assembly.

To date, India has more than 20 solar PV production plants of various capacities and capabilities starting from Silicon to the panels.

Most of the production is exported.

In Pakistan also, solar manufacturing could be promoted for export purposes, although a modicum of demand has to initially come from the local market.

It would not be difficult to export several hundred megawatts of solar equipment per year, as the demand grows.

This would open a new sector for business and employment growth.

It is in this context that the local solar power plant capacities should be seen.

Ultimately, that is after 2020, the local demand may be quite large to generate reasonable manufacturing volumes.

Involvement of the Wah Industries is a good beginning.

They and other similar enterprises may be encouraged and facilitated to go into local manufacture as well.

The recommended 50-100 MW of solar capacity could be encouraged into the institutional sector, defences and education being the foremost.

In Punjab, a project has already been conceived whereby 3 MW of solar PV capacity would be installed in Bahawalpur in a university.

Countries major engineering universities must be obliged to go into it for their own use and export to the grid.

Also, all utilities and IPPs could be obliged to go into it by installing 1-5 MW of solar power.

It appears that our AEDB is not quite prepared and equipped to handle the solar projects.

They have a policy/guidelines and a lot of other data on wind power.

Naturally, they are on wind power for the last one-decade.

Solar power is now knocking at their doorsteps.

AEDB should develop specific guidelines for the solar sector, although there are many commonalities with the existing Wind Power guidelines.

Also some effort and investments should be spent on, measuring, collecting and organising the solar radiation and insulation data.

The PMD's collaboration may be sought towards collecting solar data.

They do collect solar data but with an orientation of weather forecasting and not for the solar power.

Most of us, who are in the solar business, rely on international websites and sources for the solar data of Pakistan.

Direct data collection and measurement has perhaps more credibility than the interpolations done in the international solar models.

Besides, it indicates that we are not terribly interested in solar energy.

Also, the erstwhile NIST and now PCRET should also start playing some role in the implementation of these projects by the way of human resource development, training, software and indigenization of the solar technology.

I would welcome the project and many citizens like me would do so.

Copyright Business Recorder, 2011

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