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The power sector regulator, NEPRA, is set to conduct a hearing today for the country’s first hybrid renewable project, marking a critical milestone in Pakistan’s evolving energy landscape. The project aims to optimize resource utilization, enhance efficiency, and ultimately benefit the end consumer. It is part of K-Electric’s broader renewable ambitions—totaling 640 MW—which align with Pakistan’s target of doubling its renewable energy capacity by 2030.

Within this, the hearing for the 150 MW solar project in Winder and Bela, Balochistan, was held in December 2024, and a decision on it is still awaited. This was the first time competitive bidding took place for such projects, an unprecedented step for the sector—setting a new and refreshing benchmark in the power industry. Not only did K-Electric receive substantial bids, but the tariffs quoted were among the lowest in the country’s history. For instance, KE’s hybrid project achieved a record-low tariff of 3.09 cents/kWh through a fully transparent bidding mechanism, demonstrating the effectiveness of this approach.

Investment is set to flow in once the projects break ground. The project has already attracted approximately $200 million, primarily financed by foreign investors—a strong endorsement of their confidence in KE’s vision and, more broadly, in Pakistan’s economic potential.

This project is not just about clean energy; it aligns with K-Electric’s goal of integrating 30 percent renewables into its generation mix. The benefits are manifold, including reduced reliance on fossil fuels, lower import bills, and a much-needed shift toward sustainable energy—ultimately ensuring affordable electricity for all.

However, delays remain a significant risk. KE received the project’s bid by the end of August 2024, and the Bid Evaluation Report was submitted for approval in September 2024. Since then, KE and the lowest bidder have been awaiting the green light. The urgency cannot be overstated—since the procurement process follows strict guidelines, the Bid Bond validity is running out, and any further regulatory delays could jeopardize the investment.

The share of renewables remains very low in the southern region. According to NEPRA’s State of Industry Report 2023, only 12.5 percent of Sindh’s total power generation capacity of 16,940 MW comes from renewables. These projects are introducing much-needed green energy to Sindh’s power mix, which is currently dominated by fossil fuel-based generation at 14,821 MW. The share of renewables stands at just 2,119 MW—comprising wind (1,845 MW), solar (250 MW), and biogas (24 MW).

The good news is that progress is on the horizon. Germany is reportedly exploring a 350 MW wind and solar project in Sindh and is in discussions with the provincial energy department. However, given the delays in KE’s renewable initiatives, other investors may become skeptical. The power sector is already considered high-risk, with investments largely dominated by guaranteed-return Independent Power Producers (IPPs).

Pakistan urgently needs investment in renewables—and in a competitive framework. Increasing the share of renewables is crucial for diversifying the energy mix, reducing reliance on imported fuels, and ensuring the country’s energy independence, all while contributing to environmental sustainability

Pakistan has pledged to reduce projected emissions by 50 percent by 2030 under its Nationally Determined Contributions (NDCs), aiming for 60 percent of its electricity to come from renewables, a 30 percent transition to electric vehicles, and a complete ban on imported coal. Achieving these targets depends on fostering an investor-friendly climate and expediting project approvals.

Timely regulatory approvals are crucial—not just for attracting foreign capital but also for maintaining investor confidence and incentivizing long-term commitments.

Comments

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KU Feb 04, 2025 12:04pm
Countries round the world are using resources/climate to harvest hydro/solar/wind energy, while our piecemeal efforts on renewable energy faces policies/hurdles to make corrupt money. It's criminal.
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NAVEED Feb 04, 2025 07:48pm
The unit price should be made in pak rupees. It will give strength to rupee plus it will not put burden to the consumer bcz of fluctuation in cruncy value. Alhamdolilah
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