Sustainable Development Policy Institute, an influential development policy advocacy organisation, revealed that Pakistan could save Rs200 billion annually, or a total of $5 billion, by diverting Chinese investments in energy sector under the CPEC portfolio to clean energy resources including wind and solar power.
A recent report of SDPI, presented by Dr Hina Aslam at a webinar on Thursday, states that China intended to invest up to $34 billion in energy sector in Pakistan. China has identified 16 priority projects worth $21.4b to generate 10,400MWs of electricity, of which 8 projects worth $12.9b are being actively pursued currently to develop over 6,600MWs of power, it said.
The report appreciated Chinese investment in coal-based power plants. It said that these power plants will ensure Pakistan’s energy security for being the most cost-effective as compared to other thermal energy sources.
However, wind and solar power are even cheaper and sustainable and there is a need of diverting future Chinese investment to these resources, the report said. The report points out that solar and wind power plants don’t involve capacity payment issues, hence these were more viable than other energy resources for both investors and the government of Pakistan.
The report mentions a government’s policy of 2019, which envisages increasing solar and wind power share in Pakistan’s total energy mix to 30%, thus providing for greater opportunities of investment in the sector.
The report also mentions that solar and wind power generation costs are also declining rapidly, making these sectors more attractive for investment. The cost of wind power has gone down from $101-$169 per MWh in 2009 to $26-$54 per MWh in 2020. Similarly, the cost of solar power generation has decreased from $323-$395 per MWh to $31-$42 per MWh during the same period, the report states.
Shandana Gulzar, a legislator from the ruling party, PTI, said that the current government had prioritised the renewable energy sector.
Dr Sajid Javed said that Chinese investment in renewable energy will ensure Pakistan’s ‘green recovery’ from the impact of COVID-19.
Source: China Economic Net