Engro 49.5MW Wind Energy Plant at Gharo

This week we went to visit Tenaga Wind Farm in Gharo being commissioned by Engro Pakistan. The project has a total capacity of producing 49.5 MW of electrical energy from 31 turbines rated at 1.6 MW each (one turbine out of the 31 produces 1.5 MW). The total cost of the project is $120 m and it is expected that this investment would be recovered in 5-6 years. The cost of a unit (kwhr) is going to Rs.15 as agreed with the Government of Pakistan.

The total energy produced annually would be 134 GWh which can be used to calculate the average power produced by the 31 wind turbines.

Power = Energy/Time = (134,000,000 kwhr)/(365 x 24 hours) = 15296 kW = 15.3 MW

That is the project would produce on average only 30.9 % (15.3 / 49.5) of its rated capacity. Furthermore the electrical energy needs to be converted to a level suitable to be supplied to the national grid. For this the electrical energy is converted from 690 Volts AC to 33,000 Volts AC. Lastly the project would be monitored and maintained by General Electric (GE) for two years as this is part of the turbine purchase contract. Three such projects are at various stages of installation in Gharo and seven such projects  are being undertaken in Jhimpir which is the preferred wind corridor in Sind due to quality/firmness of the soil there.

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First Solar Likely to Invest in Pakistan

First Solar, America's Solar giant is poised to invest in Pakistan's Alternate Energy sector after starting a 45 MW Solar project in Indian state of Telangana. First Solar has a worldwide installed capacity of 8 GW and was ranked no. 1 in Forbes list of 25 fastest growing technology companies in USA. The 45 MW project to be launched in Telangana will be operational by May of 2015 and would sell electricity at a rate of $0.106/kWh. India currently has an installed Solar capacity of 2900 MW which will be ramped up to 9000 MW by 2017.

According to some estimates Pakistan is facing an energy shortfall of around 4600 MW and government is quite keen to start new projects, be it Solar, Hydel or Thermal. Pakistan has set a target of 5% of energy to be generated from Alternate Energies by 2030. This is quite a conservative target and might actually be achieved before 2030, especially with the new initiatives such as the 1000 MW Quaid-e-Azam Solar Park to be operational by end 0f 2016. It is hoped that with a stable government and sustained policies in the coming years the Solar Energy sector would prosper and Pakistan would achieve its targets much before 2030.

Solar Park

Solar Park

Government Imposes 32.5% Tax on Solar

According to Finance Act 2014, the federal government has amended SRO 575 2006-07 and imposed a tax of 32.5% on import of Solar Panels. It must be noted that Solar Panels were placed in a special category with no tax since 2006. This was done to encourage the adoption of this Alternate Energy in the country. The government instead of taking steps to promote Solar Energy has taken the worst possible decision, at a time when the country is facing an acute energy crisis. The only possible explanation for this action is that the government intends to encourage local production of Solar Panels, which at the moment is minimal. What is troubling is that the Alternate Energy Development Board (AEDB) which is tasked with increasing the Alternate Energy contribution in the country to about 5% by 2030 was not even consulted.

Solar Panel

The breakdown of the imposed tax is as follows.

General Sales Tax 17%

Import Duty 5%

Commercial Importer 3%

Income Tax on the Import 5.5%

Hardest hit are the importers who had imported Solar Panels in bulk and now have to pay taxes amounting in millions of rupees (5-6 million per container). According to sources there are about 60 to 70 containers at the port which are waiting for clearance by customs. Also suffering are Solar solution providers who do not have enough equipment now to fulfill their commitments. It must be noted that energy demand reaches its peak in summer months and this is the time when Solar businesses make their profits. Also to be hit is the agriculture sector where Solar Pumps have become quite popular in recent times.

The government has recently shown considerable interest in Solar technology with the launch of Quaid-e-Azam Solar Park in Bahawalpur. Previously, the Gillani government had also taken some steps to promote Alternate Energies in the country, such as starting Wind Energy projects in Jhimpir. It is hoped that better sense would prevail and the government would revisit the Fiance Act 2014 which has created this mess!

Note: Since this article was published on July 29, 2014 there has been another article that totally refutes the imposition of any additional taxes on solar equipment. According to this article titled Demystifying the Tax on Solar Panels "if an importer verified the import (through the Engineering Development Board) as a unique product not manufactured or available in Pakistan, the importer would not have to pay custom tax". The news item about imposition of tax may have been untrue but it did have some effect as the 60-70 containers stuck at Karachi were immediately released.

Alternate Energy Development Board (AEDB)

Alternate Energy Development Board is a Government of Pakistan controlled institution that is tasked with increasing the alternate energy contribution of the country to about 5% by 2030. According to the AEDB Act of 25th May 2010 following are the functions of the AEDB Board.

(a) To develop national strategy, policies and plans for utilization of alternate and renewable energy resources to achieve the targets approved by the Federal Government in consultation with the Board.

(b) To act as a forum for evaluating, monitoring and certification of alternate or renewable energy projects and products.

(c) To act as a coordinating agency for commercial application of alternate or renewable energy.

(d) To facilitate energy generation through alternate or renewable energy resources by:

(i) Acting as a one window facility for establishing, promoting and facilitating alternate or renewable energy projects based on wind, solar, micro-hydel, fuel cells, tidal, ocean, biogas, biomass etc.

(ii) Setting up alternate and renewable energy projects on it's own or through joint ventures or partnership with public or private entities in order to create awareness and motivation of the need to take such initiatives for the benefit of general public as well as by evaluating concept notes and technologies from technical and financial perspective.

(iii) Conducting feasibility studies and surveys to identify opportunities for power generation and other applications through alternate and renewable energy resources.

(iv) Undertaking technical, financial and economic evaluation of the alternate and renewable energy proposals as well as providing assistance in filing of required licensing applications and tariff petitions to NEPRA established under the Regulation of Generation Transmission and Distribution of Electric Power Act, 1997.

(v) Interacting and coordinating with national and international agencies for promotion and development of alternate energy.

(vi) Assisting the development and implementation of plans with concerned authorities and provincial governments and special areas for off grid electrification of rural areas.

(vii) Making legislative proposals to enforce use and installation of equipment utilizing renewable energy.

Pakistan Council of Renewable Energy Technologies (PCRET)

Pakistan did realize the potential of Alternate Energies quite early and National Institute of Silicon Technology (NIST) was formed in 1981 to conduct research in the area of Solar Energy. Later on Pakistan Council for Appropriate Technology (PCAT) was formed in 1985. These two organizations were merged together under the umbrella of Pakistan Council of Renewable Energy Technologies (PCRET) in 2001. The government of Pakistan also formed the Alternate Energy Development Board (AEDB) in 2003. Although these organizations have been working in the Alternate Energy sector for more than 30 years but there are not many achievements to be proud of. Some pilot projects have been initiated by PCRET and AEDB in remote parts of the country but there is no holistic approach to overcome the energy crisis besetting the country (one interesting initiative that has been taken by the Government of Pakistan in recent times is the Quaid-e-Azam Solar Park in Bahawalpur).

One interesting initiative undertaken by PCRET is indigenous development of 3rd Generation Solar Cells using Nanotechnology. However,the Solar Cells developed using this technique have very low efficiency (around 1%) as compared to international standards (around 10%). Nonetheless, this is an important step towards indigenous development and it is hoped that the efficiency of these Solar Cells can be improved with time so that they are of some practical use. Some of the products developed by PCRET in the area of Solar Thermal are Solar Desalination Plant, Solar Water Heater, Solar Cooker and Dehydrator.

As per PCRET website the total installed capacities of various Alternate Energy technologies in Pakistan are:

1. Installed 538 Microhydel Power Plants  (5-50 KW capacity) with total capacity of 7.8 MW, 70,000 houses electrified.

2. Installed 155 small wind turbines (0.5 KW to 10 KW) with total capacity of 161 KW in Sindh and Balochistan, electrifying 1560 houses and 9-coast guard check posts.

3. Installed 300 Solar PV systems with total capacity of 100 KW electrifying 500 houses, mosques, schools and street lights.

4. Installed 4000 Biogas Plants (size 3&5M3/day, producing 18000 M3/day).

5. Developed 6-models of efficient smokeless cook stoves for cooking and space heating.

6. 100,000 mud stoves have been built in rural houses; saving 36500 tons of fuel wood per year.

7. Installed 21 solar dryers with total capacity of processing 5230 Kg of fruit per day.

Wind Power - Indigenous Development Opportunities

Pakistan is blessed with solar and wind energy. We have discussed solar in our previous articles, now let us have a look at wind map of Pakistan. It can be seen from the figure below that unlike solar which is available in most parts of the country wind power is available in only limited corridors along the coast and some northern parts of the country. It is well known that a wind speed of at least 12 miles per hour (5.4 meters per second) is required for the wind turbine to work. If we look at the major cities we can say that wind power is available in the cities of Karachi,  Hyderabad, Quetta and Islamabad.

Wind Map of Pakistan

Wind Map of Pakistan

Like solar, wind projects also require a large initial investment. Wind power projects can be divided into two main categories namely on-shore and off-shore. The typical cost for these projects in the developed world, is analyzed by IRENA in a study conducted in 2012. It can be deduced from this study that for on-shore projects the cost is $1.7-$2.45 per Watt. This can be compared to price of solar for Quaid-e-Azam Solar Park Bahawalpur which is around $1.31 per Watt.  Off-shore projects require even higher initial investment, with price per Watt ranging from $3.3 to $5.0.

If we look closely at the costs for an on-shore project we see that 64% of the cost goes into the construction of wind turbines. Within this category the major cost is associated with the rotor blades and tower. These two components of the wind turbine account for more than 30% of the total cost. Other major contributor to the total cost is the foundation which accounts for 16% of the total cost. For off-shore projects the rotor blades and tower contribute about 50% to the total cost.

Wind Power Cost

Wind Power Cost

A description of the main components of the Wind Turbine is given below (reproduced from IRENE document).

Tower: These are most commonly tapered, tubular steel towers. However, concrete towers, concrete bases with steel upper sections and lattice towers are also used. Tower heights tend to be very site-specific and depend on rotor diameter and the wind speed conditions of the site. Ladders, and frequently elevators in today’s larger turbines, inside the towers allow access for service personnel to the nacelle. As tower height increases, diameter at the base also increases.

Blades: Modern turbines typically use three blades, although other configurations are possible. Turbine blades are typically manufactured from fibreglassreinforced polyester or epoxy resin. However, new materials, such as carbon fibre, are being introduced to provide the high strength-to-weight ratio needed for the ever larger wind turbine blades being developed. It is also possible to manufacture the blades from laminated wood, although this will restrict the size.

Generator: The generator is housed in the nacelle and converts the mechanical energy from the rotor to electrical energy. Typically, generators operate at 690 volt (V) and provide three-phase alternating current (AC). Doubly-fed induction generators are standard, although permanent magnet and asynchronous generators are also used for direct-drive designs.

Transformer: The transformer is often housed inside the tower of the turbine. The medium-voltage output from the generator is stepped up by the transformer to between 10 kV to 35 kV; depending on the requirements of the local grid.

Bottomline: For Pakistani companies interested in indigenous development of small wind turbines (0.2kW - 100 kW) a good point to start is to develop rotor blades and towers which contribute to 30% cost of an on-shore wind power project (this increases to 50% for off-shore projects). The material used could be steel or wood which is easily available in the local market. One can also experiment with lighter materials that increase the efficiency of the system. A small wind power project of 3000 Watts can easily support all the appliances of a typical household in Pakistan (except the heavy loads such as air conditioners or large freezers/refrigerators).