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Alternate to AEDB for sustaining Pak economy – a new corporate entity

Needless to say, Pakistan is in dire need of Alternate and Renewable Energy (ARE) resources to sustain its economy. Alike, it is in dire need of sustainable institutions to achieve energy for all, energy security and Alternate and Renewable Energy resources into the power system. Importance of alternate and renewable energy sources is immense, therefore the government may consider to have AEDB (Alternate Energy Development Board) converted into a larger independent corporate entity, such as Pakistan Industrial Development Corporation (PIDC) (was once), National Investment Trust (NIT). These institutions were catalyst for industrialization. Similarly, the new ARE corporate entity should become a catalyst for Alternate and Renewable Energy resources into the economic system. If Pakistan, really wants to have alternate and renewable energy resources matching rest of the world in 2040 at 40% of total energy mix, then the Government and policy makers have to really not only think out of the box but act out of the box, as well. It is very encouraging to note that the Federal Government is proactively developing a new Policy-2019 for Alternate and Renewable Energy (ARE) resources, which will be approved by the Council of Common Interest (CCI). But it is still felt by the professionals that the Policy-2019 may not deliver the desired results. Continuous interventions at AEDB had and would impede the speed of installation of solar and wind on-grid and off-grid power plants. The new corporate entity with Federal Government sitting at 49% shareholding would not have non-productive interventions. The Summary to CCI should entail all important features, including target MW, sustainability.

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It is imperative that the AEDB-alternate needs to be an independent corporate entity with a Vision & Mission, short, medium and long term targets answerable to its board of directors and shareholders. The members of Board of Directors should be from various walks of life that is professionals and business community, as per SECP rules. The Federal and Provincial governments being partial owners as minority shareholders may exercise their point of view at the board meetings. The government may also off load its shares in Pakistan Stock Exchange at a much higher price than the par value. The new ARE corporate entity to emulate successful private sectors, such as Engro, Attock, Fauji to name a few.

This alternate corporate entity to AEDB is one solution to energy crisis and energy security of Pakistan. The envisaged corporate entity would be able to deliver more efficiently and to the likes of government, investors and consumers. As a way forward the government may revise the new ARE Policy-2019 in the making to create place for the new ARE-corporate entity and convert the AEDB into a policy wing of 10 professionals/MP-1s/2s/3s, which would be like a professional advisory body to the Ministry of Energy (Power Division). It is strongly believed in the professional community that the present concept of a ‘board’ would not result effectively, history will repeat itself. And, ARE Policy-2019 may meet its predecessor RE-Policy-2006 fate by having 0.1% of RE in the total energy mix-2018. It is better to spend a few more months and burn midnight oil rather than a miscarriage. The Ministry of Energy Power Division may form a task force to produce a Summary for the approval of Council of Common Interest CCI at the same time produce a business plan, articles of association memorandum of association, HR organogram, budget first year etc.

The Federal Government is proactively moving towards Alternate and Renewable Energy Policy ARE-2019. The industry, consumers and manufacturers are looking towards this policy to give a major economy impetus to Pakistan’s economy to be sustainable. The Government has been very forthcoming in sharing its point of view and narrative with the experts, professionals and the industry. This proactive practice will improve the installation of alternate and renewable energy sources on grid and off grid. Also for the businessmen and investors there is a great opportunity in waiting to expand business base and wealth. Although at present the renewable resources are less than 1% but it is expert opinion of the professionals that the Policy-2019 in the making will increase the renewables to up to 15% of the energy mix by 2030, if AEDB is corporatized. Like any policy, it needs to be revisited every 5 years, so the next time such policy interaction is done hopefully Pakistan will achieve the renewables to be 40% of the total energy mix by 2040. This provides an immense opportunity to the Pakistani entrepreneurs to come forward and take the lead indigenous design, manufacturing and marketing of solar panels, winds blades/stacks and related auxiliary systems. The major conglomerates of Pakistan need to enter the manufacturing of solar cells from scratch i.e. from sand silica up to the panels, including crystals and wafers. Pakistani engineers and scientists do you have the capacity to successfully implement and operate, such ventures. The Federal and Provincial Boards of Investments may hold B2B meetings with business conglomerates, academia, scientists and engineers to bring all of them under one roof to evolve a futuristic business model for manufacturing of solar crystals and wafers from scratch i.e. from sand silica. Similarly, meetings need to be held on wind and hydel power indigenous design and manufacturing on-grid and off-grid. The Federal and Provincial governments, including the regulators needs to simplify licensing mechanism, so that prolonged and non-productive negotiations on power purchase agreements (PPA) implementation agreements (IA) do not take time forever.

 

Tailpiece: PPIB should also be corporatized to emulate private sector.

As, Pakistan passes through the sceneries of economy, science, technology, space, time, generation after generation, philosophies after philosophies; big was always better. But times are changing. Today and in foreseeable future, not only big is better but small if smart, as well. There is no one solution to complex economic solutions, which bring us to the sub-sets of economics; where energy is the one of the most important aspects. Today and tomorrow, thanks to Google and other search engine alike, the technologist, experts, academia, students, families and a common person can also change the lives of poor masses, her/himself and destiny of a Pakistan.

We always need not look towards the various tiers of governments for a solution. In any walk of life, especially the energy and economics, we can ourselves as individual to individual contribute towards the energy security, capacity addition, reduction in energy waste, conservation, dissemination of information. Time has perhaps come, that the One Million (middle & upper – the blessed class of the society who also pay taxes) engineers, scientists, bankers, doctors, lawyers, sportsperson and businesspersons take the lead in installing solar photovoltaic (PV) panels on the rooftops, gardens, patios and terraces along with hot water solar systems. We should not look towards the governments for subsidies, tax cuts and alike. As educated lot of the society, the families need to scientifically do their house budgeting and come up with needed funds through own savings or borrowing, which should not be that difficult for such educated lot. This could bring a major change in our overall Energy Efficiency and Intensity. The educated middle and upper class need to spend certain amount of time on a weekly basis to ensure that their houses are energy efficient and moving towards zero carbon footprint. Having said all the above, I am not absolving the Governments from installing large capital intensive power IPP (Independent Power Producers) projects, whether it is hydro, solar, wind, coal, gas and oil based power plants.

One Million homes with 5 kilowatts each would mean (1 x 106x 5 Kilowatts) 5000 MW at the load centers, that is the house itself. Or in other words literally no transmission or distribution losses, so 5000 MW infact means 9000 MW in NTDCL terms. This kind of initiative by the educated middle and upper class at Rs 600,000 each can improve the overall energy efficiency of the country. Another part of our lives is natural gas, whereby installation of Solar water heaters sized 100 liters at Rs. 40,000 is a great bargain from SNGPL.

Pakistan also needs base load large power plants for supply of power to industrial zones, heavy industries and other consumers who have not installed their individual solar or wind systems. Needless to say, Pakistan cannot replicate Holland, Germany or Denmark at present, as their economies and industrial sectors are totally different from the phase of industrialization that Pakistan is going through.

Conclusion:
  • The new Alternate and Renewable Energy Policy-2019 needs to convert AEDB into a corporate entity.
  • Middle and Upper class to install Solar Panels and Solar water heaters.

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