Promoting renewable energy and energy efficiency in Pakistan

Project description

Title: Renewable Energy and Energy Efficiency in Pakistan (REEE)
Commissioned by: German Federal Ministry of Economic Cooperation and Development (BMZ)
Country: Pakistan 
Overall term: 2005 to 2023

Context

In Pakistan, some 75 million people in rural areas and suburbs are affected by regular power shut-downs. A further 50 million people do not have access to secure electricity supplies. This causes major problems for the country’s economic and social development. 

At the same time electricity production relies heavily on hydro and thermal energy. Electricity from renewable sources (excluding large hydro) is contributing only five per cent to power generation. 

The Federal Government of Pakistan has set the target to increase the share of renewable energies (RE) to at least 20 per cent by 2025 and to 30 per cent by 2030. The measures introduced in the Al-ternative Renewable Energy (ARE) Policy 2019 are expected to fully integrate RE into the country’s energy planning as well as the country’s economic and social development.

Objective

Energy supplies in Pakistan are improved by increasing the amount of RE in the energy mix. Dialogue and knowledge exchange on using RE are improved. 

Approach

The REEE II project is being implemented through the following four intervention areas: 

1.    Grid management

The project advises network operators on the application of methods and instruments, automation and digitalisation. It reviews and updates grid codes and provides advanced trainings.

2.    Distributed generation

The project aims to improve the technical, economic, and administrative conditions for accelerating expansion of decentralised, on-grid solar power generation. The project advises the selected Distribu-tion Companies (DISCOs) on introducing the new innovative business model for the operation of net metering systems, digitising their net metering process and working closely with financial service pro-viders on risk management for RE financing. It implements measures to improve the product quality and provide standardised training to the service providers.

3.    Rural electrification

The project provides international experience with the stabilisation of weak electricity grids for rural electrification and supplying off-gird areas with energy from renewable sources. It develops strategies to stabilise weak electricity grids and develops business models and supports pilots to supply rural areas with renewable energy.

4.    PGREF- Pakistan German Renewable Energy Forum 

The PGREF gives high-level decision-makers from Pakistan and Germany the opportunity to share their know-how and experiences on a successful and sustainable transition from fossil fuels to renew-able energies. The dialogue platform brings together policy-makers, industry, science and civil society from both countries and promotes cooperation and knowledge transfer.

Results

  • The project provided RE policy advisory support to AEDB. As a result over 2,000 megawatts (MW) of renewable energy were added to the national grid. 
  • The project supported AEDB in the net metering policy initiative. More than 9,700 net-metering licenses with a cumulative capacity of 161 megawatt-peak (MWp) were issued by the National Electric Power Regulatory Authority (NEPRA).
  • More than 1,500 quality assured solar home systems were installed in off-grid areas under a results based financing (RBF) mechanism. About 10,000 people benefited from the measures. Emissions were reduced by 68 tonnes of CO2 
  • The project supported the State Bank of Pakistan (SBP) in developing re-financing schemes for a renewable energy project. By December 2019, 8.5 billion Pakistani Rupees (roughly 51 million Euros) had been disbursed to 13 projects with a total capacity of 93.6 MW.
  • The project also supported the State Bank Pakistan in the development of Green Banking Guidelines (GBG). These guidelines provide an environmental due diligence framework for all commercial banks in Pakistan for financing RE projects.
  • AEDB set out quality standards for importing PV equipment which are now used at the import borders
  • A Pakistani German Renewable Energy Forum has been established. 

Climate Change Activities:

  • The project supports the Ministry of Climate Change and the National Energy Efficiency and Conservation Authority (NEECA) in devising policy recommendations and in setting out a framework for a technical mitigation working group that will revise Pakistan’s National Deter-mined Contributions (NDCs) to the Paris Agreement. 
  • The programme supports theGlobal Change Impact Studies Centre (GCISC) to build better methods for reducing Green House Gasemissions.
  • A study has been conducted for lying the foundation for a Monitoring, Reporting and Verifica-tion (MRV) system in Pakistan that enables a detailed gap analysis. 
  • Technical support was provided to JS Bank for the global accreditation for a Green Climate Fund as a national entity. JS Bank is the second organisation in Pakistan achieving the status. 
  • The National Rural Support Program (NSRP) received technical support for developing a workplan to identify priorities for its engagement with the Green Climate Fund (GCF).

Last update: May 2021