Solar Energy Crises in Pakistan Essay
Solar Energy Crises in Pakistan
Pakistan is an oil importing country and its economy suffers the most by the oil prices inflict. Majority of its power generation is thermal with furnace oil, high-speed diesel and natural gas as fuel; coal is almost nonexistent. Because of fast growing economy and population the demand of energy is rapidly increasing. The electricity generation capacity in Pakistan is over 20,000 MW. This is not enough to meet our electricity demand. According to GOP estimates the generation capacity needs to grow by 50% by 2010 in order to meet the expected demand. Pakistan is endowed with various renewable energy resources such as hydel, solar, wind, geothermal and bio-fuel. It can earn dividends if these resources are explored, exploited and developed properly.
The use of solar energy either by manufacturing of PV modules or by installation of solar PV Power Plant will be beneficial for the investor and the country. Pakistan lies in an area of one of the highest solar insulation in the world. The average solar radiation is 5.5 KW/m2 and there are more than 300 clear days. The solar potential is estimated over 2900,000 MW. The minimum profit of $1/watt can be earned by manufacturing and selling of PV modules. Raw materials, man power and infrastructure are available for the aforesaid production. As the conventional resources are becoming scarce and expensive, the solar PV power plant will be one of the best options to produce electricity on reasonable tariff. Significant Government support and incentives are available for establishment of aforesaid projects.
2. CURRENT ENERGY SITUATION
A profile of Pakistan primary energy resources shows its dependence on conventional energy resources. Its share in energy supply mix is highly dependent on oil, liquid petroleum and natural gas. The primary commercial energy supplies during 2007-2008 were 62.9 million tons of oil equivalents (MTOE). The share of natural gas in primary energy supplies during 2007-2008 was 47.5% followed by oil 30.5%, hydro electricity 10.9%, coal 9.2%, nuclear electricity 1.2%, LPG 0.7%, and imported electricity 0.1%. Fig. 1 shows primary energy supplies by source of year 2005. Natural gas production during 2007-2008 was 3,973 million cubic feet per day and oil production 69,954 barrels per day. During 2007-2008, 27 exploratory and 53 developments wells were drilled mostly of gas/condensate, out of which 5 were by Oil & Gas Development Corporation Limited (OGDCL) and 6 by other companies.
Coal production increased by 13% in 2007-2008 over the previous year due to multifold increased production from Barkhan Coal field in Balochistan. The consumption of coal in power generation increased by 1.3% from 164,397 tons in 2006-07 to 162,200 tons in 2007-08 and the electricity generation during 2007-20 was 95,860 Gwh (including 199 Gwh of electricity imported from Iran). The generation included 66.5% thermal, 30.0% hydel, 3.2% nuclear and 0.2% imported. Presently, the electricity generation capacity in Pakistan is over 20,000 MW. This is not enough to meet our electricity demands and with an average increase of around 1000 MW per year in this demand, the problem will continue to grow.
According to Government of Pakistan’s estimates, the generating capacity needs to grow by 50% by 2010 in order to meet the expected demand. The high dependence on oil import has a huge negative impact on economy and energy security of the country. The natural gas reserves are not in great position either with proven reserves of 28.62 trillion cubic feet (TCF). At this production level Pakistan’s reserves would finish in 24 years. The measured coal reserves are in large quantity (3,303 million tons). However, currently coal is not playing a noticeable role in Pakistan’s energy mix.
3. ELECTRICITY CRISIS OF PAKISTAN
The latest and perhaps the most troublesome crisis faced by the Pakistani nation these days is the shortage in supply of electricity. The country is facing a huge electric power crisis these days. Though it has been more than a year since when the country is facing this crisis, but till now no proper solution has been made to this problem neither any proper planning has come into existence since the symptoms and beginning of this short supply of electricity. While rolling blackouts or load shedding as it is locally known has always been a staple of daily life in Pakistan, the problem has become acute in the last couple of years. This crisis appears insurmountable in the near or even long-term future, unless proper understanding and correct implementation is undertaken on priority basis. At present total power production capacity in the country is about 19,500 MW, out of which hydel Power is only 6,500 MW, balance of 13,000 MW is thermaleither using Natural Gas or Furnace Oil. Small capacity of 450 MW is Nuclear and only 150 MW is through coal. It is very important to understand the consequence of the prevailing situation. Current price of furnace oil is about Rs.49, 000 per ton, which amounts up to Rs.49/- per kg. On an average, one kg of furnace oil produces 3.8 kWh of electricity.
Thus, the cost of furnace oil for generating one unit of electricity is about Rs.13. On top of this the fixed cost of a thermal plant works out to be about Rs.3 per unit. Therefore, one unit (kWh) of the electricity produced by all thermal plants using furnace oil is Rs.16 per unit. According to WAPDA/IPP agreement, the private power producers will charge WAPDA the actual fuel cost for which they have a direct contract with PSO. As we all know that WAPDA tariff charged from the consumers is about Rs.5 per unit (kWh). The production cost of furnace oil electricity is Rs.16 per unit, add to it the transmission, distribution cost (including loses), “the total cost of such electricity works out to approximately Rs.22 per kWh. The difference between WAPDA tariff and the furnace oil electricity is Rs.17 per kWh.” It is estimated that the country consumes at least 25 billion units of electricity produced annually through furnace oil, which amounts to the total deficit of Rs.425 Billion.
If WAPDA has to balance its books it would require a subsidy of Rs.425 Billion. This deficit is somewhat reduced due to cheap power produced through hydel energy and natural gas, but the deficit cannot change substantially, unless bulk of electricity is produced through hydel energy. Obviously, a deficit of Rs.300-350 Billion cannot be sustained, the government does not have resources to pay such a huge subsidy, and it is also not feasible to increase the power tariff very much. Therefore the power crisis is far greater than what is being perceived. In the absence of extremely heavy subsidy, WAPDA is delaying payments to IPPs and also to the oil companies. The result is that IPPs are now producing much less electricity than their capacity. In this scenario renewable energy like solar is required with relatively less cost and long term benefits.
4. WHY USE SOLAR POWER?
4.1 REDUCED DEPENDENCE ON FOSSIL FUELS
Solar energy production does not require fossil fuels and is therefore less on this limited and expensive natural resource. Although there is variability in the amount and timing of sunlight over the day, season and year, a properly sized and configured system can be designed to be highly reliable while providing long-term, fixed price electricity supply.
4.2 ENVIRONMENTAL ADVANTAGES
Solar power production generates electricity with a limited impact on the environment as compared to other forms of electricity production.
4.3 MATCHING PEAK TIME OUTPUT WITH PEAK TIME DEMAND
Solar energy can effectively supplement electricity supply from an electricity transmission grid, such as when electricity demand peaks in the summer
4.4 MODULARITY AND SCALABILITY
As the size and generating capacity of a solar system are a function of the number of solar modules installed, applications of solar technology are readily scalable and versatile.
4.5 FLEXIBLE LOCATIONS
Solar power production facilities can be installed at the customer site which reduces required investments in production and transportation infrastructure.
4.6 GOVERNMENTS INCENTIVES
A growing number of countries have established incentive programs for the development of solar and other renewable energy sources, such as (i) net metering laws that allow on-grid end users to sell electricity back to the grid at retail prices, (ii) direct subsidies to end users to offset costs of photovoltaic equipment and installation charges, (iii) low interest loans for financing solar power systems and tax incentives; and (iv) government standards that mandate minimum usage levels of renewable energy sources. Despite the cost, an advantage of photovoltaic systems is that they can be used in remote areas. Anywhere a diesel generator is the technology of choice, many times a photovoltaic system is a much better life-cycle cost option.
Renewable Electrical Energy Potential / Current Installed capacity
Stand-alone photovoltaic systems produce power independently of the utility grid. In some off-the-grid locations even one half kilometer from power lines, stand-alone photovoltaic systems can be more cost-effective than extending power lines. They are especially appropriate for remote, environmentally sensitive areas, such as national parks, cabins, and remote homes. The solar power market has grown significantly in the past decade. According to Solar buzz, the global solar power market, as measured by annual solar power system installations, increased from 427 MW in 2002 to 1,744 MW in 2006, representing a CAGR of 42.2%, while solar power industry revenues grew to approximately US$10.6 billion in 2006. Despite the rapid growth, solar energy constitutes only a small fraction of the world’s energy output and therefore may have significant growth potential. Solar buzz projects in one of its forecasts that annual solar power industry revenue could reach US$31.5 billion by 2011. Quantum of solar energy reaching Pakistan has 33,000 million times more potential than its hydropower potential.
5. COST CALCULATION OF SOLAR PV PANELS
Suppose if someone pays $60 to $80 every month in his electricity bill. This cost along with the unapprised increase in electricity charges leaves you with little or no saving. On the other hand installation of solar power plant is a onetime expense. For example a single solar panel costs $1000 to $1500 only. This is a onetime expense and it includes all the government taxes, rebate and tax credit. Hence it ends up using very cost friendly package because now we are able to enjoy the long term benefits of deploying solar power system. If we analyze the cost associated with the efficacy of solar collectors and solar panels, it is amazing. An average photovoltaic panel has an estimated energy conversion of about 20 to 25%.hence if any panel receives unobstructed sunlight for constant three hours on 1 square meter is about $0.05%, therefore it is much lower as compared to use of other biofuels. Here it should also be noted that heat consumption efficiency for solar water heaters is same as the efficacy for oil. Whereas the cost of oil is $2 per gallon while of sun it is only $0.14. Furthermore the life of solar panel system is 25years +.
6. FUTURE OF SOLAR ENERGY
6.1 LEVELIZED COSTS
“The present-day average cost per kWh produced by the turbine / plant over its entire lifetime, including all costs (investments, reinvestments and operation and maintenance costs). The levelized costs are calculated using the discount rate and the turbine / plant lifetime.”
6.2 ERNST & YOUNG ANALYSIS
Ernst & Young analysis suggests Price of solar panels to drop significantly by 2013. To compare the relative cost of solar – usually described in terms of the dollar price of each watt of peak capacity – and other energy sources, analysts consider factors such as upfront expenditure, fuel prices, maintenance and discount rates to calculate the “levelized” cost of each unit of energy. The report predicts that, with continued support in the short term, the levelized cost of large-scale solar will be no higher than retail energy prices by 2016-19. This suggests that within 10 years companies with large electricity demands will find it cheaper to install unsubsidized solar than to buy energy via the grid in the traditional way
7. IMPLEMENTATION OF SOLAR PV IN OTHER COUNTRIES
Many developed and under developed countries like America, Germany, Iran, China and India are utilizing Solar PV projects to meet the future demand of energy. The region of Nevarra, Spain, is generating 70 per cent of its electricity through solar and wind energy. This region does not have any coal, gas or oil of its own. It’s really a classic example of making the best use of renewable energy in any country of the world! But, the question that automatically crops up in one’s mind is: If it can be done in Spain, why can’t be done in our country? The answer is, (a big yes) absence of will only.
8. DEVELOPMENT AND UTILIZATION OF SOLAR PV ENERGY IN PAKISTAN
8.1 BACK GROUND
Pakistan lies in an area of one of the highest solar insulation in the world. There are certain regions of south, Quetta valley and Central Punjab that receive maximum solar radiation, the nationwide average, however, have been recorded on daily basis as 5.5 KW/m2. This means that there is a vast potential for converting the untapped solar energy source for useful means. This potential can be exploited to produce electricity, which can be provided to off grid communities in the northern hilly areas and the southern and western deserts. According to the Pakistan Energy Book 2004-05, solar energy falling on 0.25% Baluchistan province would be adequate to meet the current requirement of the country with 20% efficient devices. Solar panels in different powers and sizes are available in the local market, which are imported from America, Europe, China and also being fabricated in the factory near Hattar (Only Modules are produced from imported solar cells) on a small scale and National Institute of Silicon Technology (NIST).
A practical example of the use of solar energy could be seen in some villages of Pakistan where each house has been provided with a solar panel, sufficient to run an electric fan and two energy saving bulbs. Prior to this arrangement, the whole village used to be plunged in pitch dark during night. One such example is the village with the name of Narian Khorian, some 50 kilometers away from Islamabad, where 100 solar panels have been installed by a local firm, free of cost, to promote the use of solar energy among the masses. Through these panels, the residents of 100 households are enjoying light and fan facilities. Had these panels not been installed, the people living in this area wouldn’t have even dreamt of getting this facility for decades as the provision of electricity from the national grid was a far cry due to the difficult terrain and high expenses involved.
Solar panels are being used for providing electricity to extract water and drip irrigation system in Nagr Parker
8.2 SOLAR ENERGY
There are two main techniques of power generation through solar radiation; one is Solar PV Technology and other is concentrated solar power technology (CSP). The PV is the best Suited for stand-alone power requirement of homes and offices. Although the world has experienced off-grid connected solar PV power plants; still it is a kind of domestic business. On the contrary, the CSP technology is best suited for grid-connected power plants.
8.2.1 SOLAR PV CELLS
They convert solar energy in to electricity that is used to charge batteries to provide lights during night. Many solar cells combine together to form solar module and many modules combine to form solar array.
Solar Cell Many Solar modules combine to form array
Solar energy has excellent potential in Pakistan that receives high levels of solar radiation throughout the year. Solar Energy is available at a rate of 1000 watts per square meter in Pakistan. This can be converted to DC electricity with the help of Solar Photovoltaic cells, which may be used to pump water, operate fans, TV and telecommunications directly during daytime. The electrical energy generated during the day time (5-8 hours of sunshine), can also be stored in deep cycle lead acid batteries which can be used at night to provide power for lighting, radio, Television and fans. The system will be user-friendly and designed as a stand-alone system for each household, who will be trained to operate and maintain it. The user will only be required to switch on/off the system, as is done in normal home lighting systems. In addition, Solar Photovoltaic Panels can generate enough electricity to pump water from depth of 350 ft, 700 ft and up to 1000 ft.
9. RESOURCE POTENTIAL OF SOLAR PHOTOVOLTAIC
Solar energy is a potentially available renewable energy source in this region. This source can be utilized as an excellent alternative to fossil fuels for these areas. Pakistan covers 796,095 square kilometers of land between latitudes 24° and 36°north and longitudes 61° and 76° east. At present, it faces serious energy problems: 95 per cent of its electricity generation comes from hydropower, which becomes less productive during the driest, hottest months of the year and cannot keep pace with the sharp rise in energy demand. Also, about 70 per cent of the population lives in some 50,000 villages dispersed around the country. Many of these villages are far from the main transmission lines of the national grid and, because of their relatively small populations; it is usually not economically viable to connect these villages to the grid. Solar energy, on the other hand, has excellent potential in areas of Pakistan that receive high levels of solar radiation throughout the year.
Every day, for example, the country receives an average of about 19 Mega Joules per square meter of solar energy. The solar module / panel are selling for about $6-7 per watt in limited stocks in Pakistani market with average life of 10-15 years. In one panel, approximately, 72 or more solar cells are used, depending upon the power required and the electric gadgets to run utilizing these panels. Each solar cell is costly, if imported from abroad, with more power rating.
These cells would be required in millions or may be in billions if requirement of the complete country is to be met. We cannot import such a huge quantity of solar cells from other countries due to financial constraints and high prices. So, naturally, there would be no other option but to resort to manufacturing these cells in our own country. Hence huge Investment is required to manufacture solar cells in Pakistan, as it has great potential in local and international market. Then three basic requirements i.e. raw material, trained manpower and necessary infrastructure are required by the investor on reasonable rates.
9.1 RAW MATERIAL
The basic raw material (quartz) is available in abundance in the northern areas of Pakistan. This raw material can be made useful after purification and development to a stage where this raw material could be converted into solar cells (PV manufacturing plant). This equipment will have to be imported; but it would be a one-time investment. One would be surprised to know that this raw material is being utilized by the local population of Northern areas for raising the walls of their houses in place of bricks as the poor simpletons don’t know its value. The other raw material required to manufacture solar cells is silica (sand) which is available in inexhaustible quantity in River Sindh as water these days is otherwise in less quantity in our rivers. At least we should make use of silica in the manufacture of solar cells.
So, to venture into manufacturing of solar panels, both the raw materials are available in abundance free of cost. In a solar system, apart from solar panels (which include solar cells), tampered glass sheets, batteries and inverters (to convert DC electricity into AC) are also used. We have innumerable factories producing good batteries and inverters in our country; so this is also available. Regarding tampered glass, we have many glass manufacturing factories in Pakistan. In this case as well, we can augment their existing facilities to produce tampered glass of required specifications. Tampered glass is after all glass and nothing else. Required machinery could be imported and installed in our existing glass manufacturing factories (on partnership basis). There is no need to set up separate, dedicated factories for each item. This raw material will be available from these factories on economical prices.
9.2 MAN POWER
The other requirement is that of manpower. We have the finest and the most hard-working, skilled manpower available in our country. From my personal experience, I could say with conviction that the retired personnel of the defense services who have been working on electronics and telecommunication equipment during their service careers would be the best choice for deployment on the manufacture of solar panels and cells. These people are highly skilled and disciplined and get retired at an early age. Fauji & Shaheen Foundations, maintain an up-to-date computerized record of such personnel who are just on a telephone call away. The expertise of such workers is not less than any worker deployed in the western countries for such jobs. The only difference is that a European worker of such caliber gets US $ 45 per hour whereas a Pakistani worker, if he is paid $5 per hour (or even less) in his own country would be the happiest man around.
Availability of infrastructure for setting up manufacturing facilities would be aided by (Alternative Energy Development Board) AEDB Pakistan.
10. SOLAR PV VALUE CHAIN
The solar PV value chain consists of a number of specific and distinct steps from the production of silicon to the end use in solar power plants or in solar panels used for distributed power generation (e.g. solar panels on residence rooftops). Range of business opportunities available along the entire value chain is as flashed.
A detailed value chain of entire solar PV industry is also flashed. [pic] Solar PV value chain
10.1 VALUE CHAIN & KEY INDUSTRY SEGMENTS
The solar PV industry value chain comprises a number of sub-segments. It might be useful if they could spend time to analyze the niche areas that are underdeveloped and under serviced where solar PV could be applied. For instance, in Pakistan, following are some of the segments underserved by the current electricity grid and hence could make excellent markets in the context of the solar PV industry:
1. Villages that have no grid connectivity
2. Companies that use diesel generator sets as a power backup 3. Mobile telecom towers in many parts of Pakistan that have little access to the utility grid, and other stand alone commercial and industrial ventures.
The PV technology can be used as both for manufacturing and sale, and for production of electricity and then its sale into grid.
10.2 BASICS OF MODULES – TECHNOLOGY INVOLVED IN MAKING OF PV MODULES
Solar PV modules can be produced using different technologies. Today, crystalline silicon technology leads the Solar PV module production, followed by thin films. There are also other technologies being developed, but crystalline silicon technology and thin film technology will continue to dominate the solar PV module space for the foreseeable future, unless some technology breakthrough happens. As mentioned in earlier sections, since thin-films are very nascent,. The important equipments used for the production are discussed subsequently. Once a module is produced, it is important to test and certify them before they can be sold to customers.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 5 October 2016
Let us write you a custom essay sample on Solar Energy Crises in Pakistan
for only $16.38 $13.9/page