Pakistan’s national renewable policy in jeopardy
Pakistan is facing energy shortages for years now, with the gap between supply and demand ever increasing due to an increase in population as well as rapid urbanization. One of the glaring reasons for these acute energy shortages is the lack of any coherent long term planning for energy production as well as an energy mix coupled with transmission losses and poor governance.
Pakistan is heavily reliant on the use of fossil fuels (64 percent) and hydro energy (9 percent) to fill the gap between supply and demand and as such further increasing the use of fossil fuels to generate power in order to meet the energy needs of the country. Injudicious use of fossil fuels leads to GHG emissions, which are adversely impacting the environment.
In August 2020, under the National Renewable Energy Policy (NREP) Pakistan set in motion a plan to boost the share of its electric power that comes from renewable energy sources like solar and wind energy to 30 percent by 2030, up from the existing 4 percent of that time.
Decisions taken by the government are in contradiction to the prime minister’s policy of increasing the share of renewables in the energy mix in order to protect the environment as well as decreasing the country’s reliance on expensive and imported fossil fuels.
At a time when the rest of the world is setting targets for zero carbon emissions and moving toward a zero carbon economy by incentivizing and subsidizing green technology products, the PTI-led government has imposed a 17 percent sales tax on solar panels, inverters, and related equipment, which is set to jeopardize the very essence of the NREP and poses a threat to the future of renewables in the country.
The decisions taken by the government are in contradiction to the prime minister’s policy of increasing the share of renewables in the energy mix in order to protect the environment as well as decreasing the country’s reliance on expensive and mostly imported fossil fuels. This in turn will slow down Pakistan’s progress toward clean energy as set under the National Renewable Energy Policy.
Pakistan is blessed with a tremendous potential for solar and wind power generation. If tapped and incentivized properly, a significant uptick will be seen in the adoption of solar energy at the consumer end not only in residential areas but also industrial and agricultural sectors due to tax incentives.
Countries in the world, both developed like the US, UK, EU, Japan, as well as those developing like China, India, Brazil and many more, are working to increase the proportion of renewable sources of energy in the energy mix as sustainable energy policy options. The energy mix of countries in the EU shows a sharp rise of the renewable energy sources in their energy mix in the past couple of years. The major reason for this increased renewable energy proportion in the energy mix is that almost all renewable energy sources are environmentally clean and safe, cheap and highly sustainable, besides being eligible for earning carbon credits under the Clean Development Mechanism (CDM).
The unfortunate dilemma in Pakistan is that the present government is at a total loss in their ability to walk the talk. On the one hand they claim to be the champions and leaders of leading climate change action in the region, whereas on the other hand their regressive taxation policies leaves one wondering about their intent and claims toward creating a cleaner and greener Pakistan.
The research conducted by the alternate energy development board doesn’t leave any doubts about the fact that tapping into renewable energy sources, especially solar energy, is the only way forward for Pakistan in terms of economic as well as environmental sustainability. However, the increased price of solar energy after the finance supplementary bill 2021 makes one wonder about the commitment of the government as this will pave the way for illicit trade and import of low-quality cheaper equipment to meet the demands of consumers.
- Dr. Mehreen Mujtaba is a freelance consultant working in the areas of environment and health.