“When the world is predictable, you need smart people. When the world is unpredictable, you need adaptable people.” (Henry Mintzberg)
Energy markets continue to be turbulent and are showing no signs of stabilising any time soon. Led by technological breakthroughs, geopolitical upheavals, and environmental imperatives, multiple forces are reshaping the global energy landscape, making it more unpredictable. In this situation, Pakistan’s policymakers, particularly those in the energy sector, must heed the advice of Professor Mintzberg, a distinguished faculty member at Canada’s McGill University. They should avoid knee-jerk reactions, ad-hoc policymaking, and spur-of-the-moment decisions.
Let us take a few examples to highlight the policy flip-flops of the governments in Pakistan in the energy sector, using renewable energy policies as a case in point.
The dust had hardly settled on the Alternative and Renewable Energy Technologies (ARET) Policy 2019 when a Fast-track Solarisation initiative emerged. We do not know exactly what became of this initiative that was launched with a lot of fanfare. Recently, some in the corridors of power had a rude awakening that the Net-Metering policy launched in 2015 was a devil in disguise that must be chained. The media is currently abuzz with news that the country is in dire need of a battery storage policy, which will resolve most of the power sector woes, if not all.
Solar energy can serve us in several different ways. We can use it to heat, cool, or light our homes via architectural design and construction. We can use active solar techniques for water heating and space-conditioning, or to generate electricity via conventional thermal technologies. We can also convert solar energy to electricity directly via photovoltaic (PV) conversion (either standalone or interactive with the grid), or at a central location and deliver it to consumers via the central grid.
Each of these options has its own scope, prospects, and constraints. Our policymakers must understand these thoroughly to devise a policy, or a mix of policies, to guide and steer the country in making the transition to energy supplies that are affordable, secure, and sustainable. Fragmented, disjointed, and parochial thinking will not serve the nation and could cause serious damage and financial losses.
Inconsistency or discontinuity in public policies is as bad as, or even worse than, any flaw in the policy itself. If a sitting government is not happy with any existing policy, it should improve it instead of issuing a new one. There should be a clear hierarchy in the various policies. Sectoral policies should emanate from national policies and should further elaborate on and complement them.
We are a poor nation and cannot afford any dilly-dallying or issuing policies one after the other, circumventing the due and established institutional process. Our leaders must take utmost care in committing even a single penny to any scheme whose implications are not carefully evaluated and which may be difficult to unwind later.
Fast-track and unregulated solarisation will necessitate the import of these materials and systems. This will not only deprive the country of the many potential benefits that a careful and properly designed renewable power generation plan can provide
Energy policies are serious endeavours and should be formulated by following a properly defined, structured, formal, and institutional process. They should not be rushed into without considering the full spectrum of their costs and benefits—not just economic and technical, but also social, political, environmental, security, and acceptability aspects. On top of these, the requisite institutional capacity for their effective implementation must also be ensured.
Task forces consisting of bureaucrats drawn from various ministries and representatives from some other energy sector entities are not the proper approach to making public or sectoral policies. Members of these task forces may be well-meaning, dedicated, and sincere, but they lack the expertise, time, and rigour that energy policymaking warrants. These are specialised undertakings and must be left to the specialists.
There is no denying that the prices of photovoltaic (PV) panels have plummeted in the past few years. They are taking the world by storm and hold a great deal of promise in serving our energy needs. However, the price declines have barely reached grid parity with other conventional technologies. There are still many concerns and questions about their true costs and value in serving end-user demand.
There are economic dimensions to the adoption of solar technologies, just as there are technical ones. A final decision should only be made when all the technical issues and their financial implications have been clearly identified and incorporated in the economic evaluation before embarking on an initiative that involves huge capital outlays and will bind the country to long-term commitments and contracts.
A critical potential benefit linked with the deployment of renewable technologies (solar and wind) is their small-scale, modular, and labour-intensive nature. These features can be very useful in spurring industrial development in the country and promoting employment around solar and wind technologies and allied (often called balance-of-system or BOS) components.
Pakistan currently lacks the industrial capability to manufacture PV panels and BOS components such as storage batteries, inverters, and power controllers. We also lack the materials for developing these systems locally. Fast-track and unregulated solarisation will necessitate the import of these materials and systems. This will not only deprive the country of the many potential benefits that a careful and properly designed renewable power generation plan can provide, but will merely shift the country’s current dependence on imported fuels to imported technologies.
Another critical aspect which seems to have been missed (or not reported) is the contribution of solar systems to the adequacy of the power grid (often termed as “capacity contribution” or “capacity credit”). If indeed this is true and only the energy aspect of this scheme has been considered, then this is a gross injustice to these systems. Whether they are connected behind the meter or anywhere else in the grid, PV systems contribute to avoiding or deferring some capacity requirements in the upstream system, which must not be ignored.
Determining the capacity value of a new generation alternative is a complex process and depends on the primary resource availability at a site, operating conditions, and the correlation of the expected power generation from that plant with the electricity demand at or near that site. It may be complex and difficult, but it must be worked out and incorporated into the evaluation process. Merely considering the resource availability using summary statistics cannot realistically provide this information.
For a grid which has been repeatedly accused of carrying excess capacity (due to stagnant demand), any chunk of the existing demand taken away by the new PV systems, irrespective of where they connect with the grid, will further exacerbate the existing mess. It would be prudent for the government to blend PV generation with the future supply portfolio to derive the many benefits these PV technologies can provide.
The planning tools, data requirements, and skills required to blend PV systems at the distribution level are significantly different from those currently available and used for bulk power system planning. The challenge is not just improved coordination between the two groups, but developing modelling and planning capability at these levels, independent and autonomous from bulk power system planning.
The international energy market is presently in flux and is expected to remain so for a while. This makes it imperative that we should not rush to a specific technology, no matter how promising it may appear at first sight, without fully comprehending its scope, implications, and constraints. The nation would be better off if we kept our options open, flexible, and adaptable, as aptly advised by Professor Mintzberg, to any future geopolitical and economic developments around us.