WIND ENERGY POWER PROJECT DEVELOPMENT in PAKISTANSector Information Memorandum
INDUSTRY ANALYSIS Pakistan has a great potential of Renewable Energy (RE). Among allsources of RE, wind is widely and abundantly available in Pakistan which can beutilized for generation of power. Government of Pakistan (GoP) is taking keeninterest to harness wind energy potential and has taken strong measures toinitiate wind power projects in the country. GoP is focusing in the south, coastalbelt, for the development of wind energy in Pakistan. The foremost focus of GoPis on Gharo - Keti Bandar wind corridor, where various projects each of 50 MWcapacity are in the different stages of development. In the context of wind based power, GOP has guaranteed topurchase all generated power. Pakistan Meteorological Department has conducted a detailed WindPower Potential Survey of Coastal Areas of Pakistan with the help ofNational Renewable Energy Laboratory (NREL) USA. This study hasidentified potential areas where economically feasible wind farms can beestablished. Acknowledging the importance of Renewable Energy Technologiesfor power generation, the Government of Pakistan created Alternative EnergyDevelopment Board (AEDB) in May 2003 to act as the national body on thesubject of Renewable Energy. The main goal is to introduceAlternative/Renewable Energy at an accelerated rate to achieve 10 percent shareof RE in the energy mix of the country. AEDB has earmarked a potential windpower generation area that cover 9700 sq. km in Sindh, with suitableaverage annual wind speed of 7 m/s at 30 meters. The gross wind powerpotential of this area is 43,000 MW.
SECTOR FEATURES Wind data analysis by AEDB of the area wind farms suggest that theregion is high potential area with the annual average wind speed more than7.3m/s at 80m (above ground level). Government of Pakistan is giving theguarantee of variability of wind speeds (wind risk) in this region. AEDB hasdeveloped benchmark wind speed table for the region and GoP is takingguarantee of variability of wind speed on this benchmark table. This, wind risk,guarantee by GoP will be critical in securing smooth repayments of the debtamount to the lending agencies during the operation of the project.PROPOSED AREA Wind data analysis and surveys of this region suggest that Gharo - KetiBandar wind corridor is one of the most promising areas where wind powerprojects can be viably installed. Figure 1: Outline of Jhimpir Wind Farms Area
The Gharo-Keti Bandar corridor can be divided into two distinct areas:Gharo Area with its “intra-tidal” and Jhimpir Area with its “inshore” wind farmconstruction. In Jhimpir is terrain of the area is flat with small change in altitude.The proposed site lies under roughness class 1.5. The ground is hard and rocky;the subsurface soil also includes clay and silt. In Gharo, the land is marshy and atidal study needs to be done to know the tide patterns before installation can beachieved. The whole corridor is exposed to very strong South Westerly winds, winddata analysis of the area suggest that, 80% wind is blowing from south westdirection. The site is easily accessible through metallic roads. The elevation ofthe sites ranges from sea-level to an elevation of 150m above sea level ( Jhimpirsites are at an elevation whereas all of Gharo-keti bandar sites are at sea level) . Following are the few other facts of the site: • Climatic conditions of the site are quite moderate. Atmospheric temperature remains between 25 – 43 °C with an annual average of 26°C. Precipitation is scarce. • Sustained Good winds are present all around the year with high season being from March to October. • The project area is easily accessible through metallic road which can be used to transport the WTGs. • Commissioning of wind power projects in Jhimpir area has already begun. Zorlu wind power plant has five turbines up. FFC’s farm has received the regulatory approvals (Tariff, EPA, IEE etc.). Various other national and international companies are negotiating EPC contracts for setting up of wind power projects. Due to these technical activities in the region, the technical knowhow and infrastructure capability is becoming available in the area.
SECTOR SALIENTS As per AEDB’s requirement feasibility Study for a wind farm is divided intofollowing five sub-studies: • Wind Risk Coverage AEDB has developed benchmark wind speed table for Jhimpir region and GoP is taking guarantee of variability of wind speed on this benchmark table. Government of Pakistan is giving the guarantee of variability of wind speeds (wind risk) in this region. • Guaranteed Power Off-take Evacuation of power generated through renewable energy sources/ wind is obligatory for the government agencies (RE Policy 2006). National grid is available within the area. Grids of 132 / 11 KVA are available in the close vicinity of the project site; Gharo, Jhimpir and Jherk are the main grid stations which are close to the project site and can off take the generated power the area Wind IPPs. Rate of Return Government has allowed 15% ROE to all the IPPs in the thermal sector. But wind this has been increased to 17%. NEPRA has already allotted tariff based on 17 % ROE in wind power. • Protection against Political Risk Policy guarantees protection to investments against nationalization, expropriations or any changes in the law that may affect them adversely. ADB’s Guarantee Asian Development Bank has already offered US$ 450 million for providing a counter guarantee to the financiers of the Wind projects. This will provide further safety to all the financiers of this sector. This amount will almost provide guarantee for first five projects in wind. • Wheeling Provisions for two party deals
This policy provision will become a great step forward in resolving the circular debt problem as electricity could be wheeled and used by some industrial outfit directly.• Sharing of Carbon Credits on top of Tariff This enhances the Rate of return further in Wind Power as in these projects quite a number of Carbon Credits will be generated thus generating quite substantial income from the sale of those credits. NEPRA has already ruled in favour of sharing of this revenue by the power producer.• No Import duties on Equipment• No Income Tax/ Withholding Tax• Convertibility of Pak Rupees into US $