Shams Power: Why Producing Solar Energy is Cheaper Than Coal-Fired Energy in Pakistan

Pakistan’s energy mix is dominated by outdated coal technologies. It is also heavily dependent on seasonal hydropower generation.

Experts say that boosting the share of renewables is within Pakistan’s reach. However, they caution that more investment in wind and solar energy projects could increase Pakistan’s dependence on technology owned by foreign companies and exacerbate food insecurity.

1. It is a clean source of energy

Humans have been using the sun’s energy to grow crops, stay warm, and power devices for thousands of years. However, the production of fossil fuels can have negative impacts on the environment, from stripping Canada’s boreal forest to fracking for gas and polluting our air with CO2.

Fortunately, the world is shifting away from these unsustainable sources of power. Globally, renewable energy is on the rise. By 2050, the share of renewables in electricity generation will reach 86%, compared to just 25% today.

IEEFA’s report recommends that Pakistan should urgently target 30% renewables by 2030, with a significant share of that coming from solar and wind. This will make electricity cheaper, provide greater energy security, and help reduce climate change emissions. It will also help Pakistan avoid the boom-and-bust cycle of underinvestment in power generation followed by emergency capacity development that has characterized recent decades.

2. It is a renewable source of energy

The country’s abundant coal reserves — including those in the Thar Desert — make it tempting for policymakers to pursue coal-based generation. But coal is a finite resource that will eventually run out, while solar and wind power are renewable.

As a result, the use of renewable energy has the potential to wean Pakistan from its dependence on fossil fuels and improve the environment. But the government faces several challenges, including past contracts with China to build coal plants; high-interest debt that can increase electricity rates; and the need for cheaper batteries.

Despite these obstacles, the Pakistan Tehrik-e-Insaf government is moving to increase the role of renewables in the nation’s energy mix by setting a target of 30% renewable energy by 2030. It has also reversed a ban on investing in wind and solar power that was put in place by its predecessor, which will allow for new investments to be made. However, experts say that the goal will only be achieved if the government can overcome three major challenges:

3. It is a cost-effective source of energy

While Pakistan’s politicians have sought to bolster coal power under the China-Pakistan Economic Corridor (CPEC), IEEFA’s analysis suggests that a more cost-effective alternative is solar and wind. Pakistan should urgently scale up renewables to 30% of the country’s total energy generation capacity, which would achieve greater energy security and substantially reduce carbon emissions.

Pakistan’s politicians have prioritized coal over alternatives because it is cheap to build and operate, and is readily available for local use. However, domestic and imported coal will not remain economical due to recent reductions in variable renewable energy (VRE) costs.

Moreover, the high initial investment in solar energy requires vast areas of land. These areas would be occupied by solar panels, which could damage agricultural production and exasperate food insecurity. This, plus the fact that it is not financially viable to give electricity subsidies, has dampened the growth of solar power. Nevertheless, this technology should be further explored in Pakistan. If the government subsidizes energy more responsibly, it will make solar and wind cheaper than coal in the long run.

4. It is a source of employment

As the demand for renewable energy grows, there are new opportunities to employ people in its production. The technology is rapidly becoming affordable and, according to IRENA, will be price-competitive with coal by 2020.

It is also more environmentally friendly, reducing greenhouse gas emissions and avoiding the degradation of the environment. By contrast, the production of fossil fuels like coal causes pollution and degrades the water supply.

Pakistan is perfectly poised to make the switch from coal, but many barriers must be overcome. One of the biggest is the lack of investment in solar power projects. It is hard to attract local investors to such projects, which require a high initial cost and a long time to pay off.

Despite the problems facing the electricity sector, it is possible to save money by switching to solar energy. Using solar energy can help reduce the country’s electricity bills and create more jobs. This will benefit the economy and improve the quality of life in Pakistan.