Steaming rubbish heaps, foul waterways, unexplained ailments, unexpected deaths – this is the reality of most modern developing countries. Those who can, retreat into bubbles of serenity; those who cannot, succumb to tired banality. Some strive to bring about change, to raise awareness, to encourage social and civic responsibility; others dismiss new-fangled environmental, civic and social concerns as “western luxuries”.

Pakistan is one such ‘modern’ developing country, with complicated issues popping up faster than a team of weary activists can spot them. But stories of woe and pessimism on Pakistan’s impending implosion, litter our news landscape. Sadly missing are the success stories, the breakthroughs; the developments that augur well for the country’s progress.

And there are quite a few. An extremely important one, is the increasing focus on solar energy development, both in the private and the public sector.

Crisis in the making

Pakistan receives over 320 days of extended daylight hours and high levels of average daily solar radiation energy (insolation) – 5.3kwh/m2 (1).

PV Tech: Solar radiation map

This, combined with over dependence on an expensive supply of fossil fuels – thermal power accounts for over 60% of electricity generation –makes it an ideal candidate for solar power development.

According to a World Bank report, although 68% of Pakistan’s population has access to electricity, 44% of all households are off-grid; 81% of these in rural areas (2). These tend to use(unsubsidized) kerosene as an alternative energy source – an expensive proposition given the cost of oil.

With the supply plateaued at 12000 MW and the demand skyrocketing at 19000 MW during summers, the country is experienced crippling energy shortages and power blackouts. No wonder then, that energy has therefore shot up to the top of the priority list, along with Security, according to Zubair Kazmi, Country Manager Pakistan for Canadian solar power company, SkyPower. The government of Pakistan, worried about the potential for unrest the energy crises holds, is backing a number of projects in hydro (which currently accounts for 31% of electricity generation), thermal and biogas energy, all of which are expected be online by 2015-2017.

Renewed Interest

The government has had a coherent Renewable Energy Frame working place since 1992, according to Kazmi, and a National Power Policy framework was announced in 2013 (5). However, implementation has been sporadic and small scale, with the primary bottleneck holding back investment, being the cost of debt, says Kazmi.

The nature of Pakistan’s risk profile is such, that the cost of debt needed to fund these capital-intensive projects is high and the sources of such funding – both domestic and international – are limited. Prohibitive financial costs are a major deterrent, especially to private and small-scale investment.

Under external and internal pressure, the government is offering subsidies and incentives to foreign and local investors, to attract investment in the sector and mitigate – at least to some extent – Pakistan’s destructive energy shortage.

Energy Bangla-Pakistan Parliament

Solar power projects have been launched with the support of global institutions such as the World Bank, Asian Development Bank, Islamic Development Bank (IDB) as well as the governments of China, Saudi Arabia and Germany (6). Locally, Bank of The Punjab is at the forefront of domestic initiatives, with schemes such as BOP Solar aimed at providing funding for small solar power home kits. Various high profile public sector projects have already been implemented, such as, the installation of solar panels at Parliament House, Islamabad that will generate 1.8MW when completed. The panels are being installed at a cost of US$60m funded by the Chinese government (7).

Previous projects include a 356kW solar-powered on-grid power plant in Islamabad, funded by Japan International Cooperation Agency (8).

Pakistan has a thriving IPP (Independent Power Producers) sector with just over 50% of the country’s thermal energy production of 15.5MW provided by IPP’s (9). Many industries depend on private power generators to maintain operations, as indeed do many private households. The government is hoping to encourage similar investment in solar power production. Major players in the solar power sector include Nizam Solar, Pak Solar, Dawood Lawrencepur, Solartech, and Skypower.

Japan International Cooperation Agency-Pakistan Planning Commission Islamabad

A solar park project is now being developed in the eastern province of Punjab, in conjunction with the Government of Punjab, Bank of Punjab and Chinese investment at a cost of US$5m. It is hoped, that once the infrastructure of transmission lines, water pipes, and roads is in place, private investment will pour in to build up initial capacity from 100MW to 1000MW.

Experts suggest the government can boost investment and demand, by bringing down costs for end-users: by removing various tariffs and duties charged on parts and equipment. Novel methods of financing the cost of development such as micro-financing, pay-as-you-go schemes; remittance backed funding and payroll deductions can be used, to circumvent the high cost of financing for private urban and rural households and enable take-up of solar power solutions.

Catching Up

Solar power use to address Pakistan’s energy crisis, can prove revolutionary; the lack thereof (solar or otherwise) can prove equally disastrous, as we have seen recently in countries around the world when desperate, frustrated citizens have turned to violent protest. India, says Kazmi, is at least a couple of decades ahead of Pakistan, as far as solar power investment is concerned with a grid connected solar power capacity of 2208 MW. Others, such as Saudi Arabia, are rushing to get ahead, especially those dependent on fossil fuels were demand is fast outstripping supply creating a scenario, where the country could become a net importer of oil by 2030. The government has therefore announced an atomic and renewable energy roadmap, aimed at generating at least one fifth (41GW) of its energy demand via solar power by 2032 (10). According to a report by consulting firm ClearSky Advisors, if realized, this target would place Saudi Arabia in the top 5 solar energy producers in the world (currently consisting of Germany, Italy, Spain, Japan and China).

Interestingly, although Bangladesh is also considered ahead of Pakistan in solar power, comparing the two makes no sense, says Kazmi. Where 80% of Bangladesh is off-grid, demand is primarily for solar lanterns to replace kerosene lamps or for limited use, such as to power light bulbs. But policy focus is strong and resolute, putting the country on a ‘high growth trajectory’ of solar power through a number of initiatives aimed at electrifying homes; improving agricultural production; and establishing small and medium sized power plants across the country to power railway stations, government offices and factories (11).

Rooftop solar panel – Khulna, Bangladesh, 2010 (MajorityWorld/UIG/GettyImages)

Regulatory clarity could be the key

The ‘energy’ situation in Pakistan has become untenable, with residential demand accounting for half of total electricity consumption.There is, thus, fresh emphasis on the renewable energy sector driven by the realization, that with demand for electricity far outstripping supply, the current situation is also extremely dangerous. The government needs to urgently address the regulatory environment governing the solar energy sector, to stimulate demand for solar power and drive investment in the sector.

Razya Kirmani is a London-based, freelance writer and blogger interested in science, education, current affairs and developments in the Muslim world. She is an incorrigible optimist.

References

(1) Pakistan Renewable Energy Society: http://www.pres.org.pk/category/re-technologies/solar-energy/

(2, 11) Lighting Asia: Solar Off-grid Lighting, May 2012: International Finance Corporation (Online) Available from:

http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/ifc+sustainability/publications/publications_report_lightingasia

(3) Alahdad, Z. Pakistan’s Energy Sector – From Crises to Crises – Breaking the Chain, 2012: Pakistan Institute of Development Economics (Online) Available from:

http://www.pide.org.pk/pdf/publications/Monograph/Pakistans%20Energy%20Sector%20From%20Crisis%20to%20Crisis-Breaking%20the%20Chain.pdf

(4) Pakistan Energy Yearbook, 2012: Hydrocarbon Development Institute Pakistan (Online) available from:

http://www.kpkep.com/documents/Pakistan%20Energy%20Yearbook%202012.pdf

(5)National Power Policy, 2013, Ministry of Water and Power, Gov’t of Pakistan (Online) Available from:

http://www.ppib.gov.pk/National%20Power%20Policy%202013.pdf

(6) Thomson Reuters Foundation, Pakistan turns to solar energy as power shortfall widens, 2014 (Online) http://www.trust.org/item/20140116230113-87r9a/

(7) The Guardian, Pakistan Parliament turns to Solar Power, 2014 (Online): http://www.theguardian.com/environment/2014/jan/20/pakistan-parliament-turns-to-solar-power

(8) Japan International Cooperation Agency, Press Release (Online) http://www.jica.go.jp/pakistan/english/office/topics/press120529.html

(9) Associated Press of Pakistan, 22 Solar Power Projects of 772.99 under development, 2014 (Online): http://www.app.com.pk/en_/index.php?option=com_content&task=view&id=266473&Itemid=2

(10) Ghaban, A. Saudi Arabia’s Renewable Energy Strategy & Solar Energy Deployment Roadmap,2010, Royal Order (King Abdullah City for Atomic and Renewable Energy – 2010)(Online) Available from: https://www.irena.org/DocumentDownloads/masdar/Abdulrahman%20Al%20Ghabban%20Presentation.pdf

Additional Reading

i. Triple Bottom-Line Magazine: http://www.tbl.com.pk/the-feasibility-of-renewable-energy-in-pakistan/

ii. Aftab, S. Pakistan’s Energy Crises: Causes, Consequences and Possible Remedies, 2014 (Online) Available from:   (http://www.peacebuilding.no/eng/Regions/Asia/Pakistan/Publications/Pakistan-s-energy-crisis-causes-consequences-and-possible-remedies/(language)/eng-US

iii. KACARE: http://www.kacare.gov.sa/en/

The term ‘petrodollars’ may simply mean money earned from the sale of oil, but that it is not all that it implies. It is a loaded and political term used almost always in reference to Middle Eastern oil producers and often suggests quick and maybe even undeserved returns without thought to long-term impact.

So it would come as a surprise to many, when that very same denigrated wealth – the petrodollar – is being invested in the clean energy and sustainability-focused innovation, that humanity needs to overcome the challenges posed by climate change. And by the oil producing Arab states, no less.

But that is what is being witnessed in parts of the Arab Gulf – large scale ‘petrodollar-funded’ investment in research and development in an area that in essence, aims to one day put the petrol industry out of business.

Clean energy initiatives in the Gulf

Energy initiatives

In 2006, the United Arab Emirates established the Masdar Initiative, to invest in renewable energy and clean technology, and today it has three business units and an independent post-graduate research institute under its umbrella, to further its goals. It’s Masdar Institute of Science and Technology, in particular, has the objective of evolving collaborative research and development capability in advanced energy and sustainability.

Across the border in Saudi Arabia, the King Abdullah University of Science and Technology was founded in 2009, with the largest endowment ever witnessed for a university – $20 billion. It too, has a goal of producing new innovative technology and high-value human capital, with its Solar and Photovoltaic Engineering Research Center in particular focusing on renewable energy technologies.

Nearby, the Qatar Foundation established the Qatar Environment and Energy Research Institute in 2011, to conduct and coordinate research that addresses energy and environmental issues, while the Qatar Science and Technology Park, aims to serve as a business hub and incubator for related industries.

The Middle East and North Africa solar power sector alone, could see investments up to $50 billion by 2020, the Middle East Solar Industry Association and Meed Insights MENA Solar Energy Report estimated. Considering that these three countries jointly are only about the size of Algeria with combined population of less than 40 million, that is a lot of renewable-energy focused investment.

Economic pragmatism at work

There are sound reasons for it. A major reason is pragmatism: the oil and gas that has provided the major portion of the national wealth for these states, will run out eventually. Saudi Arabia, believed to have the second largest oil reserve in the world, may run out of oil as early as 2030, according to a report from Citigroup in 2012. What does an economy that was powered by ‘petrodollars’ do when it has no more petrol to sell? If it does not have other high-value products and services to offer the global market, the simple answer is, it shrinks. Rather than see their economic development falter, forward-thinking Gulf States are investing today in alternative products, to continue to fuel their economic engines tomorrow.

Yet, why pick sustainable energy and clean technologies for economic diversification? Because it makes good economic sense. While there may be lower hanging fruits – industries that are less risky with stable returns– no sector offers as large of potential profit and caters to so massive a global market as sustainable energy. Energy is a product that every government and every industry needs in secure and affordable supply. The Gulf States are hoping to be among those, who can provide that through alternative energy technologies, and reap the resulting rewards. “You’re seeing countries like UAE make substantial investments in renewables because they realize that clean energy is going to be one of the largest growth industries of the 21st century,” Amit Ronen, the director of the George Washington University Solar Institute, told Aljazeera news.

An opportunity to create science and technology for the future

Petro-Dollars

But the most dynamic and compelling reason behind the why Arab petrodollars are funding renewable energy and clean technology, is opportunity. Research and development (R&D) in technology, is an expensive undertaking, particularly that, which looks to bring about massive shift changes and innovation. In this post-global recession reality, fewer governments have the available financial resources to invest in the costly and high-risk realm of advanced sustainable technologies and clean renewable energy.

The US – long time global R&D investment leader – will only be increasing federal R&D funding by 1.2 percent in 2015 (White House Office for Science and Technology Policy, 2014), with an overall decreasing trend in R&D investment as a percent of GDP, estimated at 2.77 in 2011 (World Bank). Europe is similarly flagging; the UK R&D spending overall fell 3% while the rest of the European Union invests a mere 2.06% of its GDP in R&D (Office for National Statistics, 2014).

“Where the west has retrenched, Asia has advanced,” the Batelle 2014 Global R&D Funding Investment report states. While Japan has been the historic Asian R&D giant, China has been gaining ground, and is expected to surpass US R&D funding by about 2022 (Martin Grueber, 2013). It is in that shifting balance, that the Gulf States are carving out their position today with their renewable energy and clean technology focused R&D investment. By leveraging their financial reserves, they are developing the new technology, systems and highly-trained human capital that world will need in the energy-constrained, climate change-beset future, securing for themselves and their people a continuing source of prosperity.

With the strength of these motivations and the breadth of the investment and support for renewable energy and advanced sustainable technologies in the Arab Gulf, the coming decades will serve to be the proving period for this bold new economic experiment.

Given the growing severity of climate change impacts, the world already needs green innovation, petrodollar funded or otherwise. If the revenue gained from fossil fuel sales can be used to help mitigate their impact on the environment, all the better.

Zarina Khan is a Massachusetts Institute of Technology Knight Science Journalism Fellow working in science communication in the United Arab Emirates.