Experts Highlight Socio-Economic Benefits Of Future Renewable Energy Procurement
Transition to Auction-Based Renewable Energy
KARACHI: The Pakistan government has decided to move away from the “cost-plus” tariff regime to auction-based awards for future wind and solar power induction.
In this context, Renewables First, a think-tank for energy and environment, organised a webinar to launch a white paper highlighting the potential of renewable energy auctions and the risks if poorly designed.
Webinar and Expert Participation
The webinar featured local and international renewable energy experts, including government representatives and subject matter experts from the World Bank, Engro Energy, Wood Mackenzie, and Power Futures Lab, South Africa. Members of the Pakistan Renewable Energy Developers Forum also attended.
Key Insights from the White Paper
Ammar Qaseem, policy analyst at Renewables First, discussed global and local renewable energy tariff trends, Pakistan’s national energy context, and international best practices. He highlighted that almost 11 GW of renewable energy capacity is expected to be procured over the next eight years, offering Pakistan a chance to boost the local market, attract foreign investment, and maximise socio-economic benefits.
Aqeel Hussain Jafri, Director of Policy at the Alternative Energy Development Board (AEDB), noted that well-designed auctions provide a level playing field for local and international investors. He shared that the government plans to initiate the first bidding round by the end of June, focusing on cost reduction.
Global Perspectives and Recommendations
The white paper launch coincided with a World Bank study on Variable Renewable Energy (VRE) competitive bidding, providing recommendations on auction models, bidding frequency, and local design considerations.
Oliver Knight, Senior Energy Specialist at the World Bank’s South Asia Energy Unit, highlighted the importance of sub-station or park-based bidding to meet Pakistan’s renewable energy targets. Dr. Fatima Khushnood of Engro Energy emphasised the need to revive investors’ confidence amid sector transformations.
Dr. Wikus Kruger, research lead at the University of Cape Town’s Power Futures Lab, recommended starting with a smaller volume in the first bidding round and maintaining consistency to mitigate risks.
Sohaib Malik, Principal Analyst at Wood Mackenzie, suggested that Pakistan carefully identify comparable countries and consider its resource-constrained context to design effective and viable renewable energy auctions.
Original article: The News