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Prospects of wind energy in Pakistan

The increasing demand of energy with the rising population and technological advances has

put immense pressure on the power generation sector. Globally today, hydrocarbons or the

non-renewable resources generate a major chunk of energy even with the availability of

multiple forms renewable resources, For energy deficient countries like Pakistan, the

situation is much worse as most of these hydrocarbons are inefficiently used to produce

electricity and the shortfall of power still remains one of the biggest challenges for the

country even in this technological age of 21stcentury.

In order for the country to cope up with this power deficit, it needs a significant support from

the immense opportunity of power generation through renewable resources like solar, wind,geo-thermal etc. The primary challenge in the renewable energy generation is still the high

initial investment, large scale storage capacity of power, access to uninhibited areas and

thereby the resultant high per unit cost of production of the energy that is eventually charged

to customer. The only was this cost can be recovered is if it matches the willingness to pay of

customer. Willingness to pay (WTP) indicates the ability of a person to pay for a good or

service. This is generally referred to as demand or effective demand as it relates to the

combined willingness and ability which enables the transfer of goods/services from firms to

the household. WTP can be illustrated as the downward sloping demand curve with

reinforces the law of diminishing marginal willingness to pay i.e. with high

demand/consumption of successive units, the marginal willingness to pay declines.

The subsequent information pertains to insights from the survey of around 250+ on the matter

of load shedding and an estimation of their willingness to pay for environmental friendly

energy generation. As illustrated in Exhibit 1, 63% of people own UPS (uninterrupted power

supply) followed by the 33 % people who use generator as backup power supply. Other

sources of backup power are a meager 3% (it includes power generation through renewable

resources primarily solar). Exhibit 2 isrelated to load shedding hours with has a mean of 10

hours per day, which is close to half a day. With high use of backup power supply due to

increased load shedding hours, 94% respondents commented that their power expenditure has

increased and constitutes of an average 30% of their monthly incomes (Exhibit 3 & 5). UPS

being the dominant backup power supply has been rated with 9 score by majority (10 being

the highest) with 10 score being the mode of the data set (Exhibit 4).

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Exhibit 7 further indicates the astonishing majority of 65% of respondents who have high

WTP for environmentally friendly energy generation given people whereas Exhibit 6

summarizes the respondents agreement of wind energy being a viable source of energy. But

the most extraordinary finding is that around 35% of the respondents agree to pay premium

and have high WTP to pay extra for environment protection out of the portion of their

retained earnings (Exhibit 8).

Even today, wind energy is amongst the cleanest (most environmental friendly) and most cost

competitive source for renewable power generation. New technological advances have

further made this venture cost effective in comparison to traditional methods for power

generation and it is fairly easy to achieve economies of scale through extension to this power

generation setup. This WTP for renewable power generation can also be enhanced through

more awareness and easy access to these technologies both for private and public sector.

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Exhibit 1 Exhibit 2

Exhibit 3 Exhibit 4

Exhibit 5

Ups

63%

Generato

r

33%

Invertor

1%

Other

3%

Alternative power supply

0

10

20

30

40

50

60

70

8090

100

0 - 4 5 - 8 9 - 12 13 - 16 17 +

No.ofResponses

Hours

Load Shedding Hours

Yes

94%

No

6%

Increase in power

expediture

0

10

20

30

40

50

60

70

80

5 6 7 8 9 10

No.o

fResponses

Rating Scale

Rating of Uninterrupted Power

Supply

0

10

20

30

40

50

0 - 10 11 - 20 21 - 30 31 - 40 41 - 50 51 - 60 61 +

No.ofResponses

% of monthly income

Power expense as % of Monthly Income

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Exhibit 6 Exhibit 7

Exhibit 8

Yes

74%

No26%

Wind Energy Viability

Yes

65%

No

35%

High WTP of

Eco-friendly power

0

20

40

60

80

100

0 - 10 11 - 20 21 - 30 31 - 40 41 - 50 51 - 60 61 - 100

No.ofResponses

% of Retained Earnings

Extra WTP from Retained Earning For Eco-friendly power