WIND ENERGY POWER PROJECT

DEVELOPMENT in

PAKISTAN

Sector Information Memorandum

INDUSTRY ANALYSIS

Pakistan has a great potential of Renewable Energy (RE).

Among all sources of RE, wind is widely and abundantly available in

Pakistan which can be utilized for generation of power. Government

of Pakistan (GoP) is taking keen interest to harness wind energy

potential and has taken strong measures to initiate wind power

projects in the country. GoP is focusing in the south, coastal belt, for

the development of wind energy in Pakistan. The foremost focus of

GoP is on Gharo - Keti Bandar wind corridor, where various projects

each of 50 MW capacity are in the different stages of development.

In the context of wind based power, GOP has guaranteed to

purchase all generated power.

Pakistan Meteorological Department has conducted a

detailed Wind Power Potential Survey of Coastal Areas of

Pakistan with the help of National Renewable Energy Laboratory

(NREL) USA. This study has identified potential areas where

economically feasible wind farms can be established.

Acknowledging the importance of Renewable Energy Technologies for

power generation, the Government of Pakistan created Alternative

Energy Development Board (AEDB) in May 2003 to act as the national

body on the subject of Renewable Energy. The main goal is to

introduce Alternative/Renewable Energy at an accelerated rate to

achieve 10 percent share of RE in the energy mix of the country.

AEDB has earmarked a potential wind power generation area

that cover 9700 sq. km in Sindh, with suitable average annual

wind speed of 7 m/s at 30 meters. The gross wind power

potential of this area is 43,000 MW.

SECTOR FEATURES

Wind data analysis by AEDB of the area wind farms suggest that

the region is high potential area with the annual average wind speed

more than 7.3m/s at 80m (above ground level). Government of

Pakistan is giving the guarantee of variability of wind speeds (wind

risk) in this region. AEDB has developed benchmark wind speed table

for the region and GoP is taking guarantee of variability of wind speed

on this benchmark table. This, wind risk, guarantee by GoP will be

critical in securing smooth repayments of the debt amount to the

lending agencies during the operation of the project.

PROPOSED AREA

Wind data analysis and surveys of this region suggest that

Gharo - Keti Bandar wind corridor is one of the most promising areas

where wind power projects 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 farm construction. 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 a tidal

study needs to be done to know the tide patterns before installation

can be achieved.

The whole corridor is exposed to very strong South Westerly

winds, wind data analysis of the area suggest that, 80% wind is

blowing from south west direction. The site is easily accessible

through metallic roads. The elevation of the sites ranges from sea-

level to an elevation of 150m above sea level ( Jhimpir sites 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 into following 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 $