Government hopes FIT will bring 1.5GW

PAKISTAN: The Pakistani government is targeting massive growth in its wind sector in 2012, using a lucrative limited availability feed-in tariff (FIT) to finance projects that will boost installed capacity from the current 6MW to up to as much as 1.5GW.

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Following the introduction of a FIT in October 2011 that is the second-most generous in Asia after Sri Lanka, officials from Pakistan's Alternative Energy Development Board (AEDB) said last month they were targeting eight 50MW wind projects to reach financial close by June.

Pakistan is crippled by daily power shortages and has racked up debt of more than $3 billion by importing large amounts of gas and oil. The country has substantial wind resources and the government has made wind-sector growth a strategic priority for improving Pakistan's energy security.

The AEDB has approved 19 projects of 50MW each and is assessing feasibility studies for a further 13 proposals totalling 650MW. All projects approved so far are in the country's southern Sindh province, which has some of the best wind resources and also contains Karachi, Pakistan's largest city and demand centre.

AEDB officials hope that by making a generous FIT only available this year, construction will begin on a large number of projects, bringing total installed capacity to 1.5GW by 2013. The FIT pays PKR 12.61/kWh (US$0.15) for foreign-financed projects and PKR 17.28/kWh for locally financed projects, but is limited to a total of 1.5GW and may be shut down at the end of 2012.

To encourage rapid commissioning of wind farms, a project is only eligible for the FIT if its financing is closed within 12 months of contracts being awarded and is completed in 18 months.

Following announcement of the FIT, research firm Make Consulting said it expected a significant increase in the Pakistani wind market in the near term, with growing involvement of Chinese companies to support the emergence of a major wind market in the region. Norwegian developer NBT, which has 650MW of projects planned in Pakistan, issued tenders to Sinovel and Goldwind to supply its first 150MW scheme. However, western turbine manufacturers such as Vestas, GE and Nordex have led the way so far.

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