Microgrids: Key to lighting up Pakistan’s rural areas

 

Governments, private developers, and NGOs throughout the world are increasingly pursuing micr grids to electrify communities that are unlikely to be served in the near or medium term by extension of central grid. These microgrids provide a range of services, from residential lighting alone to entertainment, refrigeration and productive commercial uses like milling. Their flexibility in terms of sizing, resource utilization and management makes them highly adaptable to local needs and conditions.

In Pakistan, the penetration of microgrids, except in the northern part of Pakistan, remain low as business models for commercially viable operations of off-grid RE projects are not well established. Very few microgrid projects were found to be sustainable in the long run as they relied heavily on grants and subsidies from the government and/or donor agencies falling into problems of inadequate operation and maintenance and lack of cost recovery.

Notwithstanding these issues, increased deployment of microgrids in the country can play a pivotal role in powering un-served and underserved communities in remote locations where otherwise grid extension can be financially unviable.

Microgrids employ various generation resources that include diesel, solar photovoltaic (PV), micro-hydro, and biomass gasification, as well
 as hybrid technologies such as wind-diesel and PV-diesel. In provinces such as Sindh and Balochistan, where solar irradiance is the highest and pockets of high speed winds are found, solar and wind hybrid microgrids can be set up to electrify remote and dispersed communities. Similarly in the north, where there is abundance of hydel potential, micro-hydels can serve the same purpose.

In order to increase deployment of microgrids for rural electrification in Pakistan, following gaps would have to be addressed:

  • The microgrid must be designed to deliver sufficient power to its customers to benefit from the energy services or else they will shift to alternative sources of energy.
  • The microgrid must adhere to its stated operation schedule – aligned with customer preferences and needs. The less often a microgrid adheres to its operation schedule, the less successful it would be.
  • Financial viability of the microgrid is essential for its long-term sustainability. It is critical that the microgrid balances incentives/subsidies and revenue streams from tariffs with debt, equity, and operational expenses obligations both in the short and long run
  • Adequate and timely operation and maintenance of the system is important for continued reliability of the microgrid, which in turn depend on sufficient tariff collection. The developers must incorporate a penalty mechanism to enforce payment as inadequate tariff recovery can trigger off the vicious cycle.
  • For long term sustainability is it important that the energy services provided through microgrids are linked to income generation i.e. the microgrid must have capacity and reliability sufficient enough to enable new enterprises within the community.
  • Local training and institutionalization is imperative with partially subsidized or fully subsidized business models. For this local labour should be hired for operation and maintenance of the microgrid and the ownership of the system must reside with its beneficiaries. Examples of this are found in Gilgit-Baltistan and KPK whereby the government develops micro hydel stations and transfers their ownership to the communities being served. The local labour is trained to operate the station and to ensure collections, which are used for paying the O&M costs including salaries of staff.

In Pakistan, more than 32,000 villages in the country continue to remain without access to the electric grid, forcing the residents to use traditional sources of energy, including firewood, kerosene and diesel, for meeting their lighting, heating and cooking needs. For majority of these villages, extending the electric grid will continue to be a challenge due to the cost of infrastructure involved. In such areas, microgrids and stand alone systems can provide a viable alternative to building expensive thermal power projects and transmission/distribution lines.

However, lack of knowledge and exposure to proven practices available around the world has created regulatory, commercial, and implementation barriers holding up expansion of energy access programs in the country. For example, solar pv and energy storage offers opportunity for developing countries to leapfrog the electric grid. Changes in regulatory and policy frameworks are however required for incentivizing deployment of such technology.

This is where role of multilateral/bilateral institutions such as World Bank, Asian Development Bank and USAID comes in. They can help governments develop support mechanism for attracting private investment in future technologies especially those, which can directly benefit the vulnerable. The objective should be to eventually make it viable for private sector to invest in energy access as Pakistan’s public sector does not have the capacity and the financial resources to accomplish the universal energy access goal on its own.

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