Solar panel prices drop to record lows in Pakistan

That’s incorrect. The government is paying for unused electricity and have committed in writing that in case of failure to make a payment, the government can be sued in the International court outside Pakistan.

The terms for each IPPs varies as we have about 42 IPPs in Pakistan alongside many other partners in the energy sector

I've been doing some reading, the Benazir government gave sovereign guarantees to the IPPs in 1994. I couldn't find any information on when the contracts expire or if we are stuck in this for ever? How can a government make agreements like this, even if they were desperate, 10 year agreements would have suited them or create a break clause stating Pakistan has to pay a certain amount of compensation to dissolve the contract. It's like giving navy base to some nation for ever or make agreements on never to explore natural resources in your own nation for economic investments. I started to wonder what agreements we made with the British Empire for our freedom in 1947?
 
The government is paying for unused electricity
I found this:


But the numbers are staggering. For example:
"The defence budget is Rs2,200 billion, while capacity charges are Rs2,600 billion."

That doesn't make any sense. How can the entire Pakistan military run with smaller budget than payment for unused power?

Also, what does:

52% of IPPs are government-owned and 20% are Chinese-owned.

mean? Government is paying 52% of capacity charges to itself? Also, who are the non-government, non-Chinese IPPs?
 
I found this:


But the numbers are staggering. For example:
"The defence budget is Rs2,200 billion, while capacity charges are Rs2,600 billion."

That doesn't make any sense. How can the entire Pakistan military run with smaller budget than payment for unused power?

Also, what does:

52% of IPPs are government-owned and 20% are Chinese-owned.

mean? Government is paying 52% of capacity charges to itself? Also, who are the non-government, non-Chinese IPPs?
You need to know the history of IPPs to understand this problem and its 3:30am in UK right now.

Some IPP projects are too small and many are very large but in total they are 42 projects. Not all of them are making losses but most of them are…

Some of them are owned by Pakistani companies like Engro, Bank Al-Habib and many of them are owned by Pakistani politicians like Jahangir Tareen, Salman Shehzbaz Sharif etc.

But these are mostly small IPP projects compared to some owned by non-Pakistanis. There have been several contracts of IPPs but most of them were signed in 1993, 2002 and 2016 as far I remember. The ones originally signed in 1993 are expiring between 2024-2030 and the ones signed in 2002 will expire between 2030-2035.

The ones signed in 2016 were part of the CPEC and will take another generation of Pakistanis to finally see them retired but very likely we will have signed more IPPs by then
 
It won’t…

It will instead put more pressure on the government. The reason is we are under the contract by IPPs that whether we need the power generation or not, the government is bound to buy the units from the IPPs.

Less demand means more bill for the government to pay for unused electricity unless the government is able to grow the electricity demand and consume these extra units
Wrong.
There is no way that a growing population can't consume that production.

Mind you, the agreements are done in past for a fixed amount of electricity generated while population and it's needs are growing by the year.

Moreover, home based solar power will reduce load on the system reducing load shedding.

Note: Home based solar power generation (at individual levels) isn't as profitable as people assume
 
Wrong.
There is no way that a growing population can't consume that production.

Mind you, the agreements are done in past for a fixed amount of electricity generated while population and it's needs are growing by the year.

Moreover, home based solar power will reduce load on the system reducing load shedding.

Note: Home based solar power generation (at individual levels) isn't as profitable as people assume
1) We have installed capacity of about 47,000mw and the average consumption is about half of that. Although the demand rises from time to time but our grid system isn’t capable enough to do load balancing as it would trip

2) Imagine 8000mw of solar panels added in just 1 year by the household. No idea how many thousands of MW of solar panels are already installed

2) When big contracts are signed for example someone is investing 100 billion rupees, it wants to make sure that it doesn’t make losses. So the government will incite them with the offers of we will buy 70% of the installed capacity at all times even if you don’t produce it.

But now we have too much electricity, at some places we have a shortage of electricity but a poor national grid system. So we can’t balance it out everywhere
 
Pakistan has various layers of issues in power generation. While the power plants is one issue, the IPPs is a bigger issue and probably the national grid is even a bigger issue.

We have a national grid but it’s not very reliable and mostly old grid which often trips if the load is approaching 100% of the capacity. We need to invest 10 billion usd for grids only before any chance of having load balancing ideas
The power crunch is not exclusively a power plant problem; the impact of power resource management is very significant.

We know:
Power generation area. Solar power and hydropower are severely limited by weather and region, thermal power generation causes great environmental pollution, and nuclear power generation has huge safety factors. Each type of power generation has corresponding limitations.
Electricity Consumption Area. The difference in electricity consumption between different regions and different times is very large.

In China. The eastern region is economically developed and consumes huge amounts of electricity; the western region is economically backward and consumes very little electricity. However, the western region has a lot of resources needed for clean energy (solar power and hydropower). That's why China has the super project “West-East Power Transmission” to deploy a large amount of electricity from the west to the eastern developed regions.
In the western region of Sichuan, there are a lot of high-quality water conservancy power generation resources. In addition to some large state-owned hydropower plants, there are also numerous small and medium-sized private hydropower plants. In the early days, these private hydropower plants were not connected to the national grid, and their surplus power was directly wasted. Later, when Bitcoin became popular, it became the world's largest Bitcoin factory. After the Chinese government banned virtual currencies, all of these private hydroelectric plants were connected to the national grid.

In real-world gaming, it is easy for ongoing conflicts to occur between opposing sectors of the same power. Such conflicts can cause great disasters at some point.
If the power plant and the grid operator are organizations of equal strength, the tug-of-war between them can lead to power tension. If government departments do not deal with the situation in a balanced manner, or even participate in the tug-of-war, the situation will continue to deteriorate.
China had a similar situation in the early years. Back then, power grid operations were still set up by individual localities on their own, and there was no consolidated management. But power plants such as the Three Gorges Group and the Gezhouba Group were mega-corporations, and they were not at all subject to the management of local grid operators. It was not until the State Grid was merged and established that it was more massive than any of the power plants, which gave it a voice. No power plant had the ability to threaten the national grid.

Pakistan's power situation is similar to that of China a few decades ago. Pakistan needs a strong grid authority. Whether it is Pakistan's own grid company or the introduction of a Chinese “State Grid” company, the Government will need to do the work.

Of course, for balancing factors and national security, the State Grid Corporation is the largest grid management company in China, but it is not the only grid management company.
China Southern Power Grid Company is another grid management company. It is much smaller than State Grid. It mainly manages the regions of Guangdong, Guangxi, Yunnan, Guizhou and Hainan, and it also provides electricity to Hong Kong and Macau.
 
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