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Following are the SROs that are related to import of Renewable / Alternative Energy Equipments. CUSTOMS DUTY: SRO 575(I)/2006 dated June 05, 2006 (Complete Updated SRO) SRO 477(I)/2011 dated June 03, 2011 SRO 448(I)/2011 dated May 21, 2011 SRO 394(I)/2010 dated June 05, 2010 SRO 484(I)/2009 dated June 13, 2009 SRO 654(I)/2008 dated June 23, 2008 SRO 554(I)/2008 dated June 11, 2008 SRO 474(I)/2008 dated May 21, 2008 SRO 654(I)/2007 dated June 29, 2007 SRO 490(I)/2007 dated June 09, 2007 SALES TAX: SRO 369(I)/2011 dated May 07, 2011 FEDERAL EXCISE DUTY: SRO 370(I)/2011 dated May 07, 2011

Renewable Energy Scenario of Pakistan

Pakistan is an oil importing country and its economy suffers the most by the oil prices inflict. Majority of its power generation is thermal with furnace oil, high-speed diesel and natural gas as fuel; coal is almost now existent. Because of fast growing economy and population the demand of energy is rapidly increasing. The electricity generation capacity in Pakistan is over 20,000 MW. This is not enough to meet our electricity demand. According to GOP estimates the generation capacity needs to grow by 50% by 2010 in order to meet the expected demand.

The importance of renewable energy cannot be ignored; the biggest challenge facing renewable energy technologies is to excel in state of the art technologies where more renewable options can generate energy at cost, that are competitive with conventional sources. During the last twenty years, Pakistan has not shown quite significant developments in Renewable Technologies. Photovoltaic technology is being used in Pakistan for rural electrification, telephone exchanges, repeater stations, highway emergency telephone, centers, and refrigeration of vaccines. Solar panels in different powers and sizes are available in the local market, which are imported from America, Europe, China and also being fabricated in the country. PCRET has designed and developed solar water-heaters, solar cookers, solar dehydrator and solar desalination plants. Solar dehydrators are being used in the northern areas for drying of fruits and vegetables. Solar water heaters are also available in the market, which are imported from America, Australia, Europe, China and are also manufactured locally. PCRET is main agency involved in the installation of biogas plants in the country, which are locally manufactured in the country. Pakistan Council of Renewable energy Technologies (PCRET) and Agha Khan Rural Support Programme (AKRSP) are also involved in the installation of micro hydel plants in the northern areas and NWFP. They have designed and developed micro hydel turbines, which are fabricated through local manufacturers. The wind turbines are imported from abroad, but the micro turbine fabrication facilities are established in the country.

Pakistan is endowed with various renewable energy resources such as hydel,  solar,  wind,  geothermal and bio-fuel. It can earn dividends if these resources are explored, exploited and developed properly. Hydropower source of energy is well known in Pakistan and there is ever growing experience in the sector to develop the hydro-power potential indigenously in the country. Hydro-potential is estimated at about 50,000 MW, out of which about 6595MW has been developed. Pakistan lies in an area of one of the highest solar insulation in the world. The average solar radiation is 5.5 KW/m2 and there are more than 300 clear days. Wind energy is another important area where Pakistan can benefit by exploiting it in efficient manner. The wind potential is estimated upto 50,000 MW. Urban areas of Pakistan generate over 55000 tonnes of solid wastes daily. There are 56.9 million animals (Buffaloes, cows) in Pakistan, which can generate 21.35 million M3 biogas and 36.0 million tonnes of biofertilizer per day. The creek systems of Indus Delta extends over an area of 170 Km. It is estimated that about 100 KW power can be produced from the source. There are more than 6000 surface indications of geo-thermal energy resources with an estimated potential of 800,000 KW.

In Pakistan most of the research, development, promotion and dissemination work in the field of renewable energy is carried out by Public Sector Organizations because of lack of such capabilities in the private sector. Pakistan Council of Renewable Energy Technologies (PCRET) and Alternate Energy Development Board (AEDB) are playing a major role in promoting the development of infrastructure for RE power generation in the country. However, small section of Pakistan Council of Scientific and Industrial Research (PCSIR), Agha Khan Rural Support Programme (AKRSP), National University of Science & Technology (NUST), GIK Institute of Engineering & Technology, COMSATS Institute of Information Technology and National Center for Physics and some departments of Universities are involved in the research and development of renewable energies in Pakistan.

Renewable Energy account for 180 MW of Pakistan’s present power output, small to medium size hydropower plants offer the greatest renewable energy potential for Pakistan. The solar potential is estimated over 100,000 MW. Possibilities also exist in promoting greater use of wind, solar and biomass project. The GOP had approved the policy for development of Renewable Energy for power generation – 2006. According to this policy the wind and solar energy will be developed in the country to meet at least 5% of the total installed capacity through RE resources by 2030 (i.e. 9700 MW). Furthermore, 7,874 remote off-grid villages in province of Sindh and Balochistan will be electrified through Renewable Energy. Biodiesel will be gradually blended with petroleum diesel to achieve a maximum share of 5% by volume of the total diesel consumption in the country by the year 2015 and 10% by 2025.

Development of the power generation potential of existing RE sources, solar, biomass, microhydel and windmills, offers substantial business opportunities for manufacturers and exporters. American companies already dominate the foreign-owned portion of the local RE power generation market with almost 25 per cent of market share, followed by European and Chinese companies, which have 10 per cent and 5 per cent of market share respectively. The remaining 60 per cent of current power is in the hands of domestic companies the main challenge faced in the execution of wind projects is the availability of equipment. Wind turbines are not available off the grid in the world market. This is due to the fact that United States has an extensive wind energy programme that offer tax rebate. All leading manufacturers of wind energy equipment have fully committed existing supplies to the American market.

The international donor agencies like Asian Development Bank (ADB), German Agency for Technical Corporation (GTZ), United Nations Development Programme (UNDP), European Union (EU-Asia) and World Bank have launched various projects for the promotion, utilization and development of renewable energy technologies within the country. The GOP should make strategies to encourage the stakeholders of Public and Private Sector by making a pragmatic National Policy for the development of alternate and renewable source of energy.

Alternative Energy Development Board (AEDB) with the help of renowned international experts / agencies such as United Stated National Renewable Energy Laboratories (NREL), GIT from Germany and Risoe from Denmark, has identified the RE potential as follows:

  • Wind                                             340,000 MW
  • Solar                                             2,900,000 MW
  • Hydro (Large)                           50,000 MW
  • Hydro (Small)                           3,100 MW
  • Bagasse Cogeneration            1,800 MW
  • Waste to Power                         500 MW
  • Geothermal                                500 MW

Energy Scenario

The economic stability of developing countries like Pakistan depends upon the growth of the energy sector to influence social prosperity and long-term planning for utilization of domestic energy resources. Pakistan has been facing an unprecedented energy crisis since last few years. Its current energy demand far exceeds its indigenous supplies, fostering dependency on imported oil that places substantial burden on economy of the country.

In order to ensure security of country’s energy supplies, the Government of Pakistan is pursuing policies of increasing our domestic supplies, attracting foreign investment, diversifying imports to include natural gas, coal and electricity, encouraging economic inter-fuel substitution, promoting energy efficiency and renewable energy, and supporting regional and interregional cooperation. Pakistan is an ideal location for foreign private investment in the upstream and downstream hydrocarbon sectors as it provides a deregulated transparent and level playing field to all.

During financial year 2009-10, primary commercial energy supplies witnessed an increase by 0.8% (from 62.6 million tonnes of oil equivalent (mtoe) in 2008-09 to 63.1 mtoe in 2009-10). Increase in the supplies came from natural gas (0.6 mtoe), nuclear electricity (0.3 mtoe), hydel electricity (0.1 mtoe) and imported electricity (0.01 mtoe). Supplies from oil, coal and LPG showed decrease as compared to the last year. The share of natural gas in primary energy supplies during 2009-10 was 48.8% followed by oil 31.4%, hydro electricity 10.6%, coal 7.3%, nuclear electricity 1.1%, LPG 0.6% and imported electricity 0.1%.

Natural gas production during this year increased from 4,002 to 4,063 million cubic feet per day (1.5% increase) while oil production decreased to 64,948 from 65,845 barrels per day (1.4%). The drilling activity showed slow progress as compared to the preceding two years. During 2009-10, 26 exploratory wells were drilled as compared to 27 in 2008-09 and 2007-08. The number of development wells drilled during 2009-10 was 42 as against 59 during 2008-09 and 53 during 2007-08. The drilling efforts resulted in 15 discoveries mostly of gas/condensate, out of which 7 were by OGDCL and 8 by the private sector companies.

Oil consumption increased by 7% during 2009-10 over the preceding year. This increase was due to 27% increase in motor spirit consumption in transport sector and 16% increase in furnace oil consumption in power sector over the last year. The consumption of E-10 fuel was also added in the transport sector this year. The consumption declined in domestic, agriculture and other government sectors by 7%, 17% and 12% respectively. Consumption of furnace oil in cement industry dropped by 41% from 105,424 tonnes in 2008-09 to 61,787 tonnes in 2009-10.

Import of petroleum products increased by 12% while the crude oil decreased by 15% as compared to the previous year. This increase in POL import was mainly due to increase in imports of furnace oil, motor spirit and aviation fuel by 10%, 132% and 140% respectively during 2009-10. The refineries production was down by 8% resulting in production of 21%, 29%, 19% and 11% less quantities of Kero, diesel furnace oil and naphtha respectively, during 2009-10 as compared to the preceding year.

Natural gas consumption increased slightly by 1% during 2009-10 as compared to the previous year. This increase in consumption was due to fertilizer 22%, transport 12%, industry 5%, commercial 4% and domestic 3%. Natural gas consumption decreased during 2009-10 in cement industry by 73%, Pakistan Steel Mills by 7% and power sector by 9% over the previous year.

Coal production decreased by 7% in 2009-10 over the previous year due to lesser production from Balochistan and KPK coalfields. Coal imports have increased slightly by 0.13% resulting in overall decrease in coal supplies/consumption by 3% over the last year. Consumption of coal in power generation increased by 12% from 112,520 tonnes in 2008-09 to 125,482 tonnes in 2009-10.

In the power sector five new IPPs (Atlas, Engro, Orient, Nishat and Saif power) were commissioned during 2009-10. This helped increase the installed capacity of thermal power plants by 1,089 MW during 2009-10.

Electricity generation during 2009-10 increased by 4.1% (with major increase of 79% in nuclear generation) over the last year and reached 95,608 GWh (including 249 GWh of electricity imported from Iran). Electricity generation included 67.3% thermal, 29.4% hydel, 3.0% nuclear, while 0.3% of the electricity was imported this year. Electricity consumption increased by 5.7% to 74,348 GWh during 2009-10 as compared to 70,371 GWh last year. Major increases in consumption were in the domestic sector (1990 GWh), agriculture (894 GWh), industry (494 GWh), commercial (354 GWh) and bulk supplies (241 GWh). T&D losses of public sector power system were reduced from 21.6% to 20.6% during 2009-10.

Global Scenario

According to the International Energy Outlook 2011, world marketed energy consumption grows by 53 percent from 2008 to 2035. Total world energy use rises from 505 quadrillion British thermal units (Btu) in 2008 to 619 quadrillion Btu in 2020 and 770 quadrillion Btu in 2035 (Figure 1). Much of the growth in energy consumption occurs in countries outside the Organization for Economic Cooperation and Development (non-OECD nations), where demand is driven by strong long-term economic growth. Energy use in non-OECD nations increases by 85 percent as compared with an increase of 18 percent for the OECD economies.

Figure-1: World energy consumption, 1990-2035 (quadrillion Btu)

World energy markets by fuel type

In the long-term, projects increased world consumption of marketed energy from all fuel sources through 2035 (Figure 2). Fossil fuels are expected to continue supplying much of the energy used worldwide. Although liquid fuels—mostly petroleum based—remain the largest source of energy, the liquids share of world marketed energy consumption falls from 34 percent in 2008 to 29 percent in 2035, as projected high world oil prices lead many energy users to switch away from liquid fuels when feasible. Renewable energy is the world’s fastest growing form of energy, and the renewable share of total energy use increases from 10 percent in 2008 to 14 percent in 2035.

Figure-2: World energy consumption by fuel, 1990‑2035 (quadrillion Btu)

Liquid fuels

World use of petroleum and other liquids grows from 85.7 million barrels per day in 2008 to 97.6 million barrels per day in 2020 and 112.2 million barrels per day in 2035. Most of the growth in liquids use is in the transportation sector, where, in the absence of significant technological advances, liquids continue to provide much of the energy consumed. Liquid fuels remain an important energy source for transportation and industrial sector processes. Despite rising fuel prices, use of liquids for transportation increases by an average of 1.4 percent per year, or 46 percent overall from 2008 to 2035. The transportation sector accounts for 82 percent of the total increase in liquid fuel use from 2008 to 2035, with the remaining portion of the growth attributable to the industrial sector (Figure 3). The use of liquids declines in the other end-use sectors and for electric power generation.

Figure-3: World liquids consumption by sector, 2008‑2035 (million barrels per day)

To meet the increase in world demand, liquids production (including both conventional and unconventional liquids supplies) increases by a total of 26.6 million barrels per day from 2008 to 2035. It assumes that OPEC countries will invest in incremental production capacity in order to maintain a share of approximately 40 percent of total world liquids production through 2035, consistent with their share over the past 15 years. Increasing volumes of conventional liquids (crude oil and lease condensate, natural gas plant liquids, and refinery gain) from OPEC producers contribute 10.3 million barrels per day to the total increase in world liquids production, and conventional supplies from non-OPEC countries add another 7.1 million barrels per day.

Unconventional resources (including oil sands, extra-heavy oil, biofuels, coal-to-liquids, gas-to-liquids, and shale oil) from both OPEC and non-OPEC sources grow on average by 4.6 percent per year over the projection period. Sustained high oil prices allow unconventional resources to become economically competitive, particularly when geopolitical or other “above ground” constraints limit access to prospective conventional resources. World production of unconventional liquid fuels, which totaled only 3.9 million barrels per day in 2008, increases to 13.1 million barrels per day and accounts for 12 percent of total world liquids supply in 2035. The largest components of future unconventional production are 4.8 million barrels per day of Canadian oil sands, 2.2 and 1.7 million barrels per day of U.S. and Brazilian biofuels, respectively, and 1.4 million barrels per day of Venezuelan extra-heavy oil. Those four contributors to unconventional liquids supply account for almost three-quarters of the increase over the projection period.

Natural gas

World natural gas consumption increases by 52 percent from 111 trillion cubic feet in 2008 to 169 trillion cubic feet in 2035. Although the global recession resulted in an estimated decline of 2.0 trillion cubic feet in natural gas use in 2009, robust demand returned in 2010, and consumption exceeded the level recorded before the downturn. Natural gas continues to be the fuel of choice for many regions of the world in the electric power and industrial sectors, in part because its relatively low carbon intensity compared with oil and coal makes it an attractive option for nations interested in reducing greenhouse gas emissions. In the power sector, low capital costs and fuel efficiency also favor natural gas.

The major projected increase in natural gas production occurs in non-OECD regions, with the largest increments coming from the Middle East (an increase of 15 trillion cubic feet between 2008 and 2035), Africa (7 trillion cubic feet), and non-OECD Europe and Eurasia, including Russia and the other former Soviet Republics (9 trillion cubic feet). Over the projection period, Iran and Qatar alone increase their natural gas production by a combined 11 trillion cubic feet, nearly 20 percent of the total increment in world gas production. A significant share of the increase is expected to come from a single offshore field, which is called North Field on the Qatari side and South Pars on the Iranian side.

Contributing to the strong competitive position of natural gas among other energy sources is a strong growth outlook for reserves and supplies. Significant changes in natural gas supplies and global markets occur with the expansion of liquefied natural gas (LNG) production capacity and as new drilling techniques and other efficiencies make production from many shale basins economical worldwide. The net impact is a significant increase in resource availability, which contributes to lower prices and higher demand for natural gas in the projection.

Although the extent of the world’s unconventional natural gas resources—tight gas, shale gas, and coalbed methane—have not yet been assessed fully, a substantial increase in those supplies, especially from the United States but also from Canada and China. An initial assessment of shale gas resources in 32 countries was released by EIA in April 2011. The technically recoverable shale gas resources in the assessed shale gas basins and the United States amount to 6,622 trillion cubic feet. To put the shale gas resource estimate in perspective, according to the Oil & Gas Journal world proven reserves of natural gas as of January 1, 2011, are about 6,675 trillion cubic feet, and world technically recoverable gas resources— largely excluding shale gas—are roughly 16,000 trillion cubic feet.

Rising estimates of shale gas resources have helped to increase total U.S. natural gas reserves by almost 50 percent over the past decade, and shale gas rises to 47 percent of U.S. natural gas production in 2035 in the IEO2011 Reference case. Adding production of tight gas and coalbed methane, U.S. unconventional natural gas production rises from 10.9 trillion cubic feet in 2008 to 19.8 trillion cubic feet in 2035. Unconventional natural gas resources are even more important for the future of domestic gas supplies in Canada and China, where they account for 50 percent and 72 percent of total domestic production, respectively, in 2035 in the Reference case (Figure 4).

Figure-4: Natural gas production in China, Canada, and the United States, 2008 and 2035 (trillion cubic feet)

World natural gas trade, both by pipeline and by shipment in the form of LNG, is poised to increase in the future. Most of the projected increase in LNG supply comes from the Middle East and Australia, where a number of new liquefaction projects are expected to become operational within the next decade. Additionally, several LNG export projects have been proposed for western Canada, and there are also proposals to convert underutilized LNG import facilities in the United States to liquefaction and export facilities for domestically sourced natural gas. The world liquefaction capacity more than doubles, from about 8 trillion cubic feet in 2008 to 19 trillion cubic feet in 2035. In addition, new pipelines currently under construction or planned will increase natural gas exports from Africa to European markets and from Eurasia to China.

Coal

In the absence of national policies and/or binding international agreements that would limit or reduce greenhouse gas emissions, world coal consumption is projected to increase from 139 quadrillion Btu in 2008 to 209 quadrillion Btu in 2035, at an average annual rate of 1.5 percent. Regional growth rates are uneven, with little growth in coal consumption in OECD nations but robust growth in non-OECD nations, particularly among the Asian economies (Figure 5).

Figure-5: World coal consumption by region, 1990‑2035 (quadrillion Btu)

Strong economic growth and large domestic coal reserves in China and India lead to a substantial increase in their coal use for electric power and industrial processes. Installed coal-fired generating capacity in China nearly doubles in the Reference case from 2008 to 2035, and coal use in China’s industrial sector grows by 67 percent. The development of China’s electric power and industrial sectors will require not only large-scale infrastructure investments but also substantial investment in both coal mining and coal transportation infrastructure. In India, coal-fired generating capacity rises from 99 gigawatts in 2008 to 172 gigawatts in 2035, a 72-percent increase, while industrial sector coal use grows by 94 percent.

Electricity

World net electricity generation increases by 84 percent from 19.1 trillion kilowatthours in 2008 to 25.5 trillion kilowatthours in 2020 and 35.2 trillion kilowatthours in 2035. Although the 2008-2009 global economic recessions slowed the rate of growth in electricity use in 2008 and resulted in negligible change in electricity use in 2009, demand returned in 2010, led by strong recoveries in non-OECD economies. In general, in OECD countries, where electricity markets are well established and consumption patterns are mature, the growth of electricity demand is slower than in non-OECD countries, where a large amount of potential demand remains unmet. Total net electricity generation in non-OECD countries increases by an average of 3.3 percent per year in the Reference case, led by non-OECD Asia (including China and India), where annual increases average 4.0 percent from 2008 to 2035. In contrast, net generation among OECD nations grows by an average of 1.2 percent per year from 2008 to 2035.

In many parts of the world, concerns about security of energy supplies and the environmental consequences of greenhouse gas emissions have spurred government policies that support a projected increase in renewable energy sources. As a result, renewable energy sources are the fastest growing sources of electricity generation at 3.1 percent per year from 2008 to 2035 (Figure 6). Natural gas is the second fastest growing generation source, increasing by 2.6 percent per year. An increase in unconventional natural gas resources, particularly in North America but elsewhere as well, helps keep global markets well supplied and prices competitive. Future generation from renewables, natural gas, and to a lesser extent nuclear power largely displaces coal-fired generation, although coal remains the largest source of world electricity through 2035.

Figure-6: World net electricity generation by fuel type, 2008-2035 (trillion kilowatthours)

More than 82 percent of the increase in renewable generation is in the form of hydroelectric power and wind power. The contribution of wind energy, in particular, has grown swiftly over the past decade, from 18 gigawatts of net installed capacity at the end of 2000 to 121 gigawatts at the end of 2008—a trend that continues into the future. Of the 4.6 trillion kilowatthours of new renewable generation added over the projection period, 2.5 trillion kilowatthours (55 percent) is attributed to hydroelectric power and 1.3 trillion kilowatthours (27percent) to wind. The majority of the hydroelectric growth (85 percent) occurs in the non-OECD countries, while a slight majority of wind generation growth (58 percent) occurs in the OECD. High construction costs can make the total cost to build and operate renewable generators higher than those for conventional plants. The intermittence of wind and solar, in particular, can further hinder the economic competitiveness of those resources, as they are not operator-controlled and are not necessarily available when they would be of greatest value to the system. However, improving battery storage technology and dispersing wind and solar generating facilities over wide geographic areas could mitigate many of the problems associated with intermittency over the projection period.

Electricity generation from nuclear power worldwide increases from 2.6 trillion kilowatthours in 2008 to 4.9 trillion kilowatthours in 2035 as concerns about energy security and greenhouse gas emissions support the development of new nuclear generating capacity. In addition, world average capacity utilization rates have continued to rise over time, from about 65 percent in 1990 to about 80 percent today, with some increases still anticipated in the future.

There is still considerable uncertainty about the future of nuclear power, and a number of issues could slow the development of new nuclear power plants. Issues related to plant safety, radioactive waste disposal, and proliferation of nuclear materials continue to raise public concerns in many countries and may hinder plans for new installations. High capital and maintenance costs also may keep some countries from expanding their nuclear power programs. In addition, a lack of trained labor resources, as well as limited global manufacturing capacity for certain components, could keep national nuclear programs from advancing quickly. Finally, although the long-term implications of the disaster at Japan’s Fukushima Daiichi nuclear power plant for world nuclear power development are unknown, Germany, Switzerland, and Italy have already announced plans to phase out or cancel all their existing and future reactors. Those plans, and new policies that other countries may adopt in response to the disaster at the Fukushima Daiichi plant, although not reflected in the IEO2011 projections, indicate that some reduction in the projection for nuclear power should be expected.

75 percent of the world expansion in installed nuclear power capacity occurs in non-OECD countries (Figure 7). China, Russia, and India account for the largest increment in world net installed nuclear power from 2008 to 2035: China adds 106 gigawatts of nuclear capacity over the period, Russia 28 gigawatts, and India 24 gigawatts.

Figure-7: World nuclear generating capacity, 2008 and 2035 (gigawatts)