Government likely to launch new-look Feed-In Tariff FIT to spur renewables roll-out

Karachi: The government is likely to unveil a new renewables Feed-In Tariff FIT next month as it looks to narrow its economically-crippling energy gap.FIT was first launched in year 2006, but the package bore little fruit and the country still has just 6MW of operational wind capacity.

The new FIT is aimed at jump-starting renewables in a nation that faces a 3-4GW energy shortfall, made worse by devastating floods in 2010. In sharp contrast to Pakistan’s paltry wind portfolio, neighbouring India had more than 13GW installed at the end of 2010, according to Global Wind Energy Council.

While new FIT rates have not been spelled out, Alternative Energy Development Board says investors will be able to net internal rates of return of up to 18% under the new support regime.

The government has already given the go-ahead to 1.5GW of projects, with several developers near to reaching financial close. These include Turkish utility Zorlu Enerji and China International Water & Electric. Zorlu Enerji’s 49.5MW project near Hyderabad will be Pakistan’s first privately-owned wind farm.

Industry figures say attitudes towards wind energy have shifted dramatically in developing countries like Pakistan in recent years, as officials come to grips with the immense opportunity wind brings for rapidly adding generation capacity. Pakistan has a target of a 5% share of power from renewables by year 2030.

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