Power sector transition in Balochistan

Introduction

Map of Pakistan, as originally published by the University of Faisalabad. Balochistan is the largest province in the country, making up approxiately 40% of Pakistan's total land area.

Districts and Divisions of Balochistan, Pakistan. Originally published by the Institute for Development Studies and Practices Pakistan.

Pakistan has a total installed capacity of 34.5 GW, with thermal generation making up 66% of that total. An estimated 3.0 terrawatts (TW) of renewable energy potential exists across the country (2900 GW solar, 340 GW wind, 60 GW hydropower), though Pakistan is heavily reliant on fossil fuel imports, with 40% of energy supply imported. Natural gas is expected to increase its share in total energy supply by 2030, while biomass is expected to decrease. 25% of Pakistan's population not grid-connected and lacks access to the national electricity network. Coal in Pakistan is primarily produced in Punjab, Sindh, and Balochistan, the last of which contains 617 million tons of coal within its coalfields. The Balochistan refinery single-point mooring terminal is a major location for oil imports, with an estimated capacity of 14 million tons per annum.

Pakistan tends to suffer from power shortages and load shedding is common, especially in Balochistan. Load shedding reaches 8-10 hours per day in urban areas and up to 20 hours in rural communities. Balochistan experiences an average of 8-12 hours of load shedding per day. While Balochistan is the largest Pakistani province by area, it has a low population density, leading to 72.4% of the Province's residents living in rural areas and villages. This low demand, coupled with the relative expense of necessary infrastructure, has led to a lack of traditional energy transmission in Balochistan. Deployment of variable renewable energy may help low-demand areas gain electricity access.

Three primary challenges exist which hinder renewable energy development in Balochistan:

1. Public understanding: Awareness campaigns must focus on providing necessary information on energy use, environmental impacts, and sustainability. These campaigns should be administered by trusted public and private sector actors.
2. Research and development: There is a lack of local technical knowledge, professional staff, R&D organizations, and financial resources.
3. Inefficient and insufficient infrastructure: Private sector investment must be encouraged in Balochistan, and the federal government has a duty to provide data, training, resources, and technology transfer to residents and community leaders.

The power sector transition in Balochistan is set against social unrest in the province. Since its annexation in 1948, Balochistan has experienced uprisings over the province's autonomy, and recent conflict stems from a separatist insurgency that began gaining momentum in 2019. Political workers, journalists, activists, and students have allegedly been arrested, and even executed, without governmental acknowledgement or record. Civil unrest in Islamabad has been led by women, with government leadership attempting to stall and end demonstrations by shuttling protestors back to Quetta.

Symbolic Importance

All renewable energy projects must be developed with the consent and coordination of local populations. In addition to residents in Balochistan's cities, the Baluchi (also referred to as Baloch) people stretch across Balochistan, both in Pakistan and Iran. Baluchis maintain significant heterogeneity and have historically lacked unity in political organizing. More than 50% of Baluchis live below the poverty line despite Balochistan’s ample natural resources; natural gas deposits were discovered beginning in the 1950s. Compensation and consultation with local leadership was lackluster while exploiting the reserves, a pattern which must not be recreated by renewable energy developers and electric utilities.

Pakistan has an energy generation deficit of approximately 5,000-7,000 MW, which leads to significant load shedding, especially in rural regions of the country. Pakistan's energy demand is expected to increase in years to come, with 19% of future energy demand resulting from water desalination. Water needs further complicate and exacerbate the Pakistan's need for ample clean energy generation, and this is especially so in Balochistan.

As of 2018, more than 51 million Pakistani people lacked access to electricity. Because the national grid is largely inaccessible in rural regions of Pakistan, and its expansion is prohibitively expensive, decentralized microgrids paired with solar generation could be used to increase reliable electricity access for rural residents. While microgrids generally only provide basic electrification (high quality lighting and charging of a mobile phone), it is able to do so for multiple households at a significantly lower cost over in the long run. An estimated 40% of the population and 64% of land area in Balochistan does not have access to electricity, though more than 19,000 solar home systems have been installed in remote areas to combat this.

Coal's prevalence throughout Balochistan, both as a fuel source and employment generator, is profound. While an estimated 40,000 employees are registered workers in Balochistan's mines, an estimated 100-200 workers are killed in avoidable mining accidents each year, with many more incidents unreported. A Just Energy Transition in Balochistan could provide an avenue for improved working conditions and alternative employment pathways for residents, resulting in fewer fatalities and greater social mobility.

Additionally, Balochistan sits atop large copper and gold reserves, and mega mining projects like the Saindak and Reko Diq mines will demand significant amounts of electricity to operate. Gold and copper mining tends to require diesel for fueling equipment and comminution processes. Open-pit copper mines like Saindak and Reko Diq have an average estimated energy intensity of 26 gigajoules per tonne of copper produced, whereas open-pit gold mining has an average estimated energy demand of 372 gigajoules per kilogram produced. Across mineral types, comminution is the largest single consumer of energy throughout the mining process. Typically, mining operations self-generate using diesel and natural gas, though there are sites across the globe where wind or distributed solar have been deployed. Due to the relative costs of shifting to renewables, coupled with a mine's 24/7 energy need, distributed solar systems are typically hybridized with gas or diesel. Renewable energy can play a role in decarbonizing energy-intensive industries like mining, though systems must reach beyond peak load of the plant to allow for storage and recharge if a mine is to be powered by 100% clean energy. Reko Diq is expected to employ 7,500 workers when operation begins in 2028.

Balochistan has some of the highest solar energy potential values in the world. Given that Pakistan ranked 99th out of 110 countries with respect to energy security in 2020, domestically produced wind and solar generation may strengthen the resilience of the country's energy supply.

A study by 8.2 Group found that other provinces in Pakistan could benefit from an addition of USD $3 billion per year added to national GDP, as well as lower cost of electricity supply, with savings of approximately USD $900 million per annum. In addition, Pakistan stands to increase its GDP by USD $250 million per annum and USD $750 million per annum by exporting electricity and green ammonia, respectively.

Current System Description

Current Power Capacity Mix

As of 2023, Balochistan had six generation units with an additional 200 MW imported from Iran. Since demand in Balochistan is less than 1,500 MW annually, most generated power is exported from the Province. About 40% of Pakistan's primary energy production is in Balochistan, which also contains 33%, 9%, and 2% of the country's natural gas, coal, and oil reserves, respectively.

Energy Source	Installed Capacity (MW)
Natural Gas	990
Coal	1,350
Total	2,340

Operating generation capacity of Balochistan, in megawatts.

Operating generation capacity of Pakistan, in megawatts.

Prospective Power Capacity

Balochistan's average mean daily solar radiation is 5.9-6.2 kilowatt-hours (kWh) per square meter. Parts of Balochistan reach an estimated 2300-2700 hours of sunlight per year, though monsoon seasons create times of year in which concentrated solar power (CSP) generation will be limited. Photovoltaic (PV) solar is still capable of production during these times. Additionally, while geothermal energy has not been developed in Pakistan thus far, research estimates its potential at up to 100 GW, with much of that potential coming from Balochistan.

Energy Source	Announced (MW)	Pre-construction (MW)	Construction (MW)
Solar	0	733.2	200
Coal	300	0	0
Total	300	733.2	200

Coastal Pakistan has an estimated wind energy potential of more than 50,000 MW, and government leadership has already flagged wind corridors in Noshki, Kharan, and Killa Saifullah as ideal locations to begin exploring wind energy development. The following table (originally published in Renewable Energy Technologies in Balochistan: Practice, Prospects, and Challenges) provides information on Balochistan's wind speeds at a height of 30 meters:

Parameter	Aghor	Gadani	Gwadar	Hubchoki	Jiwani	Winder
Wind speed (m/s)	5.5	4.9	3.6	5.0	3.7	4.9
Standard deviation	2.7	3.0	2.5	2.6	2.4	9
Wind power density	173.5	170.5	80.4	139.1	78.4	160.7

In the township of NokKundi, wind speeds average are even higher at 6.4 m/s, with maximum wind speeds during summer topping out at 11.11 m/s at a height of 50 meters.

In addition to wind and solar, Balochistan has the technical potential for developing geothermal energy in three primary locations: along the Chagai Volcanic Arc's magmatic sources, in the Pishin Basin's geothermal springs, and in the Makran coastal area's geothermal springs and mud volcanoes. The Upper Sindh Basin, which stretches into Balochistan, could host geothermal energy generation.

Renewables in Balochistan

Renewable Targets

In the country's most recent Nationally Determined Contribution (NDC) submission, Pakistan established several renewable energy targets:

• Overall emissions reduction of 50% by 2030; 15% of the reduction will be achieved by leveraging domestic resources, and 35% is contingent upon international grant financing.
• Renewable energy comprising 60% of total generation by 2030.
• Electric vehicles comprising 30% of total on-road vehicles.

Under the Renewable Energy Policy 2019, the Government of Pakistan aims to have 20% of the country's installed power mix come from non-hydro, grid-connected renewables. This target increases to 30% by 2030. Similarly, the Integrated Generation Capacity Expansion Plan calls for the addition of 11,700 MW of new wind, solar, and bagasse (bioenergy) projects. Approximately 16,300 MW of non-hydro renewable energy will be needed to meet national renewable energy targets.

Major Renewable Projects

While Global Energy Monitor tracks projects that meet a 20 MW threshold, several small-scale projects are underway in Balochistan. These include:

• Tehsil Jaffarabad (7.9 kW)
• Tehsil Zahri in the Khuzdar District (10 kW)
• Hospital electrification projects in the Mastung District (14.5 kW)
• Rural electrification projects in Tehsil Kalat, Tehsil Surab, and Tehsil Khuzdar (41.1 kW, 59.5 kW, and 34.3 kW, respectively)

Despite Balochistan's wind potential, there are no major (>20 MW) wind energy projects in the pipeline, as of July 2023.

In-development renewables projects in Balochistan, as of July 2023.

Project Name	Energy Source	Installed Capacity (MW)	Status
Attock Cement solar farm	Solar	21	Pre-construction
Bostan solar farm, Unit 1	Solar	50	Pre-construction
Bostan solar farm, Unit 2	Solar	50	Pre-construction
Gwadar (CPEC) solar farm	Solar	300	Pre-construction
Gwadar (IB Voght)	Solar	62.2	Pre-construction
Khuzdar (Engro Energy) solar farm, Unit 1	Solar	50	Pre-construction
Khuzdar (Engro Energy) solar farm, Unit 2	Solar	50	Pre-construction
Khuzdar (IB Voght) solar farm	Solar	50	Pre-construction
Kuchlak (El Passo Technology) solar farm, Unit 1	Solar	50	Pre-construction
Kuchlak (El Passo Technology) solar farm, Unit 2	Solar	50	Pre-construction
Kuchlak (Engro Energy) solar farm, Unit 1	Solar	50	Construction
Kuchlak (Engro Energy) solar farm, Unit 2	Solar	50	Construction
Kuchlak (Engro Energy) solar farm, Unit 3	Solar	50	Construction
Kuchlak (Engro Energy) solar farm, Unit 4	Solar	50	Construction
Lasbela solar farm	Solar	50	Pre-construction
Panjgoor solar farm	Solar	50	Pre-construction
Pishin solar farm	Solar	50	Shelved

Potential of Renewables

Pakistan has significant potential for both wind and solar. According to the Central Asia Regional Economic Cooperation Program, Pakistan's total technical solar and wind potentials are 2,900 GW and 340 GW, respectively. Additionally, Balochistan has the potential to implement greater than 14 GW of Renewable energy within 5-10 years through least-cost pathways, including PV utility scale plants of 9,500 - 11,500 MWp, Wind plants of 3,500 MW, CSP plants of 230 MW, and Distributed PV of 1,300 MWp. While specific estimates are difficult to find, Balochistan's geography, irradiance, and location make it one of Pakistan's most high-potential provinces, with respect to renewables. Approximately 40% of Balochistan receives direct solar radiation greater than 6 kWh per square meter, and the World Bank calculated a total solar potential of 1.2 million MW in Balochistan. Further, the U.S. National Renewable Energy Laboratory estimated a wind potential of 20,000 MW. Resource maps for both are included below:

Solar irradiance of Pakistan, as published in the study Analyzing Pakistan’s Renewable Energy Potential: A Review of the Country’s Energy Policy, Its Challenges, and Recommendations

Wind density of Pakistan at 50 meters, as published in the study Analyzing Pakistan’s Renewable Energy Potential: A Review of the Country’s Energy Policy, Its Challenges, and Recommendations

Solar-Powered Irrigation

Pakistan is the third largest user of irrigated groundwater in the world, with 73% of electricity demand coming from agriculture and 73% of country’s area irrigated directly or indirectly by groundwater. The irrigation process is costly and energy-intensive and accounts for a significant amount of the country’s energy demand; while 16% of the estimated 1.2 million pumps are powered by electricity, 84% use diesel. Solar presents a significant opportunity for irrigation as it has no fuel costs, preserves grid electricity, eliminates the need for diesel, promotes irrigated agriculture in remote areas, and improves socioeconomic development for farmers. Uptake has been slow, due in large part to a lack of awareness and technical capacity.

Understanding that these systems may be prohibitively expensive for some, the Government of Pakistan has established subsidies and financial assistance initiatives for installing tube wells (not exclusively solar-powered tube wells). These incentives are carried by both national and provincial governments, which provide 40% and 60% of subsidies, respectively, that are paid directly to QESCO. Farmers are billed about PKR 10,000 per month for bills up to PKR 75,000. In addition, Pakistan has considered a “free solar pump scheme,” in which the government would provide a free solar pump to low-income families and farmers as a means of transitioning existing tube wells to solar power. Solarized tube wells can help promote sustainable agricultural practices and support rural economies, though the nearly 10,000 known unregistered tube wells create infrastructural and financial strain on the power system.

Protests in the first half of 2024 focused on farmers' grievances with load shedding and its impact on powering tube wells, which in turn affect earnings. One of the demands of the protestors is the "swift execution of promises made by both federal and provincial governments to transition rube wells to solar power, offering a lasting solution to the persistent issue of load shedding."

Potential impacts from renewables expansion

Key challenges associated with solar pumps include: 1) contribution to depletion of groundwater, 2) high upfront costs, 3) maintenance and repairs require time and funding, 4) social resistance to new systems, and 5) lack of infrastructure and limited access to investment. In particular, a lack of transmission infrastructure and grid unreliability have generated concerns from the government, and continued load shedding wears down tube well equipment.

Fossil Fuels in Balochistan

Fossil Resources and Retirement

According to Global Energy Monitor, Balochistan has 1,350 MW of coal and 990 MW of natural gas generation in operation. In addition, Balochistan is home to three operating coal mines (Degari Collieries, Sharigh Coal mine, and Sor-Range Coal Mine) as well as two operating oil and gas fields (Sui and Bolan East).

Across Pakistan, an estimated 6,447 MW of existing thermal power plants are scheduled to retire by 2030. While most of these retirements will occur within Sindh and Punjab, the 1,292-MW HUBCO coal power station in Balochistan is scheduled for retirement in 2027.

Current impacts from fossil fuel

In the first half of 2022, approximately 90 workers across Pakistan were killed by accidents in coal mines, with 24 incidents in Balochistan alone resulting in the deaths of 71 miners and injuries for another 25.

In particular, though not exclusively, mines in Dukki have notoriously poor working conditions, lax safety standards, and inadequate access to medical and emergency services. Coal mining in Balochistan is considered more hazardous than other parts of Pakistan due to its rocky terrain and 'fox-hole' practices. Families of workers killed in mining accidents are entitled to compensation under the Workmen's Compensation Act of 1923, though the amount of compensation is lower in Balochistan than in other provinces (PKR 300,000 vs. PKR 500,000).

Additionally, miners are especially vulnerable to respiratory diseases due to exposure to coal dust. Illnesses include asthma, lung cancer, and tuberculosis, and due to the distance from mines to nearby cities, miners are sometimes unable to seek diagnoses until diseases progress. Other studies highlight that chronic exposure to dust may cause headaches, sinus irritation, drowsiness and fatigue, nausea, and pneumoconiosis. Drinking or irrigating mine-contaminated water may also cause ulcers, diarrhea, cholera, and hepatitis B and C. According to the Air Quality Life Index, residents of Balochistan would gain an estimated 1.27 years in life expectancy if particulate matter pollution were decreased to World Health Organization guidelines.

Employment

Current employment from the fossil fuel sector

As of May 2023, an estimated 40,000 registered employees worked in coal mines in Balochistan, though some union representatives have esimated that up to 106,000 miners are employed in the province. Many employees are not registered.

According to the Pakistan Bureau of Statistics, employment in industries relevant to energy generation is dominated by males. In Balochistan (2020-21), Mining and Quarrying comprised 1.29% of total formal employment and 1.42% of total informal employment. Electricity, gas, steam, and air conditioning supply comprised 0.25% of formal employment and 0.07% of informal employment.

Employment from the renewable energy sector

In 2020, an estimated 2,679 full-time equivalent (FTE) jobs and 12,000 FTE jobs were created to support grid-connected renewables and off-grid renewables, respectively. More than half of these jobs (1,998) are expected to be permanent in the form of operations and maintenance. Jobs broken down by generation type are summarized below:

	Temporary	Permanent	Total Jobs (FTE)
Direct Jobs for Grid-Connected Renewables
Wind (grid-scale)	184	1,558	1,742
Solar PV (grid-scale)	-	344	344
Solar PV (distributed)	497	97	594
Direct Jobs for Off-Grid Renewables
Solar PV (distributed)	6,600	5,460	12,060

A 2022 study conducted by the World Bank estimated the number of jobs created in Pakistan per megawatt of renewable energy installed, summarized in the table below:

	Wind (onshore)	Solar PV (grid-scale)	Solar PV (distributed)
Manufacturing	0.2	4.4	4.4
Development and Preconstruction	1.2	0.2	5
Construction	2.5	5.5	11
Operation and Maintenance	1.2	0.8	2.1

The exact numbers of jobs projected depend on the scenario. The Renewable Energy Policy of 2019 would generate 295,610 jobs (173,888 direct and 121,722 indirect) in a high wind pathway, or 333,797 jobs (196,351 direct and 137,446 indirect) in a high solar PV pathway. Alternatively, following the IGCEP would generate 274,681 jobs (161,577 direct and 113,104 indirect). Furthermore, employment in the renewable energy space broadly could provide more than 25,000 permanent local jobs.

According to Dr. Siraj Bashir of the Balochistan Think Tank Network, large-scale development projects tend to exacerbate inequity. Mega-projects usually involve external skills, education, specializations, and technical expertise being brought in, resulting in the local workforce being "sidelined," underutilized, and marginalized.

Land availability

Land cover types across Balochistan, Pakistan. A higher resolution version can be found here, as originally published by the Food and Agriculture Organization of the United Nations. Pie chart legend:
Irrigated crops: 1.4%
Crop marginal and irrigated saline: 0.4%
Crops in flood plains: 0.3%
Rain-fed crops: 6.4%
Forests - Natural trees and mangroves: 1.2%
Natural vegetation in wet areas: 4.3%
Range lands - Natural shrubs and herbs: 6.5%
Built up areas: 0.4%
Bare areas: 21.1%
Bare areas with sparse natural vegetation: 57.4%
Wet areas: 0.4%

In a 2017 study, the Food and Agriculture Organization of the United Nations estimated that 57.4% of land area in Balochistan is bare with sparse natural vegetation; this is followed bu totally bare areas, which is 21.1% of land cover. This type of land cover is excellent for wind and solar development, though this does not account for the territories of tribal and nomadic peoples living in Balochistan.

Civil Society Engagement

The Azat Foundation Balochistan works to improve the health, education and human rights of residents of Balochistan. While their work does not explicitly focus on renewable energy development, the organization aims to advance United Nations Development Programme Sustainable Development Goals (SDGs) and provides support to communities impacted by climatic events, such as flooding.

The Centre for Peace and Development, Balochistan aims to "promote the culture of peace in Balochistan through human rights education/advocacy, conflict resolution, and good governance, advocating for positive change in the society through the provision of a set of social and economic services." By coordinating with national and international organizations, the Centre hope to promote peace and sustainable development within Balochistan. The Centre has become one of the largest rights-based organizations operating in Balochistan, working across 17 districts.

The Youth Association for Development works across society, politics, and human rights to enact long-term change and sustainable development across Pakistan. It is a youth-led effort and a partner of the Global Partnership for Sustainable Development Data.

Pakistan Development Alliance coordinates across civil society organizations (CSOs) in districts across Balochistan. These CSOs range in focus and demographics served but all collaborate to advance Sustainable Development Goals across Balochistan. A list of member organizations and associated contacts can be found here.

The Institute for Development Studies and Practice (IDSP) Pakistan works to support education (particularly for women and girls), community development, human rights protection, and the development of affordable and clean energy, among other priorities. In late 2023, IDSP presented their Balochistan Renewable Energy Assessment Study to representatives from the Balochistan Department of Energy, the Quetta Electric Supply Company, the National Transmission and Despatch Company, and the Zamindar Action Committee. The same year, IDSP hosted a conference titled "Balochistan's Renewable Energy Journey: Making accessible, affordable, and sustainable power in the Province" to highlight the financial, administrative, and political challenges hindering renewable energy development. IDSP is working with Renewables First and the Government of Balochistan to create a dedicated renewable energy policy for the province.

As one of the largest community-based organizations operating in the province, the Balochistan Rural Support Program (BRSP) works to improve the conditions for poor and rural populations. Among their other initiatives, BRSP works to support small business owners in becoming more "competitive, inclusive, and climate resilient" while fostering economic development. Since its inception, BRSP has supported an estimated 10,173 community organizations, 473 village-based organizations, and 33 Local Support Organizations. In January 2024, BRSP signed a Memorandum of Understanding with the Balochistan University of Information Technology, Engineering and Management Science Quetta to convert the Balochistan Center of Excellence to solar power, a move that spurred the Governor of Balochistan to highlight solar energy's potential in combating Pakistan's energy crisis.

Despite the dangers associated with coal mining, workers have protested mine closures due to their loss in employment. For example, in September 2023, workers in Balochistan's Mach Bolan area rallied in protest of the continued closure of mines in Balochistan. These protests were also attended by prominent members of the Mines Owners Association. Activities like these demonstrate the need for labor to be included in a Just Transition, wherein workers are able to receive training or alternative, well-paying job opportunities in a clean energy economy.

Moreover, efforts have been undertaken to understand the attitudes towards and impacts of fossil fuels on citizens. In a survey conducted by Mehran University of Engineering & Techology, residents of Balochistan shared their experiences. During peak hours in winter, low gas pressure and gas outages are common (flagged by 25% of respondents). Despite this, residents express greater satisfaction with gas prices than electricity prices.

Governmental information

Related governmental policies and papers

National Environmental Policy (2005): A cross sectoral policy that aims to achieve four primary objectives: conserve, restore, and manage environmental resources while combating climate change; integrate environmental considerations in national planning; meet internal mandates while advancing national goals; and create awareness about the environment while mobilizing communities to protect, conserve, and restore Pakistan's environment.

Balochistan Power Generation Policy (2007): Promotes development for renewable and indigenous coal projects, as well as establishes the Balochistan Power Development Board to facilitate private sector investment for wind and solar projects in the Province. Many incentives and procedures outlined in this legislation was adopted from the Pakistan's Policy for Power Generation Projects (2002).

Alternative Renewable Energy Policy (2019): Outlines the pathway for increasing the share of non-hydro, grid-connected renewables in national generation capacity to 20% by 2025 and 30% by 2030.

Sustainable Energy for All: National Action Plan (2019): Published in 2019, the Action Plan outlines the Government of Pakistan's steps toward achieving three main objectives: 1) universal energy access, 2) doubling the share of renewable energy, and 3) doubling the rate of energy efficiency. These objectives will require an average of 1 million connections per year and extensive transmission and distribution planning.

Integrated (Indicative) Generation Capacity Expansion Plan (2021): Provides a 10-year plan and pathway to increasing the generation, and related transmission, capacity needs to meet future demand. Includes an extensive load forecasting study projecting Pakistan's 2030 needs, and beyond.

National Climate Change Policy (2012, updated in 2021): The policy has 14 objectives outlined, all of which pertain to building a environmentally sound, resilient, and economically strong Pakistan. Specific objectives include: 1) pursue sustained economic growth by appropriately addressing climate change; 2) integrate climate change policy with other inter-related national policies; 3) build a climate-resilient future; promote Pakistan's transition to cleaner, lower emission, and less carbon intensive development; and 4) develop appropriate economic incentives to encourage public and private sector investments in adaptation and mitigation measures.

National Electricity Policy (2021): Guides Pakistan's electricity sector development and aims to achieve three primary goals: 1) supply efficient and affordable energy to the country; 2) maintain reliable electricity by investing in supply and infrastructure; and 3) foster growth while minimizing environmental impacts and improving financial difficulties facing the country. The policy also highlights the need to shift away from imported fuels.

National Clean Air Policy (2023): Addresses transportation, industry, agriculture, waste, and residential industries to improve the air quality of Pakistan. The policy aims to reduce PM2.5 emissions by 38% by 2030 and 70% by 2040, compared to 2020 levels.

In addition, Pakistan recently established the Competitive Trading and Bilateral Contracts Market to transition the country's electricity sector toward a wholesale market. Initial participants will be Build Power Consumers with capacities of at least 1 MW. In doing this, government leadership aims to increase market competition as well as foster greater efficiency, flexibility, and transparency.

China-Pakistan Economic Corridor

The China-Pakistan Economic Corridor (CPEC) aims to encourage regional economic development and prosperity through increased coordination and connectivity between China and Pakistan. The collaboration consists of energy, road work, railway, and pipeline projects. CPEC has seen substantial violence since its initiation. In Balochistan, local communities have disparaged the work given the lack of basic amenities and reliable power, and the Balochistan Liberation Army and Balochistan Liberation Front have both targeted Pakistani and Chinese nationals for the exploitation of the Province's resources.

Individual project development has been troubled; Chinese investors are owed billions of dollars by the Pakistani government, which hinders further investments. Grid constraints have inhibited new projects' abilities to come online. The 300-MW Gwadar coal power project may be shelved, and the 1,320-MW China Power Hub Generation Co.'s coal power plant has had issues with financial liquidity. Roadway projects are underway but incomplete. In response to these challenges, China's investments have shrunk in size and timeline with quicker returns on investment.

That said, the collaboration has yielded some successes. In early 2024, the Government of Balochistan alongside the Chinese Government successfully solarized twelve educational facilities, with the project's decentralized nature providing particular benefits for Balochistan's rural populations.

Relevant governmental ministries and political coalitions

Several federal and provincial bodies have a stake in Balochistan's energy system:

Balochistan Board of Investment and Trade (BBOIT): Aids in facilitating investment in Balochistan to promote trade, investment, and economic development in the province. These investments include (but are not limited to) renewable energy projects.

Balochistan Energy Department: The Balochistan Energy Department aims to "enhance the energy capacity of Balochistan and fuel economic growth by creating an environment that meets the energy demands of all sectors through sustainable and affordable energy mix and its efficient use. The Department's objectives include:

• Provide least-cost power generation
• Encourage private sector investment through full cost recovery
• Ensure transparent and timely power project development
• Encourage investor participation in the development and rollout of solar projects
• Install solar on schools, BHU, District jails, and District Head Quarters hospitals
• Provide green energy options for consumers

Balochistan Power Development Board (BPDB, also called the Balochistan Energy Company Limited): Established in 2007, the BPDB provides one-stop support for power producers navigating Pakistan's regulatory systems. Specific responsibilities include facilitating implementation of power generation projects and distribution arrangements, supporting developers as they navigate licensing processes, and negotiating implementation agreements.

National Electric Power Regulatory Authority (NEPRA): Regulates electric power services for Pakistan by creating procedures and standards, advising the federal government with respect to energy and transmission planning, and manage relevant tariff structures and market design to ensure liquidity of power markets.

Ministry of Energy (Power Division): Oversees activities related to electricity in Pakistan, including the generation, transmission, and distribution of power, as well as related policy matters. The Ministry of Energy is responsible for identifying energy needs and leading on comprehensive planning.

Ministry of Climate Change and Environmental Coordination: Tasked with creating policies and procedures for addressing and mitigating climate change in Pakistan.

National Transmission and Despatch Company (NTDC): A state-owned public limited company that is responsible for all properties, rights, assets, obligations, and liabilities for the grid stations, transmission lines, and networks for 220 kV and 500 kV. NTDC is connected to all 11 distribution companies (DISCOs) in operation throughout Pakistan.

Private Power and Infrastructure Board (PPIB, now encompasses the Alternative Energy Development Board): Responsible for executing implementation agreements; providing technical, legal, and, and financial support to Pakistan's Power Division and Provinces; and assisting and facilitating development of generation, transmission, and distribution of conventional and alternative (renewable) energy sources.

In addition, the Government of Balochistan has signed Memoranda of Understanding (MOUs) with InterTeck Kuwait and CK Solar Korea to decrease the generation supply gap in Balochistan (especially Quetta), as well as with the Government of Canada to establish 20 50-MW plants by the end of 2021.

Finally, the Pakistan Council of Renewable Energy Technologies (PCRET) was responsible for promoting the development, acquisition, and dissemination of renewable energy technologies throughout Pakistan. In December 2023, PCRET was confirmed to be in the process of disbanding due to lack of funding. Its assets and resources will be reallocated to the National University of Sciences and Technology, except the Pak-Korea Testing Laboratory for PV Modules and Allied Equipment, which will be transferred to STEDEC Technology Commercialisation Corporation of Pakistan.

Governance Challenges

Several obstacles related to Balochistan's governing structure may hinder renewable development, namely:

• Frequent changes in provincial government leadership and relevant decision-makers
• Lack of updated province-specific electricity planning frameworks
• Preexisting focus on fossil fuels rather than renewable generation opportunities
• Lack of local subject matter experts for government leaders to consult with when creating long-term plans
• Lack of strategy to engage meaningfully and continuously with community members
• Limited use of technologies that can streamline processes like land acquisition and demand forecasting
• Prior and ongoing attacks on infrastructure
• Poor communication across national entities

Permitting

The entire licensing process, from initiation until construction begins, takes an average of 31 months. To begin, a developer will create a project proposal and request a Letter of Intent (LOI) from the Alternative Energy Development Board (AEDB). Once approved, the developer or principal investor submits a bank guarantee and project facilitation fee, after which the LOI is issued. The LOI will outline a timeline over which the project feasibility studies must be completed. The AEDB will approve the feasibility study only if production estimates have been verified, environmental studies are approved by the respective provincial Environmental Protection Agency, and the National Transmission and Despatch Company has approved grid interconnection. Next, NEPRA must approve the documents that have been submitted thus far, after which decisions regarding generation licenses and tariffs are determined. The developer then submits a performance guarantee and a letter of support is provided by the AEDB. Once legals fees are paid and project documents are reviewed and negotiated, documents are signed the a letter of credit is issued to the power purchaser. Construction begins only after the project reaches financial close.

For off-grid and mini-grid projects, the process is more streamlined. There are five major steps to receiving a unified license for off-grid generation: 1) access the application forum online through the NEPRA website, 2) submit all relevant information and documents, 3) NEPRA will process the application within 60 days, 4) conduct any necessary hearings, as necessary, and 5) a license is granted for a maximum of ten years. A unified license will allow a developer connect, meter, bill, collect, disconnect, and all other mini-grid-related activities. Eligible applicants include individuals, companies, cooperatives, partnerships, and social welfare organizations.

As of 2023, the 15 projects in Balochistan's pipeline had received LOIs, though no auctions have been announced, leaving these projects in development limbo.

Transmission

QESCO transmission lines, as published by the Institute for Development Studies and Practice.

Across Pakistan, bottlenecks in transmission development and rural electrification are holding back renewables deployment, and this is especially so in Balochistan. Government leaders and decicision-makers are looking toward micro-grids to help address these challenges. Low population densities require long transmission lines, which in turn increase technical losses. A combination of factors like insufficient investment, lack of infrastructure, and security concerns have slowed development of transmission and distribution infrastructure in Balochistan.

While wind and solar potential are strong in Balochistan and Sindh, power evacuation constraints may arise as demand load centers are typically far from these regions. Effective transmission planning and upgrades will be required to minimize these constraints. Unfortunately, few transmission projects are planned for Balochistan; of 13 energy projects planned in the China-Pakistan Economic Corridor, none are intended for Balochistan, a province which already lags in electrification rates.

Current transmission resources

As of 2021, Pakistan's national transmission backbone consisted of:

• 7,470 circuit-km of 500 kV lines, supported by 16 grid stations with 25,460 MVA in transformer capacity
• 11,281 circuit-km of 220 kV lines, supported by 45 grid stations with 30,440 MVA in transformer capacity

Additionally, the distribution network is comprised of 37,735 km of 132 kV, 66 kV, and 33 kV voltage lines, supported by 928 grid stations with a total capacity of 53,263 MVA. Balochistan specifically has five 220-kV substations, no 500-kV substations, and a few 66-kV grids. The distribution network in Balochistan is managed by the Quetta Electric Supply Company (QESCO). After floods in 2022, QESCO infrastructure, particularly transformers, were damaged and will not be completed until July 2024.

Quetta Electric Supply Company

In 2023, the Government of Pakistan made the decision to transfer responsibility of power distribution companies (DISCO) to the provinces themselves. Once finalized, the Quetta Electric Supply Company (QESCO) will be situated under the Government of Balochistan. As the DISCO covering Balochistan, QESCO serves the fewest number of customers and the largest geographical area. Additionally, amendments made in 2023 mandate that DISCOs must have separate licenses for distribution and supply. As a result, non-recover of bills will fall exclusively on the supplier, while distribution companies handle technical losses and grid maintenance. This split could make net metering and real-time monitoring more feasible.

QESCO is the only distribution company serving Balochistan. The grid in the province has outdated infrastructure and experiences significant electricity losses, estimated at 27.9% in 2020-21. Over the same period, QESCO had one of the lowest recovery rates at 39.8%, and daily load shedding was common.

As of 2020, QESCO had only 0.3 MW of installed net-metered generation capacity, and only six licenses have been granted since 2016 (compare that to the Lahore Electric Supply Company, which issued 2,492 licenses over the same period). There are several obstacles to net metering in Pakistan, such as a lengthy and involved application process, stringent eligibility criteria for financing approvals, weak regulatory monitoring systems which allow sub-par imported equipment to be installed, absence of an online portal for applicants, insufficiently trained officers to aid in the process, non-availability of bidirectional meters, and a delay in accounting for net metering on consumer bills.

Projects in Balochistan from the Transmission Investment Plan (2023)

Source: NTDC Revised Transmission Investment Plan

Project Name	Project Locations	Status
Enhancement in Transformation Capacity of NTDC System by Extension and Augmentation of Existing Grid Stations	Sindh, Balochistan, Southern Punjab	Under construction
220-KV Dera Ismail Khan - Zhob Transmission Line alongwith 220-KV Zhob Sub-Station	Khyber Pakhtunkhwa, Balochistan	Grid station under construction; Transmission lines in pre-construction
220-KV Mastung G/S slongwtih allied T/Ls	Balochistan	Pre-construction
Installation of SVCs at 220kV Quetta Industrial (Revised Name "250 MVAR SVS at 132 kV Quetta Industrial)"	Quetta, Balochistan	Announced
Import for 100 MW Power from Iran (220 KV Grid Station Gwadar & Allied T/L from Iran to Gawadar	Balochistan	Phase I under construction
220 MVAR SVS AT 132 kV Khuzdar	Balochistan	Announced
Reactive Power Composition 220 &132 kV G/Ss	Punjab, Balochistan	Announced
Power Transmission Enhancement Project, Tranche-II (Ten Sub Projects of 500 & 220 KV T/Line)	Balochistan, Punjab	Complete
Construction of New 220kV Guddu-Uch-Sibbi Single Circuit Transmission Line for Improvement of Power Supply System in South Areas	Sindh, Balochistan	Complete

New transmission needed for renewables

Approximately 65% of Pakistan's population lives in rural communities, and there is no legislative framework for electrifying these areas. To increase electrification rates and support distributed renewable energy development, researchers recommend the national government create "an extremely stringent framework for energy rules and regulations, the primary objective of which is to promote the concept of tiny grids and hybrid systems that operate independently." Benefits of tiny grids include greater flexibility and cheaper energy prices, and they may encourage private sector investment in historically marginalized regions of the country. Balochistan is one such location which may benefit from transmission infrastructure specifically designed with rural communities in mind.

Social and environmental impacts of new transmission

Balochistan is very rural. Because of this, micro-grids will need to be utilized in order to deliver power from renewable energy projects to residents and communities nearby. Microgrids provide enhanced reliability and reduce transmission losses significantly because end-users are close to the generation source. Microgrids are also considered environmentally friendly due to their relatively small footprint. Currently, the Government of Pakistan is planning an off-grid electrification project for nine districts in Southern Balochistan, as well as a project to solarize existing tube wells. Given low electrification rates in Balochistan, microgrids paired with renewables could provide residents and rural communities with more sustainable and reliable electricity.

Ownership

Independent Power Producers (IPPs) produce approximately 50% of Pakistan's total energy, though IPPs tend to operate oil and gas generation rather than nuclear or hydropower, both of which generally produce cheaper electricity. The largest IPP in Pakistan is the Hub Power Company (HUBCO), which owned 1,292 MW in 2018.

Major owners of current fossil capacity

Few power generation owners are developing projects in Balochistan. Gadani Power Park Management Company and ANC Holdings are joint owners of the cancelled Gadani Power Park project, a 6600-MW coal generation facility. Of the fossil fuel plants that are operating in Balochistan, two are owned by China Power Hub Generation Company and two are owned by Uch Power Limited. CIHC Pak Power Company also owns both units of the Gwadar power station which has reached permitting stages.

Across Pakistan, major owners of coal and natural gas assets include Central Power Generation Company (nine natural gas projects), Jamshoro Power Company (four natural gas and two coal projects), K-Electric (eleven natural gas and two coal projects), Northern Power Generation Company (eleven natural gas and one coal project), and Punjab State Power Corporation (seven coal projects).

Major owners of prospective renewables

Across Balochistan's 16 solar projects, three companies own the majority of generation capacity: Engro Energy (owner of seven solar projects), IB Voght GMBH (owner of three), Enertech Holding Company (owner of two).

While Balochistan only has solar in its renewable project pipeline, several actors are constructing and/or operating projects across Pakistan. For example, the China Three Gorges Corporation owns five solar projects while Engro Energy owns seven. With respect to wind, no companies own more than three projects, and many owners of multiple projects are international companies. These owners include China Three Gorges Corporation, China Sunec Energy, PowerChina, and Burj Capital, which is based in Dubai, UAE.

Finance

An estimated USD $62 billion to $255 billion in investments will be required across the energy sector, depending on the scenario (Business-as-Usual, Government Commitments, Green Growth).

Additionally, the United States Agency for International Development (USAID) is active across Pakistan. Since 2010, $2.6 billion in private investments have been leveraged to add more than 3,900 MW to the grid and save approximately $429 million in revenues across the distribution sector. USAID has also partnered with four local banks to support underserved (small- and medium-scale) borrowers and clean energy projects. As a result of this partnership, $20 million has been mobilized, and an additional $54 million in financing has been allocated to support

Financial challenges presently inhibit renewable buildout in Balochistan. These challenges include high-security payments in tariff design (which increases project costs), low recovery of bills due in part to illegal connections and electricity theft, and aging and expensive transmission infrastructure.

Potential providers of wind/solar finance

The State Bank of Pakistan operates a financing scheme for renewable energy development. Three categories of projects are eligible for financing:

• Category I: Available for projects between 1 and 50 MW for a developer's own use or for sale on the national grid, or a combination of both. Financing lasts 12 years, with a grace period of up to two years, and a maximum amount for a single borrower of Rs. 6 billion.
• Category II: Available for projects up to 1 MW for a developer's own use or for sale on the national grid, under NEPRA's Net Metering Regulations. Financing lasts 10 years, with a grace period of up to three months, and a maximum amount for a single borrower of up to Rs. 400 million.
• Category III: Available to Renewable Energy Investment Entities (RE-IEs) to reinvest in renewable energy generation projects up to 5 MW; for selling electricity; or leasing, renting out, or selling on deferred payment renewable energy equipment to ultimate owners and users. Financing lasts 10 years, with a grace period of up to six months, and a mark-up rate of up to 6 percent per year.

Additionally, in 2021, the World Bank approved $400 million for the Pakistan Program for Affordable and Clean Energy (PACE), which is designed to "improve the financial viability of the power sector and support the country's transition to low-carbon energy." PACE aims to reduce cost while improve participation for both consumers and the private sector, while ultimately working toward a reduction in circular debt in the long-term.
The Green Climate Fund has also spearheaded a project to finance 43 MW of distributed solar PV installations across Pakistani households, agribusinesses, and small and medium enterprises (SMEs).

Climate Investment Funds has provided USD $570,000 to Balochistan as part of its Scaling Up Renewable Energy Program in Low Income Countries (SREP) program. The World Bank was tapped as CIF's implementing partner on this project.

Private Finance:

The Government of Pakistan is working with groups like USAID to foster an environment conducive to private sector investments. Efforts include infrastructure development, creating conducive policies and regulatory frameworks, enhancing competitive procurement, providing access to finance, demonstrating partnership models, and contributing other valuable products and services such as loan guarantees. These efforts have helped leverage $2.6b in private investment for renewables.

Public Finance:

Pakistan's institutions for public investment management are still emerging. The total cost to complete projects in the Public Sector Development Program (PSDP) is Rs. 10.7 trillion, more than 14 times the budget allocation of Rs. 727 billion in 2022-23. The federal government's investments account for less than half of all public investment. However, with the pressure of an increasingly unstable climate creating droughts, floods, and heatwaves, the country is being forced to find funding for energy infrastructure. Reforms like the Public Financial Management (PFM) Act of 2019 are a starting point for Pakistan-- with projects needing to be technically approved before receiving funding. Fluctuating amounts of investment have made it difficult to plan for large-scale infrastructure projects.

Changes in public investment in Pakistan over time. Via IMF.

Other

During a meeting in early 2023, several renewable energy development companies pointed out that the State Bank of Pakistan had blocked imports on solar equipment for at least six months, which halted development of some projects. In response, the companies requested at NEPRA establish a firm policy that would support project implementation.

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