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Policy Review and Recommendations on the Promotion of Renewable Energy and Energy Efficiency

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Policy Review and Recommendations on the Promotion of Renewable Energy and Energy Efficiency SUSTAINABLE ENERGY INITIATIVE FOR INDUSTRIES IN PAKISTAN Project ID 100045 Policy review and recommendations on the promotion of renewable energy and energy efficiency (1st Draft) Prepared by: Full Advantage Co., Ltd. (Thailand) PITCO Private Limited (Pakistan) October 2016 For any query or clarification, please contact: Masroor Ahmed Khan National Project Manager UNIDO, Pakistan, Serena Business Complex, 7 th floor, Khayaban-e-Suhrawardy Islamabad Office: 92-51-8354820, Cell: 92-3357888128 Page 1 of 120 Contents Acronyms and Abbreviations .......................................................................................................... 4 Units ................................................................................................................................................... 8 Currencies ......................................................................................................................................... 8 1. Introduction .............................................................................................................................. 9 2. Types and Objectives of RE and EE Policies ....................................................................... 10 3. Recent RE and EE Development in Pakistan ....................................................................... 13 3.1 Brief of Pakistan power sector .......................................................................................... 13 3.2 Renewable energy development in Pakistan..................................................................... 14 3.3 Energy efficiency development in Pakistan ...................................................................... 20 3.4 Existing RE and EE institutional framework in Pakistan ................................................. 22 3.4.1 Existing RE institutional framework in Pakistan ............................................................. 22 3.4.2 Existing EE institutional framework in Pakistan ............................................................. 25 4. Review of existing RE & EE Policy and Regulatory Framework in Pakistan .................. 29 4.1 Existing RE Policy & Regulatory Framework in Pakistan ............................................... 29 4.2 Existing EE Policy & Regulatory Framework in Pakistan ............................................... 36 4.3 Gender Mainstreaming in RE and EE Policy in Pakistan ................................................. 39 4.3.1 Gender in the National Policy ................................................................................... 39 4.3.2 Gender in the RE & EE Policy ................................................................................. 40 5. International Best Practices and Experience in RE & EE Policy Deployment ................. 42 5.1 International RE Policy Best Practices and Experience.................................................... 42 5.1.1 China ......................................................................................................................... 42 5.1.2 India .......................................................................................................................... 46 5.1.3 Philippines ................................................................................................................ 53 5.1.4 Thailand .................................................................................................................... 57 5.1.5 Vietnam ..................................................................................................................... 64 5.2 International EE Policy Best Practices and Experience .................................................... 69 5.2.1 China ......................................................................................................................... 69 5.2.2 India .......................................................................................................................... 74 5.2.3 Philippines ................................................................................................................ 80 5.2.4 Thailand .................................................................................................................... 83 5.2.5 Vietnam ..................................................................................................................... 87 5.3 Gender in RE and EE Policies and Programmes in Asian Countries ............................... 91 5.3.1 Gender in national policies in Asia .................................................................................. 91 5.3.2 Gender in Renewable Energy Policies in Asia ......................................................... 92 6. Policy Gap Analysis ................................................................................................................ 94 6.1 Barriers to RE and EE Development in Pakistan .............................................................. 94 6.1.1 Barriers to RE Development in Pakistan .................................................................. 94 6.1.2 Barriers to EE Development in Pakistan .................................................................. 97 6.2 Comparative analysis of RE and EE Policies in Pakistan and five Asian Countries ........ 98 6.3 Policy Gap Analysis ....................................................................................................... 100 7. Preliminary Policy Recommendations for the Promotion of RE&EE in Industries in Pakistan ......................................................................................................................................... 107 7.1 Preliminary policy recommendations for RE promotion ................................................ 107 7.2 Preliminary policy recommendations for EE promotion ................................................ 107 7.3 Recommendations for gender mainstreaming in RE&EE Policy ................................... 107 Annexes .......................................................................................................................................... 108 Annex 1: List of existing RE & EE Policy and Regulatory Framework in Pakistan .................. 109 References ...................................................................................................................................... 110 Page 2 of 120 List of Figures Figure 1: Existing institutional framework for RE sector in Pakistan .............................................. 24 Figure 2: Existing institutional framework for EE sector in Pakistan .............................................. 26 Figure 3: The organogram of ENERCON ........................................................................................ 27 Figure 4: The organogram of PEECA .............................................................................................. 28 Figure 5: Average share of TPEC by sector in the Philippines (2005-2011) ................................... 81 Figure 6: Final Energy Consumption in the Industrial Sector (2015) .............................................. 84 Figure 7: Stipulated vs actual time in HPCogen approval process ................................................... 95 List of Tables Table 1: Types of RE policy instruments ......................................................................................... 11 Table 2: Types of EE policy instruments .......................................................................................... 12 Table 3: Electricity generation in Pakistan (2014-2015) .................................................................. 14 Table 4: Electricity consumption by sector in Pakistan (2014-2015) ............................................... 14 Table 5: Future hydropower projects to be implemented by WAPDA............................................. 15 Table 6: Potential and actual power generation from RE sources in Pakistan ................................. 29 Table 7: Upfront tariffs/FITs for grid-connected RE-based power projects in Pakistan .................. 31 Table 8: Status of adoption of upfront tariffs for RE in Pakistan ..................................................... 31 Table 9: Licensing fee comparison between RE and non-RE power projects in Pakistan ............... 34 Table 10: Energy consumption by sector in Pakistan (2014) ........................................................... 36 Table 11: Industrial energy consumption by type of fuel in Pakistan .............................................. 36 Table 12: Province-wide industrial electricity consumption in Pakistan .......................................... 37 Table 13: Industrial energy consumption and realizable energy saving in Pakistan ........................ 37 Table 14: Potential and actual power generation from RE sources in China ................................... 42 Table 15: FITs for grid-connected RE-based power projects in China ............................................ 43 Table 16: Potential and actual power generation from RE sources in India ..................................... 47 Table 17: RE target by technology in India ...................................................................................... 47 Table 18: FITs for grid-connected RE-based power projects in India .............................................. 49 Table 19: Potential and actual power generation from RE sources in the Philippines ..................... 53 Table 20: RE-based installed capacity targets of the Philippines
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