The issue of transmission and distribution (T&D) losses has been one of the most difficult conundrums for energy experts in Pakistan. The prevailing debt in the electricity sector and the country’s economic prospects have made it almost impossible to hire third parties for investment in this sector.
Last year, most distribution companies (DISCO) failed to meet regulatory T&D targets, and despite having no budget constraints, DISCOS was unable to remove management and operational impediments to addressing T&D losses and recorded a loss of Rs 110 billion.
In Pakistan, electricity losses contribute to a significant amount of wasted resources, making the country’s grid extremely vulnerable. Although the country has long sought a strategy to reduce these losses, the problems of technical and financial losses in the electricity sector that date back a decade, as well as the gap in access to energy, persist, and intervention solutions traditional, such as the reduction of electricity supply, have always been in the spotlight. the root of the current unsustainable trajectory of the electricity sector.
Among the many strategies that DISCOs can take, it would be important to explore one strategy in particular, namely solarizing high loss feeders. Solarization of high-loss feeders offers multiple benefits to the overall grid infrastructure. Its application can play a critical role in reducing losses experienced by utilities, including technical and non-technical losses by potentially deferring transformer and transmission line upgrades, extending equipment maintenance intervals, and improving reliability. reliability of the distribution system.
From the point of view of the end user, self-generation could mean more reliable and affordable access to electricity. Therefore, loss minimization, reliability, low carbon footprint, sustainable energy supply, and clean, cheap power could all be achieved with a well-chosen distributed generation (DG) network.
Solar photovoltaic (PV) power has already reached grid parity in Pakistan and has become a cheaper source of energy purchase compared to fossil fuels and even other renewable resources. However, if we look at DG consumption so far, growth is more concentrated in financially healthy regions and has failed to take off in high-loss areas. However, this needs a focused intervention, a realistic action plan based on significant stakeholder support, alignment of national and provincial power and energy planning and policies, an enabling and enabling environment, and consolidated changes in each stage of the energy value chain. A sustainable and profitable business strategy and a detailed regulatory plan is necessary for the growth of solar PV in strategic locations.
Globally, there are several business models that have been employed for integrating solar-powered DG into utility infrastructure.
Bangladesh is a prominent example where coupling PV technology to a viable business model resulted in wide acceptance among different classes of customers. Infrastructure Development Company Ltd (IDCOL), a state-owned development finance institution, launched a public-private partnership initiative. The initiative encompasses easy loans and standardized after-sales services for end users.
More than 9 percent of the country’s total population has so far benefited from this initiative, which is one of the highest worldwide. Similarly, in India, solar PV rooftops reached a cumulative capacity of 1,700 MW in the year 2021, registering a growth of more than 100% from the previous year. The predominant business models are mainly focused on CAPEX and OPEX models that have facilitated this growth and diffusion of photovoltaic technology. The models are mostly designed for clients and communities that would not otherwise be able to access the previous financing schemes.
We can see that a new wave of supporting frameworks, business and financial models is playing a major role in spreading prosumerism and catalyzing the bottom-up transition. However, Pakistan is still marked by the absence of such emerging models, and this ‘absence’ has been one of the main impediments to the huge potential adoption of solar PV.
For Pakistan, community solar initiatives could play a critical role in ensuring energy access for end users and addressing DISCO’s complaints regarding lost revenue due to T&D losses.
Typical community solar panels are owned by utility companies or third-party project developers. Its structure begins with a shared solar array that generates and feeds solar energy into the microgrid. The microgrid can be operated in island mode or in grid-connected mode, depending on the operational load and availability of the resource. Electricity produced from individual community solar actions is credited back to the participant’s electricity bills, just like residential photovoltaic systems located on individual rooftops.
Customers who subscribe to the community solar initiative instead of individual solar PV systems can benefit from economies of scale as well as lower installation costs. A comprehensive rate framework for community solar on high-loss feeders can not only incentivize the end customer, but will also provide an alternative revenue stream for utilities.
Therefore, solarization of the high-loss feeder through community solar will go a long way toward reducing losses and offering a much-needed fiscally prudent path to address the long-standing challenge of power sector losses. —a win-win situation for the government, utilities and end users. The government should institute a supportive regulatory environment for the solarization of high loss feeders in the respective DISCOs.
The author is a Research Associate at the Policy Research Institute for Equitable Development.