Prospects of wind energy in Pakistan

The increasing demand of energy with the rising population and technological advances has
put immense pressure on the power generation sector. Globally today, hydrocarbons or the
non-renewable resources generate a major chunk of energy even with the availability of
multiple forms renewable resources, For energy deficient countries like Pakistan, the
situation is much worse as most of these hydrocarbons are inefficiently used to produce
electricity and the shortfall of power still remains one of the biggest challenges for the
country even in this technological age of 21
st
century.

In order for the country to cope up with this power deficit, it needs a significant support from
the immense opportunity of power generation through renewable resources like solar, wind,
geo-thermal etc. The primary challenge in the renewable energy generation is still the high
initial investment, large scale storage capacity of power, access to uninhibited areas and
thereby the resultant high per unit cost of production of the energy that is eventually charged
to customer. The only was this cost can be recovered is if it matches the willingness to pay of
customer. Willingness to pay (WTP) indicates the ability of a person to pay for a good or
service. This is generally referred to as demand or effective demand as it relates to the
combined willingness and ability which enables the transfer of goods/services from firms to
the household. WTP can be illustrated as the downward sloping demand curve with
reinforces the law of diminishing marginal willingness to pay i.e. with high
demand/consumption of successive units, the marginal willingness to pay declines.

The subsequent information pertains to insights from the survey of around 250+ on the matter
of load shedding and an estimation of their willingness to pay for environmental friendly
energy generation. As illustrated in Exhibit 1, 63% of people own UPS (uninterrupted power
supply) followed by the 33 % people who use generator as backup power supply. Other
sources of backup power are a meager 3% (it includes power generation through renewable
resources primarily solar). Exhibit 2 is related to load shedding hours with has a mean of 10
hours per day, which is close to half a day. With high use of backup power supply due to
increased load shedding hours, 94% respondents commented that their power expenditure has
increased and constitutes of an average 30% of their monthly incomes (Exhibit 3 & 5). UPS
being the dominant backup power supply has been rated with 9 score by majority (10 being
the highest) with 10 score being the mode of the data set (Exhibit 4).
Exhibit 7 further indicates the astonishing majority of 65% of respondents who have high
WTP for environmentally friendly energy generation given people whereas Exhibit 6
summarizes the respondents agreement of wind energy being a viable source of energy. But
the most extraordinary finding is that around 35% of the respondents agree to pay premium
and have high WTP to pay extra for environment protection out of the portion of their
retained earnings (Exhibit 8).

Even today, wind energy is amongst the cleanest (most environmental friendly) and most cost
competitive source for renewable power generation. New technological advances have
further made this venture cost effective in comparison to traditional methods for power
generation and it is fairly easy to achieve economies of scale through extension to this power
generation setup. This WTP for renewable power generation can also be enhanced through
more awareness and easy access to these technologies both for private and public sector.


















Exhibit 1 Exhibit 2



Exhibit 3 Exhibit 4



Exhibit 5



Ups
63%
Generato
r
33%
Invertor
1%
Other
3%
Alternative power supply
0
10
20
30
40
50
60
70
80
90
100
0 - 4 5 - 8 9 - 12 13 - 16 17 +
N
o
.

o
f

R
e
s
p
o
n
s
e
s

Hours
Load Shedding Hours
Yes
94%
No
6%
Increase in power
expediture
0
10
20
30
40
50
60
70
80
5 6 7 8 9 10
N
o
.

o
f

R
e
s
p
o
n
s
e
s

Rating Scale
Rating of Uninterrupted Power
Supply
0
10
20
30
40
50
0 - 10 11 - 20 21 - 30 31 - 40 41 - 50 51 - 60 61 +
N
o
.

o
f

R
e
s
p
o
n
s
e
s

% of monthly income
Power expense as % of Monthly Income
Exhibit 6 Exhibit 7




Exhibit 8






Yes
74%
No
26%
Wind Energy Viability
Yes
65%
No
35%
High WTP of
Eco-friendly power
0
20
40
60
80
100
0 - 10 11 - 20 21 - 30 31 - 40 41 - 50 51 - 60 61 - 100
N
o
.

o
f

R
e
s
p
o
n
s
e
s

% of Retained Earnings
Extra WTP from Retained Earning For Eco-friendly power