Pakistan’s textile sector is gearing up to shift to solar and other renewable energy to combat the effects of escalating power costs, which have rendered their businesses uncompetitive in the region.
Reon Energy, which is part of Dawood Hercules Group, based in Karachi, has recently completed the installation of a 1MW solar project at Kohinoor Textile Mills Ltd (KTML), in the Punjab province.
According to textile industry leaders, the non-viability of the industry has forced stakeholders to look for alternative sources to overcome the energy crisis affecting their business. The All Pakistan Textile Mills Association (APTMA) says that, following KTML’s initiative, various other textile units are seriously considering going solar.
APTMA’s Sustainable Production Centre (SPC), in collaboration with German service provider Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, from Bonn, is working on the feasibility and other related issues of solar energy, Anis ul Haq, secretary general of APTMA, tells WTiN.com.
He says that, since it is a cheaper source of energy and industrial units can generate their own stand-alone power, APTMA plans to hold a series of seminars for manufacturers to create awareness about the benefits of renewable energy.
Comparing the costs of solar and fossil energy, Haq says: "Electricity costs industry US$0.098 [Pakistan Rupees PKR12] per kilowatt hour (KWh), while power produced through liquefied natural gas is US$0.13-0.14 [PKR16-17)] per kWh, as compared to solar costing just US$0.041-0.049 [PKR5-6] per kWh.” However, he says the real issue is the investment cost, which is a barrier to industry’s opting for renewable energy.
“According to our SPC research, a solar installation for 1MW costs roughly US$0.4m [PKR49m], so it’s not an easy task as it requires a lot of investment,” says Haq. But he also points out: “Undoubtedly it’s a one-time investment with countless benefits.”
Moreover, according to Anita Moosa Rajan, spokesperson for Reon Energy, financing is not an issue, since the State Bank of Pakistan offers what she describes as ‘green financing for industry’.
Outlining the benefits of solar energy, Rajan says: “It decreases operational expenses with a short set-up time and it produces no carbon dioxide, methane or other emissions.” It also has low operational and maintenance costs and is reliable, she says.
She believes that, given its undoubted benefits, “a lot of exporters are going for solar for reputation management and green credits.”
According to textile industrialists, conversion to solar energy will reduce the cost of doing business significantly, enabling the industry to compete with regional competitors, particularly India and Bangladesh. The initiative will also boost export volumes and the industry will be able to bring in more investment and provide more employment, they claim.
Describing KTML’s decision to implement solar power, Rajan says it was Reon Energy’s first project in the textile sector; however, she declines to quote cost of the project. Rajan explains that other sectors in Pakistan are also embracing solar, with Reon clients including Servis, Reckitt Benckiser, Shell, Abbott Laboratories, Unilever, Wah Nobel, Dada Dairies, Vital Tea, and more.
On the cost of solar, she says: “It is highly dependent on the exact cost of the solution, the solar irradiance in the location and the source and cost of financing based on these variables. It is fair to consider that the cost of captive solar electricity is normally in the range of US$0.081 [PKR10] per KWh.”
She gives the following comparison of per kWh variable cost of electricity production from various sources: imported coal US$0.061 [PKR7.50] per kWh; grid tariff US$0.10 [PKR 12.80] per kWh; LNG US$0.12 [PKR14.50] per kWh; local gas US$0.077 [PKR 9.50] per kWh; furnace oil US$0.12 [PKR15.1] per kWh; diesel US$ 0.17 [PKR 20.90] per kWh.
And compared with many other technologies, once solar power equipment is installed, the system immediately starts producing energy, she stresses.
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