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Impact of policy changes on financial viability of wind power plants in Pakistan

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  • Rabbani, Rabab
  • Zeeshan, Muhammad

Abstract

Depleting conventional energy reserves and climate concerns necessitate the incorporation of more sustainable and low-carbon resources in global energy mix. This, in turn, requires assessment of the impacts of variations in policy and support mechanisms which significantly affect the cost-effectiveness of these alternative resources. In this study, the techno-economic feasibilities for wind power plants at four comparatively high-wind locations were developed for eight policy scenarios, based on variations in country's renewable energy policy during last decade, considering local and foreign financing options. High frequency ground measured wind data was used to develop 50MW wind power plant feasibility. The highest capacity factor among considered sites was found for Sujawal (39%) followed by Tando Ghulam Ali (34%) with Sujawal as the most favorable location with highest Net Present Value (NPV), Internal Rate of Return (IRR) and shortest Payback Period. Projects under foreign financing were found with higher NPVs (∼65%). The reduction of tariffs for wind power over the time has put a negative impact on NPV and IRR (−45% and −37% respectively). Levelized Cost of Electricity and Payback Period were also studied to comment upon the impact of policy on development of renewable energy sector in Pakistan and similar developing countries.

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  • Rabbani, Rabab & Zeeshan, Muhammad, 2022. "Impact of policy changes on financial viability of wind power plants in Pakistan," Renewable Energy, Elsevier, vol. 193(C), pages 789-806.
    • Handle: RePEc:eee:renene:v:193:y:2022:i:c:p:789-806
    DOI: 10.1016/j.renene.2022.05.049
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