Clean Energy

Abstract

Pakistan boasts abundant clean energy and promises huge development potential, but the exploitation rate is low and the conflicts between power supply and demand are prominent.

2.1 Karot Hydropower Station in Pakistan

Pakistan boasts abundant clean energy and promises huge development potential, but the exploitation rate is low and the conflicts between power supply and demand are prominent. The Karot Hydropower Station invested and built by China will be able to ease the conflicts between power supply and demand in Pakistan, contribute to its sustainable economic and social development and push it to meet SDG7: Ensure access to affordable, reliable, sustainable and modern energy. With the advancement of the China-Pakistan Economic Corridor (CPEC), clean energy is expected to become the highlight in the country’s energy structure by empowering its endeavor to realize industrialization and generating enormous social and environmental benefits.

2.1.1 Background

Punjab in East Pakistan is the country’s second largest province and the most populous province with a total population of 110 million. Meanwhile, it houses Pakistan’s most sophisticated industrial and agricultural sectors and leads the rest of the three provinces in view of economic strength.¹

Severe power shortage has a profound impact on the economic hub’s production and life. For local residents, it is nothing out of the ordinary to experience a one-hour power failure every one or two hours on a daily basis, which means that they could face at least eight hours of blackout every day, or even as long as 16 h under the worse scenario. Unstable voltage often damages electrical appliances. Worse still, during the long, scorching summer, Punjab has to endure high temperatures—over 40℃—every year, during which heatstroke-related deaths due to the lack of power are frequently reported.²

Statistics show that the total power installed across the country in 2016 merely reached 25,000 MW and the actual power transmission capacity was only 17,000 MW or so, indicating a low utilization rate of the installed capacity. The short supply of power means that Pakistan suffers long-term power shortage. During the past few years, the government of Pakistan rolled out restrictive measures for power consumption on a large scale, including requesting factories in different provinces to suspend production in turn, suspending the use of outdoor advertising boards and neon lights, and using some natural gas intended to power transportation and chemical fertilizer production for power generation. By the end of 2016, there were still approximately 51 million people living without access to electricity in the country.³

All the five tributaries of the Indus River run through Punjab, so it is called “the land of the five rivers” in history. In fact, the name “Punjab” is a compound of two Persian words—five and river. The Jhelum River, one of the five tributaries, is also one of the largest rivers of the Indus system, and its mainstream is located in the province, extending for a total length of 725 km and covering a drainage area of 63,500m². The natural fall of its upstream is estimated to be 700 m, promising huge potential for the development of hydropower. The rich hydro energy of the province makes it possible to secure the stable supply of clean electricity.

2.1.2 Project Overview

In April 2015, driven by the BRI, the Silk Road Fund, China Three Gorges Corporation (CTG) and the Private Power and Infrastructure Board (PPIB) of Pakistan signed the Memorandum of Understanding on the Joint Development of the Hydropower Project in Pakistan (Fig. 2.1).

Fig. 2.1

The Karot hydropower station

The Karot Hydropower Station is the first hydropower project funded by the CPEC as well as the first investment made by the Silk Road Fund after its inauguration. Developed on a Build-Own-Operate-Transfer (BOOT) basis, the project was started in December 2016 and slated to go into operation in 2021 with an operation period of 30 years, after which the ownership will be transferred to the government of Pakistan free of charge. The planned installed capacity of the power station is 720 MW. When the power station is put in place, it could provide approximately 3.2TWh of clean electricity every year, which is equivalent to 10% of the country’s total hydropower generation in 2017 and could satisfy the power demand of more than two million Pakistani households for a year.⁴ The Karot Hydropower Station could curtail at least 2.7 million tons of CO₂ emissions every year, if calculated according to the CO₂ emissions of 844 g/kWh⁵ which was issued by the statistics of China Electricity Council (CEC).

2.1.3 Sustainability of Project Financing

A total of USD 1.74 billion will go into this project. The CGT only contributes 20% of funds as a major shareholder, and the rest of the 80% of funds are from international syndicated loans issued by the Export–Import Bank of China, China Development Bank (CDB), the Silk Road Fund and the IFC (a global financial firm under the World Bank). This financing mode is called “limited recourse financing.” As a prevailing financing mode in the international community, its basic principle is to make repayment and reap return on investment (ROI) with the revenue generated by the project. More risks are shared by those financial institutions in the loan syndicate, which ensures the sustainability of financing.

2.1.4 Strict Administrative Measures for the Environment and Biodiversity

The EIA of the Karot Hydropower Station Project had to comply with the requirements of Pakistan’s laws and regulations on environmental management as well as consider the environmental and social responsibility framework of the IFC. The EIA report needed to be approved by the government of Pakistan and the IFC as well, after which the local department of environmental protection granted an environmental permit to the project.

During the project construction, as requested by the EIA report, the CTG has set up a social and environmental management system and prepared detailed social and environmental management plans. Among them, eight are relevant to the environment and biodiversity, namely the Biodiversity Management Plan, the Water Quality Management Plan, the Air Quality Management Plan, the Control Plan for Surface Runoff and Rainfall Erosion and Rain-wash, the Noise and Vibration Management Plan, the Waste Management Plan, the Waste Materials and Side Slope Stability Management Plan, and the Leakage Prevention and Response Management Plan. The company has employed professional environmental engineers to guide and manage the execution of these plans, and train workers, relevant operating staff and management staff of the project with regard to environmental protection, and soil and water conservation.

In 2015, during the EIA of the project, the CTG organized experts to perform a critical habitat assessment of the area where the project was carried out. According to the assessment results, the area is not a critical habitat, but it is the natural habitat of several fish species, which are on the IUCN Red List of Threatened Species. On that account, it was concluded that the CTG needs to develop a separate Biodiversity Management Plan. In 2015 and 2016, the company engaged with fish experts to carry out an investigation into the fish in the relevant reach to determine the protection baseline. As the investigation reveals, these endangered fish species are breeding in nearby open channels, which deserve careful protection. The Biodiversity Management Plan has listed all data on these fish species and come up with protective measures. Some of the measures are as follows. Firstly, the speed of the downstream base flow of the dam should not be slower than 5m³/s during the initial filling and operation period to strictly maintain the downstream aquatic environment of the dam. Furthermore, in the course of construction, the “No Fishing” signs have been set up in the construction site, and ecological flow release holes and gates on the spillway have been installed to release ecological flows during the shut-down period (Fig. 2.2).

Fig. 2.2

Construction of the spillway

2.1.5 Green Construction Measures

While implementing the project, local-produced construction materials are used whenever possible to facilitate the effective utilization of resources. For example, natural sand and gravel from nearby rivers are used for dam filling after examining and comparing different technologies. The exploitation of these resources strictly meets the requirements of environmental protection and biodiversity protection.

The project has adopted 15m³/h buried sewage treatment equipment with an Anaerobic/Anoxic/Oxic (A2O) process and the nitration, denitrification and dephosphorization of backflows. Bio-contact oxidation is at the core of the project’s wastewater treatment. The wastewater of the sand and gravel system is treated via pre-treatment of silt sand recycling plus sedimentation of radial-flow sedimentation tanks plus mechanical dewatering through a filter press, enabling a recycling rate of 90%.

Oil storage zones and usage zones have been equipped with specialized oil stain treatment toolkits, and the operating staff would receive pre-job training in professional oil stain treatment. The company has secured licenses for heavy fuel oil (HFO) fired power plants, asphalt mixing plants and the storage of hazardous substances from the local bureau of environmental protection beforehand and developed special environmental management rules for their implementation, operation, emergency response and process control.

In respect of waste management, trash cans and trash recycling stations have been set up in the living areas, and a company specializing in waste recycling has also been employed to dispose of domestic waste.

In view of the conservation of water and soil, all exposed ground has been covered with plants to contain surface runoff and rainfall erosion, and dust.

Furthermore, with a view to meeting various restrictive and controlling indicators of environmental protection, the CTG has employed a third-party environmental monitoring firm to perform environmental monitoring every quarter, so that all parties involved could fully commit themselves to their duties.

2.1.6 Building of Supporting Infrastructure

The CTG has renovated the old Karot Bridge and relevant roads in the dam zone. In the reservoir zone, it has built a 200 m-long reinforced concrete highway bridge, a 277 m-long suspension footbridge over the Jhelum River and a 7.1 km-long highway (Fig. 2.3).

Fig. 2.3

Construction site of the dam zone

During the construction of the Karot Hydropower Station, the CTG also invested more than USD 6.4 million in social responsibility projects in areas affected by the project, including local education and medical care facilities, public water supply systems and roads, and public libraries and lounges, in a bid to greatly improve infrastructure and the living standards of local residents. By September 2020, it has transferred the ownership of two hospitals, four schools and one lounge to the local government. Currently, the planning of one highway, one school and one hospital is still under way. The company is performing an upfront survey of the roads, healthcare conditions and water supply conditions of neighboring villages, and will kick off the construction of these facilities, once all the resources are available (Fig. 2.4).

Fig. 2.4

New building of the Kannada Primary School

2.1.7 Establishment of Permanent Exchange Mechanisms with Local Governments and Communities

The CTG has developed the Stakeholder Management Plan and the Community Complaint Mechanism according to IFC’s performance standards and Pakistan’s laws and regulations, and international good practices. Then, it moves on to establishing permanent communication and exchange mechanisms with local governments, communities, social organizations and residents under the framework of these guidelines.

• 1. Complaint Committee Put Together with Meetings Held Regularly

  Members of the complaint committee include representatives of the company undertaking the project, the EPC contractor, the governments in charge of the regions affected, immigrants and communities affected. Pursuant to the Community Complaint Mechanism, the complaint committee convenes a meeting every quarter to discuss community issues related to the project and identify solutions through friendly negotiation with these stakeholders.

• 2. Community Liaison Persons Appointed To Visit Communities, Local Governments and Other Stakeholders on a Regular Basis

  The company undertaking the project has assigned staff to serve as community liaison persons to promote the procedures of the complaint mechanism, regularly collect complaints from local residents, organize irregular meetings to communicate with local residents, and handle community complaints promptly.

• 3. Complaint Boxes Set Up

  In order to open up channels for stakeholders of the project to lodge complaints and propose suggestions, the company has set up complaint boxes in nearby communities heavily influenced by the project to collect and document written complaints from local residents on a regular basis and assign community liaison persons to respond to these matters in a timely manner and give feedback on how they are handled (Fig. 2.5).

  Fig. 2.5

  

  Community liaison persons are holding a meeting with local residents

2.1.8 Boosting Local Employment and Skills Training

As of September 2020, the project has employed 1,253 Chinese workers and 3,374 Pakistani workers with the ratio of Chinese workers to Pakistani workers reaching 1:2.7, creating numerous job opportunities for local residents.

Apart from providing compensations for local immigrants whose livelihood is affected, the CTG has also implemented the “Livelihood Improvement Plan,” through which it provides training in wealth management and skills for immigrants aged over 16 to cultivate electricians, plumbers and car drivers, so that they could be empowered to better use the compensations to improve their life and make a living with other skills.

In addition, in order to empower local communities and enormous immigrants to seek ongoing development in the future, the CTG together with the University of the Punjab, the Confucius Institute, and Jiangxi University of Science and Technology has launched the “Pakistan Immigrant Scholarship Program” to select students from eligible immigrant families to participate in the “Joint Training of “2 + 2” Bachelor’s Degrees of Chinese and Pakistani Universities.” These students will receive a full-ride scholarship for four-year undergraduate education of electrical engineering and find stable jobs at the hydropower station in the future. Currently, a total of 33 Pakistani students are studying in China (Fig. 2.6).

Fig. 2.6

Some employees of the Karot hydropower station project

2.2 Mozura Wind Park in Montenegro

Mozura Wind Park, jointly built by Shanghai Electric Power Co., Ltd. of State Power Investment Corporation (SPIC) and the Maltese government, has made it possible for Montenegro to transmit power to the European Continent and to realize the vision of becoming the hub of Southern European power grids. The project will effectively push forward its energy development strategy, accelerate the implementation of SDG7, and play an important role in fulfilling the commitments it made when it applied to join the European Union (EU).

2.2.1 Background

Suffering from domestic power shortage for a long time, Montenegro often has to import electricity from countries such as Serbia, Macedonia, and Albania. In 2017, roughly 32% of its total power consumption relied on import.⁶ As a candidate country for EU membership, Montenegro also has to fulfill its commitments to the EU as requested and develop clean resources. In accordance with its energy development strategy, “by 2020, 33% of power should be generated from renewable energy.

2.2.2 Project Overview

The project is situated in the mountain area in the southern Montenegro. The project built 23 China-made 2 MW low-speed intelligent wind turbine generators, with a total installed capacity of 46,000 kW. Construction formally began on November 7, 2017. On December 22, 2018, the first wind turbine generators was connected to the grid. On February 8, 2019, all the wind turbine generators were connected to the grid and the project went into trial operation legally stipulated by the Montenegrin government. Following technical acceptance on November 15, 2019, the project secured a usage license from the Montenegrin government and was concluded. On December 26, 2019, the project received the usage license and priority generators’ qualifications issued by the Energy and Water Regulatory Agency of Montenegro. On April 25, 2020, the project was put into trial operation.

After it went into operation, the project will help Montenegro realize its goal of “doubling installed new energy capacity,” and supply 110 million kilowatt hours of clean power per year, roughly accounting for 5% of its total power generation. It will mainly satisfy the power demand of 100,000 residents in Bar and Ulcinj, and reduce roughly 3,000 tons of greenhouse gas emissions per year.⁷

2.2.3 China’s “Smart Wind Power” Technology

To ensure power generation capacity, the Mozura Wind Park adopted China’s advanced “smart wind power” technology, which constructs energy networks through smart control technology and advanced communication and information technology. At its core is the smart control technology, which uses artificial intelligence (AI) algorithms to push the technical limits of traditional wind turbine generators and accordingly improve the efficiency of such generators by 15% to 20%. In addition, the smart wind park software developed by China is able to convert traditional wind parks into smart ones, featuring centralized monitoring, mobile maintenance and unattended operation. Besides, it realizes information transparency and closed-loop management based on power losses, power grid friendliness based on wind flow models, as well as maintenance based on health degree management. Compared with traditional wind farms, its electricity generation grows by 10%, whereas its operation cost drops by more than 20% (Fig. 2.7).

Fig. 2.7

Mozura wind park

2.2.4 Contribution to Energy Technology Transfer

Mozura Wind Park is a successful case of China-Malta cooperation in the field of energy. Prior to this, the two countries had been working together for many years.

For quite some time, Malta had been relying on cross-border power transmission through submarine cables that are connected with Sicily, Italy. However, due to frequent technical failures of submarine cables, power outage occurred frequently. In 2014, the power outage suffered by Maltese users averaged 9.69 h.⁸ Due to the lack of natural resources, Malta has long depended on power import, in which over 63% is used for power generation. When the D3 power plant, the largest one in the country, was built, it only had eight HFO generator sets, with annual output of only 136,800kWh, and the black smoke from its power generation led to serious air pollution. With a view to improving its energy structure, reducing power cost and ensuring the safety and stability of power supply, Malta has been actively looking for capable partners.

In December 2014, Shanghai Electric Power signed an agreement on packaged cooperation with Enemalta for in-depth cooperation. The former invested EUR 100 million for a minority stake in Enemalta, and EUR 150 million to buy D3 Power Generation Ltd. (150 MW). In addition, the two sides jointly invested in an international renewable energy development company and an international energy service center, so as to promote the development of clean energy in the Mediterranean region. With the strong support of Shanghai Electric Power, Malta has made significant progress in the field of energy (Fig. 2.8).

Fig. 2.8

D3 power plant in malta

• 1. Malta has seen improvements in its overall investment environment and higher sovereign rating. With a series of technical and managerial improvements, Shanghai Electric Power has helped the Maltese government fulfill its commitment of “reducing electricity price for residents and commercial users by 25%”. Electricity price has fallen from the top three to one of the lowest in the EU, thus substantively improving the business environment of the country and contributing to its continuous rating upgrades to “A+”.

• 2. The energy structure has improved and stabilized. Following its involvement in the operation and development of Enemalta, it only took Shanghai Electric Power three years to save Enemalta from the brink of bankruptcy and generate stable profits for it. The safety, stability and reliability of the Maltese power grid were significantly boosted, with the average hours of power outage reduced by 90% to 0.44, non-technical line losses dropping from 14% to 4.7%, and grid reliability reaching 99.99%.

• 3. With the support of Shanghai Electric Power, Malta is able to meet EU standards on environmental protection, energy conservation and emission reduction. Having owned a controlling stake in D3 Power Generation Ltd., the largest power plant in Malta, Shanghai Electric Power led the oil-to-gas conversion of the eight generator sets by providing natural gas units, transforming internal combustion engines and upgrading the flue gas system. Following the transformation, Malta has fully abandoned HFO power generation, with the overall efficiency rising from 46.7% to 50%, and the emission levels of Nitrogen Oxides and CO significantly lower than the local government limit. As a result, the country has managed to meet the EU emission standard and recorder one of the highest overall operational indicators.