Energy, environmental and economic effects of Renewable Portfolio Standards (RPS) in a Developing Country

This paper analyses the potential of renewable energy for power generation and its energy, environmental and economic implications in Pakistan, using a bottom up type of long term energy system based on the MARKAL framework. The results show that under a highly optimistic renewable portfolio standard (RPS) of 80%, fossil fuel consumption in 2050 would be reduced from 4660PJ to 306PJ, and the GHG emissions would decrease from 489 million tons to 27 million tons. Nevertheless, price of the electricity generation will increase significantly from US$ 47/MWh under current circumstances (in the base case) to US$ 86/MWh under RPS80. However the effects on import dependency, energy-mix diversity, per unit price of electricity generation and cost of imported fuels indicate that, it may not be desirable to go beyond RPS50. Under RPS50 in 2050, fuel consumption of the power sector would reduce from 21% under the base case to 9% of total fossil fuels supplied to the country. It will decrease not only GHG emission to 170 million tons but also will reduce import dependency from 73% under the base case to 21% and improve energy diversity mix with small increase in price of electricity generation (from US$ 47/MWh under the base case to US$ 59/MWh under RPS 50).