alochistan, which has abundant reserves of coal and natural gas and as well as vast renewable energy potential, is also the province with the least per capita energy use. Only 56.1 percent of the province has access to grid electricity. Its unique terrain and low population density make grid extension commercially unattractive and technically challenging. Even where grid access is available, reliability of electricity supply is poor. There are frequent outages and much voltage fluctuation due to outdated infrastructure. The transmission and distribution losses stand at 26.72 percent.

An effective solution that makes use of the province’s substantial renewable energy potential — over 40 percent of Pakistan’s total solar capacity — is micro-grids. Microgrids are localised energy systems that can operate independently or in conjunction with the main power grid. They consist of distributed energy resources, energy storage systems and advanced control systems that manage energy distribution. Micro-grids offer several advantages over conventional centralised grids, including enhanced resilience, reduced transmission losses and the ability to integrate various renewable energy sources efficiently.

Micro-grids, where installed efficiently, can not only fulfill the region’s requirement. Excess power can also be supplied to the national grid. They can also be effectively integrated with the mining sector, Balochistan’s major industry, particularly in remote areas like Chaghi. Several small-scale mines and newly issued mining leases require energy to start their operations. Micro-grids of 5 to 10 megawatts can meet their immediate needs.

As mining operations expand, the energy demand is projected to grow from 63 MW to 226 MW by 2028. Development of larger micro-grids, supported by solar and wind power, will then become crucial. According to the World Bank report, Balochistan Renewable Energy Development, such systems could reduce electricity costs by up to 50 percent for large mining ventures like Saindak and Reko Diq and offer significant cost advantage (30-60 percent) over traditional fuels.

Realising the potential of distributed renewable energy resources through micro-grids in Balochistan will reduce Pakistan’s need for electricity imports. Potential energy surplus can be exported to other provinces or internationally.

A feasibility study, conducted by National Engineering Services Pakistan, for solarising tube-wells in Balochistan, concluded that installing distributed PV solutions like micro-grids can improve the electricity supply significantly and reduce fuel consumption and any additional expenses borne by the farmers by approximately $0.06/kWh. This means that farmers would be able to cover the cost of the PV supply.

However, micro-grid development faces a set of challenges. These include high initial capital costs, technical and logistical difficulties in remote areas and the need for ongoing maintenance and management. Securing financing is a major hurdle, with $6 billion in proposals stalled due to complicated regulatory frameworks under the National Energy Policy.

Public-private partnerships offer a potential solution. However, lengthy approval processes - taking six months to a year for finalising projects - and focus on larger projects make them less effective for micro-grid initiatives. Regulatory and institutional barriers, such as the absence of a clear off-grid framework and limited local capacity too contribute to the perception of micro-grids as high-risk investments.

Along with the region’s security concerns, these factors contribute to donor reluctance due to the perceived lack of a viable working environment. This reluctance limits funding opportunities and complicates the development of micro-grids, as donors are hesitant to invest in areas where the working environment is seen as unstable or challenging.

For effective implementation of micro-grid solutions in regions with challenges like Balochistan, community involvement is the key. By engaging and educating beneficiaries and stakeholders from the conceptual stage to implementation and maintenance, communities are more likely to see tangible benefits from the system.

This should increase their willingness to pay for and support the project, provided they understand the technology being installed and are included in the decision-making processes. Best practices in Pakistan, such as the installation of solar mini-grids in underserved regions like Swat, Lakki Marwat and Karak by the Pakistan Poverty Alleviation Fund demonstrate the success of a community-centric, community-driven development approach throughout all stages of the project.

The biggest challenge, financing, needs innovative solutions. Some PPPs are supported by mechanisms such as the Viability Gap Fund, which can make projects viable for private investors by helping them recover the losses. The current Public-Private Partnership Authority framework, however, is a lengthy process, often taking six months to a year to conclude. To encourage private sector participation and accelerate project implementation, the government must streamline the approval and negotiation phases of the PPP process by setting clear timelines and reducing bureaucratic hurdles.

For private investors who typically seek larger, more secure opportunities, a cluster approach that aggregates smaller micro-grid projects should be encouraged. By bundling several projects together, the overall scale and financial security increase, making these investments more appealing to private sector players, who are cautious about engaging in smaller, standalone ventures.

Development partners, multilateral development banks and international climate finance institutions can also play key roles in securing concessional financing for micro-grid projects, particularly in off-grid areas. Finally, community mobilisation efforts, including the adoption of innovative financing models, such as prepaid systems, rent-to-own or pay-as-you-go schemes, and community ownership through equity stakes can increase both community participation and financial sustainability.

Given the technical and management challenges communities may face in implementing and maintaining micro-grid projects, a comprehensive capacity-building strategy should not only be developed but also integrated into project budgets. This includes allocating funds for community training and awareness programmes, drawing on successful models from organisations like the PPAF and Aga Khan Rural Support Programme, whose community-driven approaches have proved the viability and sustainability of micro-grid projects.

Investments in this sector are largely limited by the lack of a clear policy framework. While there are some policy documents at the federal level, such as the renewable energy policy and a draft rural electrification strategy, Balochistan lacks a provincial-level policy to support renewable energy, decentralised power generation and rural electrification.

It’s crucial for the provincial government to establish a policy document that sets initial targets and objectives to guide private investors and other stakeholders in investing and scaling up renewable energy projects in the region. Donor coordination platforms exist in Gilgit-Baltistan and Khyber Pakhtunkhwa. However, there’s no such platform available in Balochistan. The government of Balochistan should establish a dedicated donor coordination platform to facilitate efficient donor engagement.

Decentralised micro-grids are an effective solution for the energy needs of regions like Balochistan that face challenges of low population density, outdated infrastructure and limited grid access. By focusing on innovative financing, regulatory support and community involvement, Balochistan can overcome these barriers and effectively exploit its renewable resources.

Implementing these strategies can substantially improve energy access and security in Balochistan, addressing the critical need for electricity for 64 percent of its population currently without access and improving modern energy availability for the 88 percent deprived of reliable heating and cooking arrangements.

The writer is a research assistant at Sustainable Development Policy Institute, Islamabad