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Energy Crisis in Pakistan

Energy Crisis in Pakistan

Energy crisis in Pakistan Outline: Introduction Pakistan is a victim of energy crisis A shortfall of energy is called energy crisis Energy crisis is not specific to Pakistan Causes behind the energy crisis Poor management Circular debt Power theft and Power wastage Corruption and lack of accountability Mis-allocation of resources Increasing price of oil in international market In past no efforts were made Alternative energy resources: Hard technologies and Soft technologies Hard technologies:

Nuclear power Natural gas Natural gas import Coal LNG Soft technologies: Hydropower Solar energy Wind energy Biomass production Remedies: Renewable resources must to counter energy crisis Pure financial management Resolving energy crisis should be priority of government Conclusion Pakistan has been facing energy crisis since four years which had badly affected and destroyed industrial and economical sector that lead to unemployment.

So as the situation stands today, despite having significant reserves of coal, natural gas and hydropower generation, three are hardly any immediate solution to resolve this issue. The major reasons which have lead to energy crisis are poor management, circular debt, corruption, misallocation of resources, increasing price of oil in international market and in past no efforts were mace to cope with the coming shortage of electricity.

In Pakistan there are enough resources from which government can develop electricity, like natural gas exploration, solar energy, wind energy and coal. But we cannot overcome on energy shortage only through these alternatives but the government and relevant departments have to take some efficient measures for instance renewable resources should be used, finance sector must play its role and resolving energy crisis should be priority of government. Pakistan is rich in natural resources the only thing which is required, is utilization of these resources with utmost efficiency.

Since summer 2007 Pakistan is in the grip of serious energy crisis that is affecting all the basic need of our life because it is directly proportional to the development of economy and political stability is also linked with the availability of resources. In the response of enormous increase in the demand of electricity Pakistan is producing about 1, 1500 MW per day while it needs around 15,000 to 20000 MW per day hence the deficit is about 4000 to 9000 MW per day. “Crisis” has been coined by a Greek word which means ‘decisive moment’.

Crisis is declared when something has gone to a level where action must be taken to avoid complete disaster or breakdown. An energy crisis is any great shortfall in the supply of energy resources to an economy. The term “energy crisis” is not specific to Pakistan it is an international phenomenon. There has an enormous increase in the global demand for energy in recent years as a result of industrial development. Supply of energy is far less than the actual demand. In 1970 and in 1990 there has energy crisis due to peaking oil production in industrial nations, in Germany, United States, and Canada and due to the Gulf war respectively.

For many years North Korea has had and due to financial mismanagement Zimbabwe has experienced a shortage of energy supplies for many years. Hence all theses historical events of energy crisis shows that energy shortage can loom on any country’s head no matter how well developed it is. An important question about the ongoing power shortage is, being raised is that why the energy crisis has overcome our country despite the fact that statistics about energy resources, demand and consumption are well articulated.

The energy sector has been ignored and lopsided priorities of government had lead to energy crisis. Delay decision making and flawed strategies in Iran-Pakistan-India (IPI) gas pipeline, Turkmenistan, Afghanistan, Pakistan and India (TAPI) pipeline and Qatar transitional gas pipelines are the best example of poor management of relevant departments. In Pakistan power sector has effectively become hostage of Circular Debt which is created when one party fails to clear its dues to the second party. The second party in turn defaults on their payment commitments towards third party.

However inefficiency in collection of revenues from the private sector and ineffective contractual agreements between Pakistan Electric Power Company (PEPCO) and Karachi Electric Supply Company (KESC) are the major causes for interoperate debt. Power theft and power wastage or transmission losses are other reason which paved the way for loadshedding. Line losses, mainly power theft alone contributed around 125 billion to the circular debt. Transmission losses happen when due to poor infrastructure consumer cannot get enough electricity to fulfill daily requirements.

Mere rise in power tariff could not overcome on the power theft and transmission losses. Corruption in pertinent departments of electricity and lack of accountability on part of those who stay at the helm of affairs is another reason of energy crisis in Pakistan. The financial scam in the rental power plants (RPPs) is a recent example of corruption in energy sector. In Pakistan energy crisis can be subjugated if there are strict punishments for those who are responsible for such shady deeds. Though Pakistan is rich in coal and natural gas reserves but misallocation of these reserves is another reason of energy crisis in Pakistan.

Against the potential of 28. 902 trillion reserves of gas we use only 1. 460 trillion. Pakistan has huge reserves of coal (186 billion ton) but only 373 million tons are utilized. Pakistan has potential of 40000 MW hydropower, whereas the installed hydropower capacity of Pakistan, last year was 6555 MW. If Pakistan use only coal reserves with utmost efficiency then it will exceed equivalent oil reserves of Saudi Arabia and Iran. From 2004 onwards, the price of oil started soaring in the international market. The price continues to fluctuate but kept moving up each year, now the oil prices hovering around 10 per barrel. All oil consuming countries, have suffered due to consistent rising demand- driven cost of energy. Pakistan is one of the country worst hit by the rise in price energy because for last ten years, Pakistan has been importing crude oil and refined petroleum products to generate electricity. Unfortunately when Pakistan was about to confront the energy crisis government did not efficient measures to tackle this problem in future. In past no efforts were made to ensure increase in the power generation capacity along with the increase in the correspondent population growth.

Hence today we have no immediate solution to generate additional power through any source because a unit takes atleast2-3 years to establish properly and more than five years required to construct a hydro electric dam. Regards energy production there are two proposals——one is in the favor of use of hard technologies and there is in the favor of soft technologies. Hard technologies are nuclear energy, natural gas exploration, LNG and coal while soft technologies are hydroelectricity, solar energy, and wind energy and biomass production.

The dissension between the two is not proponents is not on the ground of technological point of view but economical, political and value laden. The proponents of hard technology believe that we must expand our production because the demand of energy will continue to rise; while the proponents of soft technology emphasis on its conservation. Nuclear is a clean source of electricity and provides base load of the annual power duration curve. In the developed countries like USA and France, nuclear power generation forms a major share of generation mix.

In Pakistan, progress on the nuclear power generation is slow and at present nuclear power makes only two to three percent of total generation. Natural gas as been Pakistan’s key input for energy including for power sector. Pakistan has huge untapped gas reserves and if we allocate more resources to gas exploration then there is a chance that in the near future part of the energy resources gap may be met from new reserves. Natural gas import is an open option for the end of energy crisis in our country.

The import of natural gas from Iran- Pakistan-India (IPI) gas pipeline is a victim of felonious policies and global politics. The carelessness of relevant department can be estimated from the fact that if Pakistan starts building the pipeline on priority basis, it may take five years to complete the project and it may plug the energy gap only thereafter. Coal currently plays a minor role in Pakistan’s energy mix but according to conservative estimates Pakistan has potential to produce electricity from coal more than 100,000 MW.

Coal contributes 60 to 70% of total electricity supplied in a number of developed countries including USA, UK and Australia. LNG is a possibility but due to some issues this option is not reliable and long lasting. There is a global shortage of LNG and at present no supplier is available, so Pakistan has to enter into a long- term agreement with supplier. So the gas could be purchased only from the ready markets that are over sold. Water is flowing in rivers has kinetic energy. Once it is used to drive the turbine and produce electricity, the power thus generate is called hydro energy.

Power produced by the turbines depends on quantity of water flowing per minute and the load of water available. Hydropower is cheapest and environment friendly sources of energy, however after the construction of Mangla and Tarbela reservoir-based power generation projects, no major project was constructed with the exception of Ghezi, Barotha hydro power project which is a peaking plant. Solar energy has many different types and all of them rely on direct energy from sun—biomass conversion, geothermal energy and wind energy are all alternatively derived from solar energy.

Photovoltaic (PV) solar cells directly convert sunlight into electricity. Though Pakistan has clear cut edge but building of solar power plant is still in initial process. Wind energy is a process by which wind is used to generate mechanical power or electricity. Wind turns the blades which spin a shift, which connected to a generator and makes electricity. Pakistan is building wind power in Jhimpir, Gharo, Keti Randar and Bin Qasim in Sindh. Biomass energy is another form of renewable energy sources and it is derived from living or dead organisms like plants, waste material and alcohol mostly.

Methane is produced through the decomposition of waste material and on burning this methane produces electricity. Though Pakistan had squandered this opportunity to produce electricity from municipal waste but now Alternative Energy Development Board (AEDB0 has planned to generate electricity from garbage in future. The dilemma of Pakistan power sector has been that it not only failed to make addition in the generation capacity but due to poor management, it also could not use the existing power plants to their full potential.

In order to avoid the power cut and loadshedding, the government should renewable energy resources. Tapping of renewable energy resources of wind, solar and bio fuels, it is necessary to resolve the prevailing energy crisis and reduce the growing trade deficit. Only technology is needed to tap these resources available in abundance. The country is facing power shortage of over 4000MW whereas it could generate 10,000MW from coal alone. Indus River System alone had hydro power potential of 35,000 MW.

India is generating 9,000MW form wind energy where as Pakistan had a potential to generate 50,000MW from its 1046 kilometer coastline. Financial sector must play its role in resolving the ongoing energy crisis in the country, which is hampering both business activities and life of common man. A quick remedy is needed to overcome the immediate financial requirements, for this reason the government should first focus on reduction of its direct circular debt of Rs 300 billion through issuance of Pakistan Investment Bonds (PIBs) priority basis.

The government may look into the possibility of incremental financing through PIBs which is considered to be financing to a large number of banks and development finance institution. If Pakistan undertakes a series of initiatives to steer the country out of the debilitating power crisis then the country will overcome electricity shortage within a couple of years. Government should attaching top priorities to resolve the energy crisis.

For many years not a single megawatt is added to the power generation which, had led to present energy crisis. So instead of blaming previous government for loadshedding, the current government should take immediate steps to tackle the prevailing crisis. For a reliable system around 2500 to 3000 MW generation capacity over and above planned is needed to be added every year. Energy production of any country is the measure of stability of its economy. No country can achieve high economic growth without producing sufficient energy.

Though Pakistan is rich in natural energy reserves and if these renewable resources will be used with utmost efficiency then it can produce enough electricity in abundance, but unfortunately it is facing worst energy shortage of its history. To produce enough electricity and for its conservation some measures should be taken on the individual and national level. Because conservation is cheaper than production of energy and it means to further protect the environment. Government should also work on corruption in relevant departments. Without taking these measures Pakistan cannot overcome on the prevailing energy crisis.