Fixing the energy crisis

Ayaz Ahmed

Energy is the most important source of national power. Without adequate sources of energy, no country can achieve economic prosperity and military potency. Unfortunately, Pakistan is plagued by energy shortages resulting in socio-economic and political issues. The initiatives of the incumbent government aimed at resolving disruptive energy crisis seem to take much time given the existence of problems entrenched in the country’s energy sector.

According to various studies, our energy need is expected to grow at an ACGR of 4.37 percent to 6.09 percent in the coming 15 years. On November 28, 2014, Minister of State for Petroleum and Natural Resources Jam Kamal Khan claimed that there would be a 50 percent increase in primary energy demand between 2014 and 2030.

The installed capacity at present – based on February 2015 figures – is 22,571MW. For the period 2015-2018, the government has planned to add 10,400MW to the system by LNG, coal fire, wind, solar and hydro projects. The projected production would take up to 32,971MW installed capacity by the end of year 2018. If the policy continues unchanged and unhindered, load-shedding could end by 2018.

As per the country’s 2014-15 figures, our total energy mix goes something like this: thermal 65 percent, hydropower 31.5 percent, nuclear 3 percent, coal 6.5 percent and wind and solar at 0.5 percent. In this mix, thermal sources are contributing 68 percent and renewable sources 32 percent. Public-sector contribution is 58.5 percent while the private sector’s share is 41.5 percent. The new energy mix would get 52 percent from renewable sources and 48 per cent from thermal by 2018. According to some estimates, the country will install about 53,000MW by the year 2022. However, all that requires policy continuation and strict checks and balances.

There are some challenges that could slow down all initiatives aimed at sorting out our energy crisis. Our bad governance emanating from the leadership crisis is the main reason behind the mounting problems affecting the energy sector. 

The country’s elected representatives are hardly familiar with feasible energy projects. Such incompetence is a blessing in disguise for them because it helps them embark upon rather costly energy projects, thus amassing considerable commissions: the Turkish power plant and the Nandipur Thermal Power Project are two cases in point.

Moreover, the country’s reliance on expensive oil rather than renewable sources is further exacerbating the crisis. Despite being a cash-strapped country, Pakistan spent $6.69 billion on imports of petroleum products and crude oil during July-Nov 2014-15 – which accounted for about a quarter of the country’s total trade bill. This import bill is expected to considerably increase in 2015-16. These oil expenses are increasing electricity prices as well as a burden on our dwindling foreign exchange reserves.

Furthermore, due to outdated and inefficient transmission lines and theft, around 20 percent power goes in vain. According to Former Pepco MD Tahir Basharat Cheema, system losses stand at 20 percent of total power generation and distribution. Out of this, five percent is theft from the system, five percent is due to an outdated system and the remaining 10 percent is owing to technical losses. 

On account of the energy crisis, the country faces a plethora of socio-economic and political issues. A large number of both small and large enterprises are shifting towards other South Asian countries due to long power outages. Resultantly, exports and foreign exchange reserves of the country are fast dwindling. Moreover, a large number of skilled laborers are also becoming jobless and moving abroad.

Power outages are causing joblessness, widespread poverty, social unrest, frustration, frequent disruptive strikes, crime and other psychological problems. The situation caused by lingering load-shedding is rather alarming and needs prompt and prudent measures by the government to produce or manage adequate energy for both domestic and commercial users.

To resolve this energy shortage, the government should diversify its approaches by relying on both renewable and non-renewable sources. First, the leadership of the PML-N along with the provincial setups should make the power ministry competent, responsive and accountable, and lay down stringent checks and balances on it in order to stop corruption.

Second, all incomplete hydropower projects should be completed in time and more small dams should be constructed throughout the country. The construction of the 969MW Neelum-Jhelum Hydro Power Project, 1,410MW Tarbela Extension 4 Hydropower Project, 1,320MW Tarbela Extension 5 Hydropower Project, 720MW Karot Hydropower Project should be expedited as they are in their implementation phase now.

In addition, the 4,500MW Diamer Basha Dam, 4,320MW Dasu Dam and 1,100MW Kohalo Hydropower Project are in the completion phase. The government should also continue its policies without delay in order to complete these hydropower projects in the stipulated time. 

Third, though nuclear energy is fraught with hazards, it still cannot be ignored due to the increasing energy needs. The country’s installed nuclear power plants – Kanupp (137MW), CHAS-NUPP-1(300MW), CHAS-NUPP-11 (300MW) are already adding a total of 737MW to the national grid. Work on CHAS-NUPP-3 and CHAS-NUPP-4 – each with the capacity of 340MW – should be completed in 2016 and 2017, respectively. Moreover, Kanupp-2 and Kanupp-3 with the capacity of 1,100MW each should not be delayed due to change in government and resultant political vendettas.

Fourth, Pakistan can produce 4,500MW electricity from the gas received via the Iran-Pakistan (IP) gas pipeline. The country should complete its portion of 785 kilometres of the pipeline with Chinese and Russian financial and technical assistance; the ground is clear after the Iran and P5+1 nuclear deal. Moreover, the federal government should persuade Turkmenistan and Afghanistan into expediting the work of the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline. The pipeline will provide Pakistan with 1.32 bcfd (billion cubic feet/day) gas.

The China-Pakistan Economic Corridor is expected to add 10,400MW to the national grid by 2018. The project should not be delayed due to security, administrative and geopolitical hurdles. Moreover, the LNG agreement worth $21 billion signed with Qatar in February 2015 aimed at supplying 500 million cubic feet a day (mcfd) LNG to Pakistan should be free from corruption and administrative issues. 

Fifth, despite possessing 175 billion tones of ignite coal in Thar, the country still lags behind in terms of generating electricity from this source. Coal contributes around 40 percent to the world’s power generation. Therefore, work on the 6,600MW Gadani Power Project and the Thar coal project – which can produce 4,000MW – should start. However, extensive care should be taken because coal is not eco-friendly.

Electricity can also be produced by solar and wind sources. The wind power plants in Ghoru and Jhimpir in Sindh are already producing 200MW electricity. The wind corridor in Sindh can potentially help produce 43,000 MW power. The Punjab government has planned to produce 1,000MW from the photovoltaic solar field in Bahawalpur in which 100MW power generation became operational in May 2015. However, the cost of wind and solar energy is around Rs20 and Rs15.5 per unit respectively; they are thus relatively expensive.

The country is also rich in shale gas possessing some 51 trillion cubic feet of shale according to the US Energy Information and Administration (EIA). Shale gas needs advanced technology and considerable financial resources, so it can be used in the future when its exploration is inexpensive and the country acquires the technology.

The government should not be indifferent to the prospect of diversifying the energy resources of the country. This is the primary means available to sort out the enduring socio-economic issues that have been haunting the nation.

The writer is the editor of The Asia Watch.


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