Default Energy Crisis In Pakistan

Published Date: 02 Nov 2017

Default  Energy Crisis In Pakistan

"The shortfall in the supply of energy to an economy results in energy crises".

it is usually due to the shortage of oil and electricity. The crisis has effects on the economy. Our energy exploration sector has not been able to find energy resources for the last 20 years. Our industries have stopped working due to insufficient energy supply. Price of oil has gone out of reach. alternate resourses like solar, biogas and other methods are being used at domestic level. 

In 1960s AND 1970S, Tarbela and Mangla dams were put into operation. These projects were the biggest energy projects in pakistan. These projects were long-term projects. In the next years, no action in the field of energy has been done. The short-sightedness is the reason of energy crisis in our country. every government was only issuing projects not issuing funds. The reason was that energy projects require huge investments and sacrifice. Every Government has an attitude of delaying new projects and it remained common habbit. when things start getting out of control, Quick and foolish projects came into sought, Like rental power project. This project was the waste of our national income and also huge corruption scandals were seen in this project. Let’s have a look at the energy shortfall stats of the last few years;

In 2008 when the new Government came the gap between demand and supply was 4,000MW indicating a 35% shortage of electricity. and last year it was about 6,500MW. The recent energy crisis has not appeared overnight WAPDA claim that in 2002 the government was officially warned about the approaching electricity crisis and was asked to take immediate actions to increase generation capacity. The timely warning was thrown away. The attitude of the relevant authorities has contributed to the growth of crisis. WAPDA has the major role in this issue and the common man blames WAPDA for his sufferings.

There are irrelevant people have been appointed to run energy offices. There are cases when the crucial positions have been used as incentives during political bargaining. The non-serious attitude towards sensitive energy positions is enough to explain how the field of energy has been traditionally toyed with.

In order to tackle the existing crisis and ensure a prosperous energy future, the backbone of the future energy policies would have to be reliance on domestic resources (hydropower, coal and solar and wind energy) and energy conservation. Decisions on energy projects should revolve around national interest rather than political and personal gains. Energy offices should be run by qualified, committed and deserving people equipped with due mandate. Relevant ministries and departments should also be overhauled.

INFLATION AND ENERGY CRISIS IN PAKISTAN

Pakistan is facing a number of issues in the economic and political development. One of them is the ever-increasing inflationary pressure on the public. common man considers the government responsible for this inflation. Government gave the blunt gift of inflation, unemployment, terrorism and energy crisis to the public. The government offended the masses. During five years the prices ofessential domestic commodities like vegetables, chicken etc. showed increasing trend of prices. According to Dawn 1st march 2013 reports the inflation rate is 7.4% and according to non-official reports like UN 8.6% World Bank 8.9% and Asian Development Bank 9.1%. There are three main resources used to fulfil the energy requirements Electricity, Fuel and Gas. Despite having the treasure of natural energy resources, Pakistan’s energy production plants are not fulfilling the country’s requirements effectively. The present energy crisis is affecting the economy entirely. WAPDA is just fulfilling the country’s energy need near to 46% the remaining is fulfilled by the alternative expensive resources. The energy crisis created cost pull inflation in the country, as electricity is the key material for any production plant. There is a general observation of 5-10 hours of load shedding, but some times it hits the level of 18 hours. Even the industrial capital of Pakistan (Karachi) is suffering from the same situation.

Why in the era of energy reservation Pakistan is not utilizing its energy resources? Pakistan is just relaying on the electricity production by Dams. But Pakistan has not enough dams or water to generate electricity. Although WAPADA is enjoying the monopoly but government has to pay 2 rupee/unit as incentive. Our neighbouring country India has built a number of Dams to overcome the energy crisis but Pakistan government has paid no heed on this issue. Many projects are delayed due to provincialism the glaring example is of Kala Bagh Dam. The costly machinery amounted US $9 million is now functionless due to (rust) delay in the construction of Kala Bagh Dam, Some scientists predicted that in next 10year world has to face the water shortage also.

If the government fails to construct dams for the generation of electricity due to Provincialism government should have to adopt alternative options to accomplish the energy needs of the country. As Iran has large treasure of natural energy resources like natural gas and fuel, despite this Iran is engaged in the attainment of nuclear power generation plant. Pakistan, despite being an atomic power does not think about the nuclear electric generation plant. International community is imposing sanctions on Iran due to uranium enrichment but Iran pays no heed to them. Then why is the Pakistani government reluctant to use its nuclear plants to tackle energy crisis?

Secondly, Pakistan’s western area especially Thar is enriched by natural coal, which is the fifth largest treasure of the world. Pakistan has signed a contract with China to generate 300 Mega watts by coal deposits in 2003, but due to some reasons it has not been completed till now.

Industrialists due to high prices of electricity use alternative resources (petrol) in electric generators to fulfil their energy needs but, the fuel (petrol) prices in international market cross the psychological limits of US $110/beryl recently. The high prices of fuel and electricity created a long-term cost pull inflation (increase in the prices of raw material of one commodity cause high prices of other commodities). 

There are a lot of expectations with the new government as Nawaz Sharif pledged that if he came in rule he will fix the prices of domestic commodities like vegetables oil, floor, sugar and rice for two years. Now the new government should take basic steps to eradicate inflation. I think energy crisis is the real cause of this inflationary pressure. We are hopeful that new government will take some positive steps to fulfil its promises and public expectations. 

HYDEL ENERGY

Water flowing in the rivers has kinetic energy. One the they are used to drive the turbine and produce electricity the power generated as hydel energy.

Power produced by the turbine depends on quantity of water flowing/minute and the head of water available.

Mostly river flows by melting glaciers on High Mountain. One the water starts flowing in the valley its changes its head very rapidly. This energy can be converted into electrical energy.

Two methods are normally used:

Dams

Run of the river projects.

In case of Dams the water flow is restricted by the making a huge storage device and the head of water is incresaesd, the water then is allows to flow by means of gates and pass through the turbine, the head of reservoir level is maintained to provide uniform power and the water stored in the season additionally is used for irrigation purpose in the dry season.

In the run of river project the water is diverted through the tunnel and once it gain the head allowed to fall and pass through the turbine and back too river. The water in these projects is continuously flowing and not being stored.

Geographical situation is paramount importance in choosing the suitable site for the hydel project and it evolves a very serious time and money consuming study.

Once a site is located further detailed feasibility study is required before preceding any serious effort to start the work.

The feasibility study should include following field work.

1: Detailed Mapping of the area.

2: Topographic study of the area.

3: seismic refraction study.

4: River flow data.

5: Weather data contain Temperature,Pressures,Rain Humidity.

6: Water sampling and testing.

7: Environmental study.

8: Social impact.

9: Identification of stake holders of the area.

PAKISTAN MAJOR DAMS

1: Warsak Dam

2: Mangla Dam

3: Tarbela Dam

1: Warsak Dam:

The gigantic multi-purpose Warsak Dam is situated 30 kms north-west of Peshawar in the heart of tribal territory. It has a total generating capacity of 240,000 kw and will eventually serve to irrigate 110,000 acres of land.

2: Mangla Dam:

World's third largest earth-filled dam is only 115 km south-east of Rawalpindi. One has to turn left from Dina Town and the dam on river Jhelum is about 14 km to the east. The dam is 3,353 meters long and 116 meters high above the river bed. It is designed to store 5.88 MAF water and also used for power generation. In the centre of the dam there is a Gakkhar Fort from where one can have a panoramic view of the lake. For permit to visit the dam, please contact PRO, WAPDA, Mangla. A NOC from the Ministry of Interior is required for foreigners only.

3: Tarbela Dam:

The world's largest earth-filled dam on one of the world's most important rivers - the Indus - is 103 km from Rawalpindi. The dam was completed in 1976 at a cost of Rs.18.5 billion. Over 15,000 Pakistani and 800 foreign workers and engineers worked during its construction. It is the biggest hydel power station in Pakistan having a capacity of generating 3,478 MW of electricity. Its reservoir is 97 km long with a depth of 137 meters while total area of the lake is 260 sq.km. Permits are required for visiting the Dam. Please contact Public Relations Officer (PRO), Water and Power Development Authority (WAPDA), Tarbela (Tel: 051-568941-2). A No-Objection Certificate (NOC) from the Ministry of Interior (Shaheed-e-Millat Sectt.), Islamabad is also required for foreign visitors.

HYDEL ENEGRY AND ITS CRISIS IN PAKISTAN

The energy crisis starts from 1990 and still Pakistan is in the crisis of these all as before. The latest and perhaps the most troublesome crisis faced by the Pakistani nation these days is the shortage in supply of electricity. The country is facing a huge electric power crisis these days. Though it has been more than a year since when the country is facing this crisis, but till now no proper solution has been made to this problem neither any proper planning has come into existence since the symptoms and begging of this short supply of electricity. While rolling blackouts or load shedding as it is locally known has always been a staple of daily life in Pakistan, the problem has become acute in the last couple of years.

This crisis appears insurmountable in the near or even long-term future, unless proper understanding and correct implementation is undertaken on priority basis. At present total power production capacity in the country is about 19,500 MW, out of which Hydel Power is only 6,500 MW, balance of 13,000 MW is thermal either using Natural Gas or Furnace Oil. Small capacity of 450 MW is Nuclear and only 150 MW is through coal.

It is very important to understand the consequence of the prevailing situation. Current price of furnace oil is about Rs.49,000 per ton, which amounts up to Rs.49/- per kg. On an average one kg of furnace oil produces 3.8 kWh of electricity. Thus, the cost of furnace oil for generating one unit of electricity is about Rs.13. On top of this the fixed cost of a thermal plant works out to be about Rs.3 per unit. Therefore, one unit (kWh) of the electricity produced by all thermal plants using furnace oil is Rs.16 per unit. According to WAPDA/IPP agreement, the private power producers will charge WAPDA the actual fuel cost for which they have a direct contract with PSO. As we all know that WAPDA tariff charged from the consumers is about Rs.5 per unit (kWh).

The production cost of furnace oil electricity is Rs.16 per unit, add to it the transmission, distribution cost (including loses), "the total cost of such electricity works out to approximately Rs.22 per kWh. The difference between WAPDA tariff and the furnace oil electricity is Rs.17 per kWh." It is estimated that the country consumes at least 25 billion units of electricity produced annually through furnace oil, which amounts to the total deficit of Rs.425 Billion. If WAPDA has to balance its books it would require a subsidy of Rs.425 Billion. This deficit is somewhat reduced due to cheap power produced through hydel energy and natural gas, but the deficit cannot change substantially, unless bulk of electricity is produced through hydel energy. Obviously, a deficit of Rs.300-350 Billion cannot be sustained, the government does not have resources to pay such a huge subsidy, and it is also not feasible to increase the power tariff very much. Therefore the power crisis is far greater than what is being perceived. In the absence of extremely heavy subsidy, WAPDA is delaying payments to IPPs and also to the oil companies. The result is that IPPs are now producing much less electricity than their capacity.

Thermal energy

Thermal energy is the thermal type of energy. With all known history available, wood always used for heating and cooking. In 2nd world war fossils fuels entered in the form of coal to get energy. Until liquid fuels were discovered and because of their convinces of transportation they took over as major of energy source.

Once the steam engines were invented then the coal or liquid fuels was burnt in the in boilers and heat producers steam which is used to drive an electrical generators, or any other mechanical devices.

Rudolph diesel invention of diesel engine revolution the energy concept and today we see sine the majority of machine moving on diesel engines.

The choice of gensets strictly depends on the requirement of client, before ordering a power plant following points to be considered

Expected demand of the power

Type of fuel required

Space available for the power plant

Availability of gun sets

Availability of local service back up and stock of parts

Price is paramount importance and hidden expenses should be locked carefully.

The major manufactures and suppliers of gensets based on internal combustion engines are given below

Man

Wartsila

Caterpillar

Jen bacher

Waukesha

Mitsubishi

Detroit diesel

Rolls Royce

Internal combustion engines can obtain 30_50% thermal efficiency. its means that around 50%energy is wasted in the form of exhaust gases, cooling system and radiations. therefore for larger plants heat recovery system are utilized.

CRISIS OF THERMAL ENERGY

The oil crisis facing the world, is not about supply or about the increase in demand. It is about the speculators who are pumping huge amounts of money into forecasting a serious shortage ahead. Not now but in the future. And that the prices will escalate enough for them to make a killing. If one looks at the real picture, there is no shortage of oil, there has been no shutdown of any major producer, nor has there been a sudden jump in the import from any large consumer. The Chinese import for their industrialisation is not more than 10 percent annually. This is certainly not enough for the huge jump in the world crude rates. This jump is matched by the phenomenal profits of the oil companies and of course the oil producing countries. The thirst for profits of the oil traders has benefited the oil producers - Iran being a major beneficiary.

The US government must be wondering at the irony of this windfall benefiting a prime enemy of American and Israeli interests at the cost of millions of innocent citizens of the US and Europe, engineered by the greasy gnomes of the oil trade. There is no threat of an oil embargo, nor of a war, it is just pure speculation, funded by the huge mountains of American and European cash at the disposal of the Soroses of the Oil trade. They stand to make a killing at the expense of hapless citizens of the world. As I had written in an earlier piece as far back as 2005, when an attack on Iran was imminent, that the rise in oil at 100 $ a barrel would impact on the food prices has proved prophetic with the current sky high prices of bread in Europe and America.

In the meantime we poor Pakistanis are suffering with 50 percent living below the poverty line, and many more being pushed under thanks to the current oil crisis which has managed to create tsunami that is a threat worldwide. With no remedy in sight. Electricity riots are already a common sight but the frequency of breadlines breaking into riots is increasing daily, not just in Somalia but in parts of the third world where we thought wheat was never in critical shortage. The riots in Pakistan are for two reasons. Firstly, the price - a worldwide phenomenon, and second, a physical shortage due mainly to incompetence in the many layers of our government.

The looming energy crisis in Pakistan

Energy costs, from where they stand now, could rise by more than 50 percent in the next few years. The cost of power on this scale would be difficult to manage by most emerging economies All oil-consuming countries, particularly the third world have suffered due to the consistently rising demand-driven cost of energy 

From 2004 onwards, the price of oil started soaring in the international market, and for the first time in October 2004, oil prices crossed the benchmark of US$ 50 per barrel. It continued to fluctuate but kept moving up each year and in 2007 briefly crossed US$ 100 per barrel. For the past few days it has been hovering at US$ 103 plus per barrel. The oil industry has been plagued by two main deficiencies which is a drop in exploration activity following the economic slowdown of the mid-1990s. Coupled with that, the global refining capacity did not keep pace with the rise in demand by developing countries, especially in China, India and the Far East beginning 2000. Yet, both OPEC and the vertically integrated oil industry have displayed no interest in increasing the output, which needs additional investment in exploration and at last 4 to 5 years to build additional refining capacity.

All oil-consuming countries, particularly the third world countries have suffered due to the consistently rising demand-driven cost of energy. Pakistan is one of the countries worst hit by the rise in price of energy. The domestic energy generation sources are restricted to hydropower, limited production of oil and gas, and negligible use of coal as the input for power generation. Even the conversion of cement industry to use coal did not help much as the required quantity was being imported from Indonesia and some other countries. This brings us to the shortage being faced in supply of electricity for domestic and industrial purposes (In figures I and II below the position of domestic demand and supply for electrical energy is highlighted).

According to the PPIB website, during 2008 Pakistan would be short of electricity supply to the tune of 1,457 mwh. Given this supply shortfall, and few choices for plugging this gap with indigenous energy resources; the planned and projected growth in GDP appears highly unlikely. If Pakistan chooses to rely on fossil fuel to generate electricity it would be a constant burden on the country’s foreign exchange reserves, and due to continuously increasing price of oil, our exportable surplus would become progressively more uncompetitive and goods for local consumption would become costlier. This may result in closure/ bankruptcy of some industries and the country could face some economic weaknesses. It is therefore imperative that Pakistan finds workable remedies to the looming energy crises and remedies are found with practical solutions to facing up to the problems arising out of growing population and the growing energy needs to support reasonable GDP growth.

For the last 10 years Pakistan has been importing crude oil and refined petroleum products to generate electricity, besides meeting the increasing demands of its expanding transport sector.

ALTERNATE ENERGY RESOURCES AND THEIR SOLUTION

Nuclear energy:

KANUPP was established with the help of the Canadian Government in the 1960’s and nearing end of its lifecycle. The "Chashrna Nuclear Power Plant" has been designed and built in collaboration with People’s Republic of China, and is being operated and maintained by Pakistani scientists and engineers, delivering full power of 300 mw to the national grid. With the Karachi Nuclear Power Plant also operational since 1971, Pakistan is the only country in the Muslim World operating nuclear power plants. Nuclear power is safe, economical and environment-friendly.

Natural gas exploration:

Pakistan still has huge untapped gas reserves. If we allocate more resources to their exploration there is a possibility that in the near future part of the energy resource gap may be met from new reserves.The current gas prices and the limits they place on increasing the profitability of this sector would not attract any reasonable amount of investment, whether local or foreign, since the cost of exploration has gone up substantially and current well head prices do not justify further investment at the current rate of return. The other factor discouraging exploration of new gas reserves, which would continue to haunt us, is the law and order situation in most of the areas where gas finds can be a possibility.

Natural gas import:

The IPI (Iran-Pakistan-India) gas pipeline project is also a long story (global political situation is not being discussed for obvious reasons) but the current plan to lay the 54 inch pipeline through the coastal area has a major flaw. Even if Pakistan starts building the pipeline on priority basis, it may take 5 years to complete the project (i.e. by 2013), and it may plug the energy gap only thereafter.

Solar energy:

At present, except for low-ampere domestic use, solar energy is a distant possibility, although in a country like Pakistan where clouds are a rarity for most part of the year it could be a workable option. There is a simple way of harnessing this energy for the industry, which is dependent on steam generation through oil or gas-fired boilers. Water can be pre-heated by converging sun rays on tanks made of metals/alloys that can easily absorb the heat. This pre-heating can reduce the cost of producing steam and reduce the energy resource gap to an extent, though negligible.

Coal:

Pakistan has enormous coal reserves (probably the third largest in the world) that remain untapped and even the industries that have converted from gas to coal as their energy source have to import coal mostly from Indonesia, which is again a drain on Pakistan’s scarce foreign exchange reserves.

Wind energy:

The government is following a policy to encourage investment in wind energy. Two corridors have been identified in Sindh, and land has been allocated to various wind energy projects. The issues confronting the wind power sector are as under:

(a) Scarcity of equipment: wind power equipment is in short supply, the world over. Propelled by GDP growth needs, demand for energy has been growing globally, and as cost of energy derived from fossil fuels has increased two-fold during the last three years, the demand of wind power equipment has also grown manifold.

(b) Due to growth in demand and increase in the cost of metals, especially steel and its products, the price of equipment required for wind power has also increased manifold.

(e) Although the cost of equipment and know how is high, the advantages of wind power are quantifiable, and after a number of years, electricity generated by this technology would become the cheapest compared to alternate sources of energy at that point of time.

To install this initially expensive but eventually very economical technology, in the first instance Pakistan may start importing and installing the equipment to generate electricity but in the long run it must encourage domestic production of the equipment. If Pakistan can replicate the sophisticated machinery and equipment for uranium enrichment and also can produce or cause to be produced very high RPM centrifuges, machinery, electric circuits, vacuum valves and allied equipment then, probably, then it also has the capacity to produce equipment for wind power. In this regard, Pakistan can also enter into technology transfer agreements with foreign manufacturers.The considerations that place wind energy on top of the list is mainly due to the fact that generating energy using this technology requires no fuel, and the energy production process does not pollute the environment.

CONCLUSION

* Conclusion

After all the literature that we reviewed we can sketch up some rough hurdles that are there that won’t let implement our identified solutions. These hurdles are explained in short below;

* Hurdles Implementing the Solutions to this Crisis:

** a Circular Debt:

We identified that the Government is not serious in paying the IPP’s circular Debt. Once this debt is paid off, the IPP’s can pay off their petroleum import expenses and start producing at optimum levels. As long as the debt is left un-paid, we may continue to have such crisis forever.

**b Line Losses:

We identified that WAPDA is facing huge line losses due to electricity theft or illegal usage of electricity. The burden is beard by the Government so in order to cover up such losses and to ensure adequate and clean facility of electricity; we must ensure that no body breaks into the transmission system.

**c Inadequate Power Generation Capacity:

We identified that most of the systems here run on either Gas or Coal i-e they are thermal systems. Both Gas and Coal are considered as scarce and expensive commodities for electricity producers. We must not rely mostly on such production systems. We must ensure usage of efficient Thermal plants instead of in-efficient ones to conserve the scarce resources.

**d Lack of Capacity of Transmission of Electricity:

We identified that most electricity transmission lines here in Pakistan are incapable of transmitting electric voltages of more than two phases. This makes them in-compatible to carry higher voltages, so even if we produce 3 phase electricity, it would be of no use in this case. We need to upgrade our transmission lines.

**e Lack of Capacity of Distribution of Electricity:

We identified that we lack high quality lower end grids that are used to carry electricity from power houses to the ultimate consumers via grid stations. The infrastructure is old and deteriorated. The system is unable to sustain extreme weather conditions hence most of the grids shut down at extreme temperature or either completely stops working.

**f Privatization of K.E.S.C:

After the privatization of K.E.S.C is enhanced its production capacity but the Government for a certain reasons did not provide it with adequate distribution network. As production alone is not sufficient, the Government must provide a clean transmission system for IPP’s especially to K.E.S.C as it is responsible to provide electricity to two of our provinces Sindh and Balouchistan.

**g Government’s dependence on IPP’s:

The IPP’s at current are responsible to provide electricity to half of our country. As the Govt. did not pay their debt so now they are charging or demanding higher per unit prices from the consumers. This hike in electricity prices is affecting not only our local industries and homes but is also affecting our exports of manufacturing goods. The govt. must intervene and pay out the circular debt. Or provide subsidy on electricity.

Recommendations

Govt. must pay circular debt.

Govt. must invest to cover up line losses.

Industries that consume 32% of our electricity, must apply Energy Conservation Systems and Management measures.

They can start producing their own energy with their own investment without depending upon the grid.

Industrialists and new investors must consider the Energy Sector as good an investment as any other. Needs image building.

Govt. must convert from inefficient gas plants to efficient ones in order to conserve electric energy.

Govt. must consider investing in Solar Energy plants to produce Electricity as they provide free energy, and are less mechanical than Wind Energy Plants.