Energy plants and large water reservoirs such as Kalabagh

Energy is essential for the maintenance
and development of human life as well as for economic activities. Most of
developing countries and emerging powers plan well in advance to ensure not
only sufficient energy for the present but also for the future requirements.

Today, Pakistan is facing a
looming energy crisis with shortfall that varies from 5000-7000MW. Due to that
shortfall, long loadshadings at one hand have adversely affected individual and
social life. While on the other hand it has resulted into shut down of a number
of industrial units. It had not only affected the attitude of the people and
forced them to come on the roads as protest but also plays a destructive role
by shattering the confidence of the investors and the industrialists.

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Pakistan’s power generation
is based on fossil fuels (64.12%), hydro-electric power (33.30%), nuclear plant
power (2.5%), and renewable sources (0.41%). In the present situation Pakistan
needs 6500MW energy to curb current problems.

These are some
recommendations to increase the capacity of power generation up to required.

The developments of the
hydro-electric plants and large water reservoirs such as Kalabagh dam (3600MW)
should be begin immediately. Pakistan, at present, produces approximately 0.2%
of its total energy through coal. Compare to this global average of 40%
electricity production through coal. Pakistan should utilise this source to
produce electricity at cheap rate.

Domestic applications of
solar power should be publicised and encouraged. Utilising financial resources
effectively to make sure independent power producers (IPPs) and power plants
based on oil operate to their maximum capacity. Immediate steps should be taken
to reduce transmission losses and power theft. It is best time to take concrete
steps to combat the current energy crisis.

The
country has suffered through deadly hot spells in the past, but the lethality
of this latest one was astounding. According to Pakistani officials, high
temperatures killed more than 1,200 people — most of them in Karachi — over a
one-week period. The true figure could be much higher, given the likelihood of
unreported deaths.
In effect, this heat wave killed more than twice as many people in a matter of
days as terrorism has over the entire year (as of late June, about 530 Pakistani
civilians had died in terrorist attacks in 2015).

This crisis was exacerbated by rampant power outages. Many
households had little electricity to operate fans or air conditioning units; in
Karachi, some complained of having no power for more than 12 hours per day.
While the rich ran emergency generators, the less fortunate faced stifling
conditions that hastened heatstroke and, often enough, death. One woman in
Karachi became sick and later died after suffering in an electricity-deprived
home that her son described as “like a baking oven.” Power cuts even denied
dignity to those killed by the heat wave. CNN’s Saima Mohsin reported that one
charity-run morgue had no electricity to keep bodies cool, resulting in an
overpowering “stench of death.”

Sadly, such energy woes aren’t surprising.

Deep and Destabilizing                                                          

Pakistan has been convulsed by power outages for years.
Electricity deficits on any given day may range from 4,500 to 5,000 megawatts (MW),
though they’ve sometimes soared to 8,500 MW — more than 40 percent of national
demand. These figures are somewhat comparable to those of India (which has
experienced shortfalls between 3,000 and 7,500 MW over the last year or so).
Many other countries in the developing world, particularly in Africa, also
experience power shortfalls of varying levels. Developed countries experience
deficits less frequently, though they sometimes face localized modest shortages
(for example, in February 2011, power plant breakdowns caused deficits in
Texas).

Pakistan’s supply shortages, however, merely represent the tip
of an immense iceberg.

As I argue in Pakistan’s Interminable Energy Crisis, a new
Wilson Center report, Pakistan’s energy problems are rooted more in shortages
of governance than of supply. The energy sector suffers from transmission and
distribution (T) losses that have exceeded 30 percent, as well as from
several billion dollars of debt. The losses are caused by bad equipment, poor
maintenance, and energy theft. The debt — often described as “circular” in
nature — is a consequence of cash flow problems. Energy generators,
distributors, and transmitters lack funds. This is due in part to a flawed
pricing policy: The Pakistani government charges a pittance for energy, and yet
few customers pay their bills. As a result, revenue is scarce, and the sector
literally cannot afford to provide energy.

Pakistan’s energy crisis has troubling implications for its
fragile economy and volatile security situation. In recent years, power
shortages have cost the country up to 4 percent of GDP. Hundreds of factories
(including many in the industrial hub city of Faisalabad alone) have been
forced to close. Some Western companies, citing electricity deficits, have
suspended operations in Pakistan. In January, the Moody’s ratings group warned
that energy shortages will damage Pakistan’s credit worthiness.

Meanwhile, militants are happy to exploit Pakistan’s energy
insecurity. Over the last four years, separatists in the insurgency-riven
province of Balochistan have targeted more than 100 gas lines. Back in April
2013, the Pakistani Taliban blew up the largest power station in
Khyber-Pakhtunkhwa province. Half of Peshawar, the provincial capital with a
population nearly as large as Los Angeles, lost power. And just last week, the
Pakistani Taliban tapped into widespread anger at Karachi’s main electricity
utility, K-Electric, by threatening to attack the facility if it did not
restore power.

Wide expanses of Pakistan’s population are affected by the
energy crisis. Shortages prevent people from working, cooking, and receiving
proper medical care (in some hospitals, services have been curtailed). Not
surprisingly, public opinion polls in Pakistan identify electricity shortages
as one of the country’s top problems.

In sum, the energy crisis threatens Pakistan’s economy and its
precarious security situation, while also deleteriously affecting the lives of
everyday residents across the board. Something needs to be done, and fast.

Sustainable
Solutions, Not Short-Term Fixes

Pakistan’s Interminable Energy Crisis offers nearly 20
recommendations to ease the crisis in a meaningful and lasting way. It calls
above all for a new way of thinking about energy — one that emphasizes more
judicious use of existing resources. This means aggressively reducing T&D
losses; better enforcing laws against energy theft; developing robust
maintenance regimes to ensure that energy infrastructure does not fall into
disrepair; and establishing incentives for consumers to use less energy.
Achieving these objectives would drastically enhance energy security. Our
report estimates that Pakistan’s energy savings potential is about 2,250 MW —
roughly half of its total power shortfall.

We also urge officials to pursue a more affordable energy mix.
This will require less focus on expensive imports and more focus on indigenous
reserves. Pakistan should embrace domestic coal, though within reason;
technological and infrastructural constraints preclude heavy exploitation. It
should pursue indigenous natural gas alternatives such as tight and shale gas;
current reserves are estimated to be quadruple those of conventional natural
gas. Pakistan should take advantage of falling solar and wind power costs to
increase the proportion of renewables in its energy mix. It can make its mix
even greener by adapting other cleaner fuels, such as coal briquettes — which
are cleaner than ordinary coal when burned.

Additionally, we recommend more effective energy market
policies. Pakistan’s government should scale back its involvement in the energy
sector and encourage privatization — but not necessarily full-scale
privatization. While electricity generation companies should be fully
privatized, it may be prudent for distribution companies — which tend to be
larger and employ more people than generation companies — to be restructured
through the use of franchising, which transfers operational responsibilities to
private actors while the government maintains ownership over assets. Pakistan
should also aim to attract a more geographically diverse set of foreign
investors. Its aggressive courtship of Chinese companies has made some energy
investors from other countries fear the lack of a level playing field.

Finally, we call for institutional reform: Pakistan should bring
more coordination and order to a dysfunctional and chaotic energy sector. This
means establishing a new energy ministry with overarching responsibility, and
with full access to top policy levels; streamlining institutional decision-making
processes so that policies no longer need so many approvals (more than 15
government entities are currently involved in energy policy); and integrating
energy subsector plans and policies to support national goals. For Pakistan to
ease its energy crisis, it needs more effective energy policies — but energy
policies can only be as effective as the institutions that shape them.

Costs of Inaction

These are admittedly ambitious proposals, and Pakistan’s
risk-averse politicians may wish to have nothing to do with them. That,
however, would be a big mistake. Because as bad as things are now, Pakistan’s
Interminable Energy Crisis warns, they could soon get much worse.

Pakistan is in the midst of rapid urbanization — a major
societal shift that could worsen the effects of energy problems in the years
ahead. Demand for electricity is particularly high in cities, because urban
industries and homes tend to be more dependent than those in the hinterland on
grid-connected energy sources. With droves of Pakistanis entering cities and
becoming dependent on grids, supply pressures will deepen exponentially.

And with demand for energy rising dramatically in the coming
years, Pakistan could face unprecedented shortages.

Our report concludes that during a period stretching from 2014
into 2015, peak demand was 20,800 MW. This figure is expected to rise to nearly
32,000 MW by 2019. In effect, in just four years, demand could exceed, by
nearly 10,000 MW, Pakistan’s current installed capacity of 23,000 MW. To
address this gap, Pakistan may need to install as much electrical capacity in
the current decade as it did over the last 60 years.

Ultimately, if Pakistan does not move with alacrity to address
its energy woes, the challenges that the crisis presents today will seem tame
compared to what could be in store in the years ahead.

This means, among other things, that when heat waves strike
Pakistan in the future, power outages could be even more lengthy and widespread
than they are today.

And, tragically, many people — perhaps even more than the
staggering 1,200-in-a-week that perished this time around — would likely die as
a result.

Pakistan
is in the grip of a serious energy crisis that is affecting all sectors of the
economy and the various segments of the society. As the situation stands
to-day, there are hardly any immediate solutions to resolve the issue. A change
of attitude and a change of life style is needed at the national level which
should be triggered by the ruling elite and followed by all segments of the
society that have access to electricity. At best there could be some short and
long-term solutions to the crisis but they need immediate planning and
execution with an enormous investment. None of the previous rulers of the
country solved the issue due to which the energy crisis kept on increasing
regularly.

State of energy resources

Pakistan has a deficit of fossils or hydrocarbons sources of
energy and to cover up the deficit, it depends upon importing crude oil at an
enormous cost from its meager forex reserves. The need of crude oil is on an
increase because of an improved life style which has necessitated the use of
vehicles and cars for transportation. Import of oil at around $110 per barrel,
increases the trade deficit and the current account deficit. It makes fiscal
management a difficult task which affects the government as well as the people.

Contrary to the deficit of fossils or hydrocarbon resources,
Pakistan is rich in hydro resources of energy. According to an estimate the
country has enough resources to generate approximately 40000 mw of
hydro-electricity. However, presently it only generates 8000 mw of electricity
against an installed capacity of 11327 mw. In addition the country can generate
electricity with the help of wind and solar energy which has not yet been
exploited to meet the energy deficit. Nuclear energy is yet another source of
energy and at present PAEC produces 472 mw. It is far less than what PAEC
should have been producing to meet the energy deficit.

Three major electricity generation agencies presently operate
in the country. They have a total installed capacity of around 19522 mw. Their
installed capacities are as follows: WAPADA: 11327 mw; KESC: 1756 mw and
Independent Power Producers (IPPs), 5977 mw. PAEC produces 472 mw as stated
earlier. Thermal power accounts for 64 per cent of the total installed
capacity, hydro-electricity accounts for 33 per cent and nuclear power plants
account for 3 per cent. Thermal power is mostly produced by burning either
natural gas or imported oil. The country is yet to switch over to coal from the
indigenous source of energy that is estimated to be the third largest in the
world with a reserve of 33.0 trillion tons.

The Energy market has been changing according to the demands
of power consumption. The Prices of energy raw materials also kept changing.
According to an analysis, in the fiscal year 1990-91 hydro power accounted for
45 per cent of all electricity produced in the country but it was reduced to 26
per cent with a 10-year period. The share of thermally generated electricity
increased from 54 per cent to 71 per cent during the same period. Needs of most
of the commercially used oil are met by imports whose prices have skyrocketed
during past five years and as such the cost of power generation through oil has
increased.

Power consumption because of increasing needs of industry,
agriculture and households has been on the rise. According to an estimate,
between the period of 1990 and 2003 the total consumption increased by 84 per
cent, from 31twh to 57twh. Presently, an annual average increase of 7 per cent
has been postulated. The energy sector, in which the government has a greater
role to play, will have to work hard to make up for the existing deficit and to
meet the growing demand.

The reason behind the crisis

An important question in the midst of ongoing power shortage
crisis, being raised is that why the energy crisis looms on our head after an
interval of around 10-15 years despite the fact that statistics about energy
resources, demand and consumption are well articulated. They are also readily
available to planning commission and other federal and provincial governments.
The answer is simple; poor management, lopsided priorities and lack of
accountability on part of those who stay at the helm of affairs.

In the early 90s, the power crisis had started emerging and
the political government that was mandated to govern the country was faced with
the issue of power crisis. The government had to resolve the crisis by engaging
almost 19 Independent Power Producers (IPP). 19 IPP projects were initiated
with an installed capacity of 3158 mw and investment of $4.0 billion and by
March 2003 the installed capacity was at 2728 mw that has reached to 5977 mw
through expansion. Till 2005, supply of electricity produced through different
power generating units was surplus to demand by around 450 mw but since then
demand has been outstripping supply because there was practically no additional
power generation.

The government did not anticipate that there would be an
increase in demand of electricity and it was its responsibility to arrange the
supply according to the demand. Consequently, during summer, 2007, supply of
electricity ran short of 2500 mw. It is being anticipated that this year the
deficit between supply and demand could be as high as 3000 mw. By the end of
year 2010, the deficit could be as large as 5500 mw. There are no immediate
solutions to generating additional power through any source because a unit
takes at least 2-3years to establish properly. More than 5 years is required to
construct a hydroelectric dam and the investment is enormous. This crisis has
literally paralyzed the construction industry, badly affected agriculture and
made life hell for the citizens. In view of existing ground realities and
constraints to address power crisis by generating electricity within a short
span of a few months, the need to make the best use of existing power generation
by taking conservation measures at individual, community and national level are
essential. These measures if implemented with commitment and honesty of purpose
can help a lot of people to over come negative implications of power crisis.

Energy conservation measures

Energy conservation or efficient use of electricity is what
is needed at this crucial time. There are three major users of electricity and
they need to be educated and motivated to play their role in energy
conservation. The three stakeholders are: industrial sector, transport sector
and domestic/household sector. Each sector needs to be dealt separately to high
light the efficacy of conserving energy.

The Industrial sector is consuming the largest amount of
energy in the country. It consumes around 45 per cent of the total commercial
energy. Most of them are concentrated in a few industrial areas close to or
within large cities such as Karachi, Lahore and other comparatively smaller
cities. Industrial units are not energy efficient and management practices also
need improvement to make efficient use of electricity. A study carried out by
the ENERCON reveals that efficient use of electricity by the industrial sector
could save up to 23 per cent of electricity. The focus on energy conservation
is on the improvement of steam distribution systems, air conditioning,
refrigeration and modernizing and revamping energy efficient combustion
processes and controls.

The transport sector is the second largest consumer of
energy. According to an ENERCON study, this sector consumes 28 per cent of
total national consumption of energy. This could be reduced by 10 per cent if
car owners alone were to economise on consumption of fuel and kept their car
engines fully tuned up. The sector has the potential to be 20 per cent
energy-efficient if railways, shipping and aviation are included. One of the
visible constraints that keeps the industrial and transport sector away from
being energy-efficient is the lack of observing energy conservation rules and
regulations which are already laid down by the government. Their focus is
perhaps on short-term gains that run contrary to national interest.

The third largest consumer of electricity is
domestic/household sector that consumes around 21 per cent of electricity produced
in the country. According to a study this sector could be efficient by 30 per
cent by avoiding wasteful habits of consuming energy such as keeping markets
fully lit etc. A positive development that has so far taken place in this
sector is gradual shifting over to use of energy savers. Similarly energy could
be saved by minimum use of air conditioners. The entire household should be
well-aware of energy consumption.

To achieve meaningful results about conservation of energy
the charity should start from home, that is, the ruling elite should take the
initiative and set example to conserve energy as a national imperative for
emulation by other segments of the society. If conservation measures stated
above were to be implemented partially, it would go a long way in addressing
the energy crisis immediately without any additional cost.

Measures by the government

The outgoing government had belatedly addressed the power
crisis by hyping up the construction of mega hydro-electric dams including
politically controversial Kalabagh dam without going into details about their
feasibility and sources of investment. The new government has a real big
challenge of addressing the energy crisis at hand. Its first priority should be
to implement immediate measures that might bring some relief to the public. It
should also immediately embark upon the programmme of expansion of generating
capacities that has been laid down by the previous government under “Vision
2025” programme.

It envisions increasing existing power generating capacity by
10000 mw by 2010 and around 35000 mw by 2025 at an enormous cost of $35 billion
to be shared by the government and private sector. The share of different
sources of energy is stipulated to be as follows: hydro-electricity: 22563 mw,
new gas fired plants: 4680 mw, coal fired plants: 4350 mw, nuclear plants: 1800
mw and finally 1500 mw from renewable energy resources. It is certainly an
ambitious plan that needs to be implemented on priority basis with changes that
the new government might like to make within its national policy
framework.