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Energy crisis in pakistan (1)

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Energy crisis in Pakistan.

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Energy crisis in pakistan (1)

  1. 1. ENERGY CRISIS IN PAKISTAN A CRITICAL ANALYSIS BY : NOMAN AHMED
  2. 2. ENERGY : • Life on earth is driven by energy, it is a fundamental requirement and energy is crucial to provide for adequate living such as food, water, health care, education, shelter and employment • Electricity is the most convenient form of energy available to human beings. This energy is fundamental to human well being and prosperity, it is indeed a matter of life and death • Without sufficient energy the wheel can't run on roads, industry and agriculture can't sustain, hospitals and operation theaters can't function, schools and laboratories can't work and public and private sector businesses can't operate
  3. 3. WHAT IS ENERGY CRISIS: Energy crisis is any great shortfall in the supply of energy to an economy. It is usually to the shortage of oil, electricity or other natural resources.
  4. 4. ENERGY SECTOR IN PAKISTAN • At present energy is generated by only three modes 1. Thermal 65% 2. Hydel 33% 3. Nuclear 2 • Two companies that produces electricity in Pakistan 1. WAPDA 2. KESC
  5. 5. SUPPLY AND DEMAND • The total power production capacity in country is 19,500MW • Country is falling short of 4500MW • The demand of electricity is growing at the annual rate of 9%,while supply of electricity is increasing at comparatively slower rate of 7% • According to a survey 1. Household sector 44.2% 2. Industries 31.1% 3. Agriculture 14.3% 4. Government sector 7.4% 5. Commercial 5.5% 6. Street lights 0.7%
  6. 6. PAKISTAN INDIGENOUS NATURAL RESERVES: • Conventional gas 30TCF, tight gas 40TCF, coal 185 billion tones, oil 436bbls • Energy consumption mix(%): gas 43.2, oil 29, electricity 16.2, coal 10.4 • Energy supply by source: gas 48.3%, oil 32.1%, hydro electricity 10.6%, coal 7.6%, nuclear 0.6%
  7. 7. CONTI… •Oil consumption: power 40%, industry 9.50%, agriculture 0.60%, transport 47.40%, total 16.85 million TOE •Gas consumption: power 35.5%, transport 4.6%, industry 25%, commercial 2.6%, total 29.32 million TOE
  8. 8. Petrol prices:
  9. 9. Consumption and production of gas:
  10. 10. ELECTRICITY GENERATION(%): • In Pakistan Hydel 33.6, gas 27.3, oil 35.1, coal 0.1, nuclear 2 • Pakistan has a small nuclear power program, with 425 MW capacity, but there are plans to increase this capacity substantially • Power generation through wind is in initial stages in Pakistan and currently 06 MW has been installed in first phase in Jhampir through a Turkish company and 50 MW will be installed shortly.
  11. 11. POWER SECTOR: • Prior to 1998, there were two vertically integrated utilities, i.E, KESC, which served the karachi area and WAPDA which served the rest of the country. • The power sector was restructured in 1998 with the creation of pepco (pakistan electric power company), wapda is responsible for water and hydropower development whereas pepco is vested with the responsibility of thermal power generation, transmission, distribution and billing • Later on, wapda’s power wing has been structured into distinct corporate entities comprising of 4 gencos,10 discos and one trans-co (NTDC) • National electric power regulatory authority, NEPRA, is another important player. It regulates the power sector, determines the tariffs and efficiencies, technologies and performance standards • Gencos • Water and power development authority (WAPDA)
  12. 12. CONTI… • Karachi electric supply company (KESC) • Independent power producers (IPPS) • Pakistan atomic energy commission (PAEC). • There are around 25 independent power producers that contribute significantly in electricity generation in Pakistan (IPPS’ total installed capacity:6,365mw). In the total installed capacity, the share of public sector is around 70%, and the private sector is 30% (now it is about 40%) • Capacity 22797 MV, average dependable capacity in summer 15000 MW, at peak period the supply demand gap even reached 8000MV( energy demand-supply gap is projected about 57% in 2030)
  13. 13. LOADSHEDDING : • Consequently, load-shedding is a common phenomenon through power shutdown • Nearly 53 percent of the Pakistan's population remains without electricity far more than 8 hours daily through out the year • Due to this crisis the daily life has come to a standstill. Even more ominously the shortage is endangering the future economic and social prospects of the country, putting its very fabric under strain.
  14. 14. Energy sources: Hydel energy: • Pakistan is endowed with a hydel potential of approximately 41722 MW, most of which lies in the KPK, northern areas, Azad Jammu and Kashmir and Punjab. Wind energy: • The wind map of Pakistan has been developed after extensive analysis carried out by national renewable energy laboratory (NREL), us, with USAID, PMD and alternative energy development board (AEDB). The total potential of wind power in the country has been estimated very high, only Gharo-keti Bunder wind corridor potential is estimated to be 50000MV Solar Enrgy: • Pakistan receives 16-21 MJ/m2 per day of solar radiation as an annual mean value, with 19 MJ/m2 per day over most areas of the country • The annual mean values of sunshine duration lie between 8 and 10 hours per day all over the country, except for the northern parts.
  15. 15. Comparison of energy: • Among all renewable energy sources, the solar energy is the most abundant and widely spread in the country, Pakistan has potential of more than 100,000 mw from solar energy Thar coal: • In 1992, the geological survey of Pakistan (GSP) discovered more than 185 billion tons of lignite reserves in Thar coalfield
  16. 16. CONTI… • Pakistan is blessed with abundantly available and inexhaustible renewable energy (RE) resources, which if tapped effectively can play a considerable role in contributing towards energy security and energy independence of the country.
  17. 17. CONT: • Irrational product mix (about 67% of electricity generation is from thermal sources which is very expensive). In case of thermal power choice of fuel and technology has a large impact on the cost of power generation—diesel power being the most expensive, followed by furnace oil; and coal being the cheapest. Pakistan is producing its thermal power mainly from furnace oil.
  18. 18. CONTI… • Rapid demand growth (at about 6 to 8 percent per annum) .It has been projected that the primary commercial energy demand would increases at 4.3, 7.3 and 10.4% per annum average growth rates and would reach at 150, 320 and 670 MTOE by the year 2030 under LEG (low economic growth), BAU (business as usual), and HEG (high economic growth) scenarios respectively. • The actual production is well below the installed capacity, the transmission infrastructure in Pakistan is old and creaking. It further suffers from relative lack of investment into its maintenance and development, system losses in the power sector of Pakistan at 19 percent • Why? • Till late 1970s, the share of hydel power in the fuel mix was about 70 percent and thermal power was about 30 per cent • In Pakistan, the government has monopolized the generation, transmission and distribution of electricity, the monopoly does not have to worry about the competition, it has no one to answer to, it works with complete impunity • Tanenbaum et al. (1992) argue that "when the state owns, nobody owns; and when nobody owns, nobody cares". This then is the situation in Pakistan
  19. 19. GOVT FAILURE: • WAPDA and ministry for power badly failed to project the population growth, looking at the environment, analyzing the international energy markets, studying the developments in the energy sector • Poor quality of governance lead to corruption and line losses, non recoveries • Weak regulator • The technologies to exploit renewable resources are not much promising in its current state. • No attempt has ever been made to formulate a comprehensive and integrated energy policy for the country. • The absence of a single energy institution and lack of coordination and synergy between various institutions dealing with different sub-sectors of energy is an important issue that has never been addressed. • Introduction of independent power producers (IPPS)
  20. 20. CONTI… • The answer for this failure is that executive jobs in these institutions are distributed at the whim of powerful, without any regard to the merit and on the basis of nepotism and favoritism • In such a case why should WAPDA or any one at the MINISTRY care. And if someone does who is going to listen to them • Lack of vision, lack of political will, chronic one man rule (even in the civilian set ups or so called democratic setups) • Absence of rule of law with no individual liberty, protection of property rights and no peace and security • In most countries production is in public hands while transmission and distribution is in private hand but in Pakistan the case is inverse
  21. 21. CONTI… • Due to all these Pakistan electric power sector is characterized by chronic problems of low productivity, higher system losses • Despite nearly 8% annual increase in the demand of electricity, no power plant or power generation unit has been installed for last many years in Pakistan
  22. 22. ENERGY FROM COAL: • Compared to china (78% of energy from coal), USA ( 60 % ) and India ( 53 % ) Pakistan produces 10 % of energy from coal. Why?
  23. 23. COAL MINING AND ASSOCIATED DISASTERS • Pakistan is blessed with huge deposits but so far we do not have the requisite expertise to remove the overburden and extract the coal. Thereby, owing to non-availability of modern equipment to extract deep seated coal, our workers always remain susceptible to life dangers.
  24. 24. CONT: • The government considers Thar coal development as a flagship project. Thar coal projects have been enlisted as early harvest projects by the CPEC (china- Pakistan economic corridor), Sindh engro coal mining company (SECMS) and Sino Sindh resources (pvt.) Limited (SSRL) have been prioritized as top priority projects to be financed by Chinese institutions. There is a complete synergy between the federal and the provincial government of Sindh. Total power generation anticipated from these three projects is 2400 MW in 2018.
  25. 25. THAR COAL RESOURCES In the Thar area, Pakistan has the 7th largest coal reserve in the world and yet Pakistan only produces 0.2% of its electricity from coal. If all the oil reserves of Saudia Arabia & Iran Put together, these are approximately 375 Billion Barrels, but A Single Thar Coal Reserve of Sind is about 850 Trillion Cubic Feet, which is More Than Oil Reserves of Saudia & Iran.
  26. 26. EFFECTS OF ENERGY CRISIS IN PAKISTAN.. EFFECT ON INDUSTRY EFFECT ON FOREIGN INVESTMENT UNEMPLOYMENT EFFECT ON AGRICULTURE
  27. 27. INDUSTRIAL PROBLEMS DUE TO POWER CRISIS • The prevailing energy crisis in Pakistan is taking away 2 percent (or rs400 billion) of the economy, despite the government has spent rs1.1 trillion as subsidies on the sector in the last four-year which accounts for 2.5 percent of the total volume of economy. • Industrial sector represents as one of the most grievous victims of the crisis because it is most energy intensive sector • The crisis has increased the industrial cost of production, lead to delay in orders, output losses from 12 to 37 percent with in Punjab, employment has not been reduced significantly due to alternative energy arrangements by firms (Rihanna Siddiqui et al.) • Units being shut down or run at low capacity, layoffs taking place, and overall loss of competitiveness of the country, all of which is also hurting the economy and comparative advantage
  28. 28. LOW FOREIGN INVESTMENT: • Another consequence for this sector is flight of capital; not only foreign but local investors are investing, for instance, in Bangladesh, moving textile units there. • If this crisis is not solved immediately, the industrial growth may be reversed completely, allowing foreigners to decimate local industry and innovation forever • The industrial sector, like all others in the country, is not aware of the financial losses being incurred as a result of inefficient practices which lead to waste of energy, even the most modern of the industries in Pakistan do not have an internal energy auditing and monitoring policy in place which is a key to energy conservation and management. • Reduce energy consumption through applying energy conservation and management measures
  29. 29. EFFECT ON AGRICULTURE: Load shedding is destroying the agriculture sector because there are 200,000 electric tube wells in the country to irrigate the land, which could not be run due to electricity shortage decrease in agriculture production and food shortage in the country
  30. 30. UNEMPLOYMENT: According to the labor department sources, approximately 800,000 laborers have been dispelled from their jobs. While, 400,000 to 800,000 laborers were receiving less wage.
  31. 31. WHAT SHOULD WE DO TO OVERCOME THIS??????
  32. 32. SOLUTION: • A well planned policy shift should be made to correct the energy-mix by shifting our focus from oil-based thermal power to hydel and nuclear power (possible in long term only). Focus should be on run of the river projects. Expedite work on non-controversial hydel projects such as diamer bahsa(gilgit), dasu*punjab and bunji(Sindh) dams etc • Provincial governments should generate energy and start building power plants on their own (article 157(2) of constitution allow it)
  33. 33. SOLUTION: A GOOD PLANNING … 1.SHORT TERM PLAN 2.MEDIUM TERM PLAN 3.LONG TERM PLAN
  34. 34. SHORT TERM PLAN INCREASE IPPS(INDEPENDENT POWER PRODUCER) REACTIVATE CLOSED POWER STATIONS RENEW POWER DISTRIBUTION SYSTEM IMPORT ELECTRICITY TILL CRISIS
  35. 35. MID-TERM PLAN: UTILIZATION RENEWABLE ENERGY RESOURCES INSTALLATION OF SOLAR,WIND, BIOGAS AND WIND PROJECTS IN ELLIGIBLE AREAS
  36. 36. LONG-TERM PLAN: Developing and installing coal based powerhouses Initiate energy agreements with friendly countries exploration of more oil,gas and coal fields upgradation in training courses for engineers
  37. 37. CONT.: • In order to meet the massive demand of energy, Pakistan has four external options: the Iran-Pakistan (IP) gas pipeline, Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, Pak-Qatar gas pipeline project and import of Liquefied natural gas (LNG). These are long term options again • The formation of a single ministry in charge of the entire energy sector, the formulation of a long-term integrated policy • In the long run private sector should be encourage to play role in transmission and distributions with strong and independent regular to safeguard the interest of the poor people and society
  38. 38. CONT.: • Pakistan top ten cities create 50,000 tons of waste which is enough to produce 6,000MV of electricity. The government should support these cities to initiate Biomass projects
  39. 39. CONTI… • Conservation of energy is a huge source of adding to the energy supply. Both volunteer, legal and financial measures may be adopted. • Public-private partnership in hydropower sector should be reinvigorated. This will help in raising financial resources for these projects • Political consensus on the big hydro projects should be developed
  40. 40. CONTI… • The government may import electricity from the neighboring countries as a temporary measure to minimize the adverse impact of high cost energy mix. Around 1500MW or even higher could be available from India & Iran and has the potential of reducing the 4000-7000MW shortfall by 30-50%. • The government may convert the idle capacity in the thermal sector into coal-based plants to bring down national average cost. In the short-term, it is important to set up coal-fired power plants based on imported coal, and in the medium-to-long-term, this must be substituted with locally extracted coal.
  41. 41. CONCLUSION . the energy issue is still top priority of the government. the government is intended to fulfill its commitments realizing the fact that good governance and regulation will contribute to a sustainable, affordable and reliable energy system. the government is sincerely committed to add electricity generation of 10,400 megawatts to Pakistan's national grid by 2017-18 along with reduction in the cost of generation and transmission losses.
  42. 42. CONCLUSION • under the plan vision 2025, the government is committed in power generation to 45,000 mw with provision of uninterrupted, affordable and clean ‘energy for all’. thus the government is encouraging private investment to achieve power generation mix through development of indigenous energy resources particularly hydel, coal, etc. to achieve zero load-shedding along with the reduction in average electricity rates.
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Energy crisis in Pakistan.

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