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  1. 1. Sanjay KaulThe India-Pakistan Energy MutualInterdependence: a win-winstrategy1. Introduction2. The Energy predicament of Pakistan3. Areas of India-Pakistan Energy Collaborationa. Powerb. Renewablesi. Solarii. Windc. Coald. Oil & Gase. Pipelinesf. Low carbon Technologiesg. Energy Conservationh. Geopolitics4. Conclusion5. ReferencesCentre ofPolicyInitiatives &Energy StudiesChairman:TNR RaoDy. Chairman:BD GuptaExecutive Council:Sanjay KaulDr. SJ ChopraDr. P DiwanProf. GC TewariStrategic Analyst:Mukul Saini
  2. 2. 2For any feedback please write to us at president@upes.ac.in©Centre of Policy Initiatives & Energy Research (CPIES)IntroductionSince the Indus valley civilization, 5000 years ago, when people worked together tobuild modern amenities like brick cities, road side drainage and multistoried houses topresent day India & Pakistan, where citizens are struggling for contemporary basicamenities like Power, Gas & Water, history has seen a complete reversal of the times.The successful completion of a democratic election process in Pakistan and arrival ofpro-reform veteran Nawaz Sharif presents an opportunity for the electedrepresentatives of the two countries to actively collaborate on ‘energy’, the mostimportant aspect of civilization and the guarantor of other fundamental rights offreedom & equality.The two neighbors have much to offer to each other. This paper presents a quickoverview of energy like Oil & Gas, Power and Renewables vis-à-vis Policy/planning,regulatory affairs, training, technology, commodity market & trading for which India-Pakistan can immediately work together.The Energy predicament of PakistanOil, Natural gas and Coal contribute equally to Pakistan’s energy mix. Like India,Pakistan has limited reserves of the first two but has sixth largest reserves of coal (notfully exploited). It is predicted that latters’ indigenous O&G reserves will be exhaustedby 2030. Gas production has already started to come down. It was to 39.2 billion cubicmetres (bcm) in 2011 from 39.6 bcm in 2010.In Jun 2012, power shortfall reached a peak of 8,500 megawatts (MW) which was morethan 40per cent of national demand. The sector also suffers from gross inefficiencies(including 30per cent transmission and distribution losses). The gap between revenueand expenses has approached a whopping $ 4.5 billion. Consequently, the countrycannot afford to provide a regular supply of power.‘Energy’ is a common subject in the purview of multiple ministries and agencies both atstate and national level. Absence of coordination and clear authority cascades theproblem.Energy shortages have cost the country up to 4per cent of GDP over the past few years.An estimated 400,000 jobs have been lost due to industrial load shedding. This isdeemed to worsen in future as Urban population would cross the 50 per cent mark inmid 2020s.
  3. 3. 3For any feedback please write to us at president@upes.ac.in©Centre of Policy Initiatives & Energy Research (CPIES)Areas of the India-Pakistan energycollaborationWhile imperfect, the 1960 Indus Water Treaty, between India and Pakistan, is anexample of the potential for consummating difficult but mutually beneficial agreements.There are other avenues in Energy where the two nations can jointly work.PowerReducing power losses and framing policy & regulations is required. Pakistan isdependent on imports for heavy power equipment and India is one of the leaders inmanufacturing them, including super critical technology based boilers and turbines upto 800MW.India can also help in carrying out the Renovation and modernization of theirthermal, gas and hydro power plants as it costs less than almost 1/5thof the capital costof a new Power Plant. India can also help Pakistan for the establishment of a nationalload control center and other transmission facilities including supply of 765KVequipment for sub-station and transmission lines.The new plants take a long time to come up, but a quick solution could be to interlinkthe power systems of the 2 countries by laying a 400KV line between Amritsar andLahore, a distance of about 50km and at a cost of about 50 crores (approx.). Such aproject was conceived couple of years ago but could not get implemented. Pakistan isknown to have large gas reserves & the installation of a gas based Power Plant inPakistan can even help India to get peaking power, if the power systems of the twocountries could be interconnected.RenewablesSolarPakistan is blessed with huge power potential of more than 5-6 kwh per sq m per day ofradiation in Baluschistan followed by Eastern Sindh and South Punjab and can havetechnically viable and financially feasible solar power projects. Close to 400 MW ofpower load can be taken off the grid by using this.India has the vast experience in PV system for lighting, water pumping and healthsystem. An indigenous industry for the manufacturing of PV cells is well established inIndia and PV modules can be purchased at very reasonable price compared to theinternational market. India will be ready for the transfer of technology of PV modules asdifferent African countries have benefited from it already. India can also providetrainings for rural electrification using PV technology and can share its experience in thisregard.WindA potential area for a joint venture is wind power plants in Punjab (Pakistan). India hasthe fifth largest installed wind power capacity in the world and the associated learning
  4. 4. 4For any feedback please write to us at president@upes.ac.in©Centre of Policy Initiatives & Energy Research (CPIES)curve with it. Similar ambient and wind conditions both inRajasthan in India and Thar in Pakistan allow the usage of similar turbine type. Hence,Pakistan will greatly benefit from joint ventures in wind power.CoalThere is Non-utilization of vast indigenous resources of Punjab (Pakistan) which is theworld’s single largest continuous Coal field extending over an area of 10,000 Sq KMs.Phased development can lead to 400 – 600 mt /year coal mining in 20 years. All ofPakistan’s energy requirements can be met in 2020 – 2030 scenario. India can not onlyextend its learning curve in coal extraction but its western states’ thermal power plantscan become customer to Pakistan coal.Oil & GasA meeting of the Experts’ Group on Trade in Petroleum and Petrochemical Products,between India and Pakistan, held on 17-18 July 2012, in New Delhi, explored options inthe hydrocarbon value chain. Pakistan identified three fuels that it wants to import fromIndia initially: furnace oil, diesel and natural gas. As mentioned above, due to its severeelectricity shortage, Pakistan wanted to begin imports of these fuels from Indiaimmediately. It wants to import diesel only after 2014, when its term contract withKuwait Petroleum Corporation expires.Given the severe gas crisis in Pakistan, Islamabad also proposed imports of natural gasfrom India. The Pakistani proposal was for supply through a pipeline from Jalandhar, atmarket rates exclusive of transportation and other charges. For Indian gas marketingfirms, the deal is lucrative as they have idle pipeline capacity.Earlier, the Gas Authority of India had also offered Pakistan a deal to import natural gasfrom India in a plan to extend the natural gas pipeline running from the West Coast toBhatinda, through the Dahej-Vijaipur-Dadri-Bawana-Nangal-Bhatinda pipeline to Punjaband into Pakistan. This needs a nod from Ministry of External Affairs before a proposal ismade from Pakistan.Refineries close to border (Bathinda refinery: HPCL- HMEL and Indian Oil Corporation(IOC) respectively) offered to examine the feasibility of constructing two petroleumproduct pipelines; one between HMEL’s Bathinda refinery and Lahore, and the otherfrom IOC’s Jalandhar tap-off point to Lahore. The final decision in each case would besubject to commercial viability and other considerations. Others are Barmerpetrochemicals and RIL Jamnagar refinery.TAPI and IPI pipelines can connect the energy dense Caspian Sea region and Iran toenergy guzzling South Asia. Pakistan & India should swiftly work towards making them areality.
  5. 5. 5For any feedback please write to us at president@upes.ac.in©Centre of Policy Initiatives & Energy Research (CPIES)Low carbon technologiesGiven the inevitable dependence on coal of the economies of the region, jointcooperation between India, Pakistan, Bangladesh, and the United States on carboncapture and sequestration projects could be an important step in regional technicaldevelopment and could address a long term environmental concern.Energy conservationEnergy intensity in India has declined by 20-25 per cent over the last decade withinitiatives like Smart Cities by Ministry of Urban Development, GOI would certainly go along way in this direction. Plans are on the paper to convert at least 70 cities into smartcities with million plus population in India. They would entail several features likecarbon neutral status and intelligent transport. Growing urbanization in Pakistan callsfor similar action where it can work with India.GeopoliticsThe geopolitical dependencies that Pakistan has with China, Iran, Afghanistan, US,Middle East and the internal pressures of Extremism, Army supremacy, call for a veryfine and difficult balancing act, bordering on the impossible. Nawaz Sharif’s would haveto utilize all his past experience of being in power and in the opposition for finding acommon ground to begin with.ConclusionDespite immense scope for intra-inter regional energy projects there has always beeninhibitions and obstacles to cooperation. The continuous failure to utilize theseopportunities by policy makers is not only tragic and represents renunciation byleadership. Number of projects involving cross border trade in coal, hydro-electricpower, petroleum products, thermal energy, renewable energy, bilateral and regionalelectric grid interconnection has the potential to be economically viable. The proposal ofthree regional natural gas pipelines would be definitely beneficial for all. This in shortterm would provide greater access to energy for people on both sides of the border anda deeper sense of energy security for the two countries and would bind the two nationsby a common energy aorta.
  6. 6. 6For any feedback please write to us at president@upes.ac.in©Centre of Policy Initiatives & Energy Research (CPIES)Referenceshttp://www.brookings.edu/~/media/press/books/2012/energyandsecurityinsouthasia/energyandsecurityinsouthasia_chapter.pdfhttp://blogs.worldbank.org/endpovertyinsouthasia/india-pakistan-trade-making-borders-irrelevanthttp://www.nust.edu.pk/INSTITUTIONS/Centers/CES/Downloadper cent20Section/Green-Pakistan.pdfhttp://online.wsj.com/article/SB10001424052970203806504577182301242396574.htmlhttp://www.thenews.com.pk/Todays-News-3-172328-Pak-India-investment-regime-demandedhttp://www.nbr.org/research/activity.aspx?id=323#.UY9y7bVHLzwhttp://www.slideshare.net/Ultraspectra00/energy-sector-pakistanhttp://www.indiapakistantrade.org/events/14_15_2013/Sessionpercent204/Mahendra_Lama.pdfhttp://propertyobserver.in/2013/01/30/then-smartphones-now-smart-cities/#=smartpercent20citiesper cent20technologiesper cent20per cent20india