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Energy crisis in pakistan real


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Energy crisis in pakistan real

  1. 1. Ms Samia Rehman Dogar A full time faculty member working as Associate Professor in Federal College of Education ,H9,Islamabad . Energy crisis in Pakistan Energy is the most important sources for economic growth of a country. Unfortunately Pakistan has to face a major energy crisis in Natural gas, Power and Oil in next two to three years. This would delay the Economy of Pakistan (which is already in complexity). The high cost of the import of Oil, Construction of Big Dams, uncertain regional security environment attached with lack of national agreement to build dams are likely to delay quick resolution of energy crises. This energy deficit will lead to inflation. Similarly subsidies of billions of rupees have to be doped out “Water and Power Development Authority (WAPDA)” to bear loses. This would affect the national exchequer heavily. An Energy Crisis is threatening large in upcoming years. There is an expected short fall up to 50% because of increase in demand and supply gas up to 3,000 MW. Pakistan’s total energy requirement would increase by 48% to 80 million tons of oil equivalent in 2011. Pakistan energy sector comprises of major sources with share of 50.4% of gas, followed by oil 29%, hydro electricity 11%, and coal 7.6%. Consequently, Pakistan imports energy to overcome the problem and maintain standard of living of people. The major shortfall is expected in natural gas supplies. Pakistan had 28 trillion cubic feet reserves of natural gas in 2006 but due to increase in its demand it is expected to be exhausted in next two decades. Pakistan has a huge demand to generate power through oil but we can meet only 20% of our requirement through original production and rest of oil is imported from Gulf States and other countries of world. No major oil field so far has been discovered in last three decades. Oil demand is expected to double by 2015 and quadruple by 2025. This would lead to a amazing trade shortage, and growing of general prices. Pakistan has a total hydro potential of 40,000 MW against which it generates only 6500 MW. If the dams are not built there would be short fall of 40 million acre feet of water by the year 2006 and 108 million acre feet by 2013. Consequently power shortage will be up to 11,750 MV per year. It will affect agricultural, industry, and particularly the storage capacity of Mangla, Terbela and Chashma Dams will be reduced due to mud deposits. 1
  2. 2. Pakistan has world’s seven largest reserves of coal after discovery of THAR. These reserves are still untouched due to lack of technique in coal mining. Similarly solar and wind energy in coastal areas of Baluchistan and Sindh have a lot of potential to generate electricity but acquisition of technology at an enormous cost makes this a unbelievable source. Pakistan has only two nuclear plants providing two percent of electricity to our country. Population explosion is another cause of energy crises. It should take positive steps to finalize international gas pipe line projects i.e. IPI (India, Pakistan, Iran) Gas pipe line project which meet the needs of gas demands of Pakistan and possibly India. It should make effort to fulfil the project with TURKEMANISTAN and AFGHANISTAN gas pipe line which was floated by TURKEMANISTAN in 1991 to meet the demands of gas for Pakistan. Similarly a Sharjah based company initiated and sponsored a gas import project through an offshore pipe line from QATAR TO PAKISTAN IN 1990 but it is still under consideration. Causes of energy crisis in Pakistan: AGING OF THE EQUIPMENT One very important reason attributed to this energy shortage is the aging of the generating equipment which could not develop the electricity as per the design requirement. This is the responsibility of continuous updating the equipment and keeping the high standard of maintenance. we sincerely think a serious thought should be given for general overhaul and maintenance of existing equipment to keep them in good working order. WASTAGE OF ENERGY So far energy conservation is limited to newspaper ads lip service in seminars. No serious thought is being given to utilize the energy at the optimum level. A new culture need to develop to conserve energy. Some times on government level illiteracy is blamed for the failure of the energy conservation program. this is not true,. Maximum energy is consumed by elite class which have all the resources of knowledge and communication. But for their own luxury they themselves ignore the problem. Government should seriously embark on energy conservation program. HIGH COST OF FUEL 2
  3. 3. The cost of crude has increased from 40 $ to 140 $/barrel. it means the generation from thermal units are costing exorbitant price. WAPDA and KESC when purchasing electricity on higher cost are not eager to keep on selling the electricity on loss. Therefore they do not move on general complain of load shedding.One simple solution is to increase the energy cost. Again the theft of electricity from the consumers adding the misery of common citizen who wants to pay the bills honestly. the problem of the energy losses is being discussed for more than a decade and in spite all efforts no solution has been found. MONOPOLY IN THE BUSINESS Wapda and KESC are two generation and dispatch units in Pakistan. although NEPRA is a government authority to settle the tariff issues but the fact remains that once the question of WAPDA comes the authority has a very little influence. This is suggested that private sector should be allowed to install power plant and settle the electricity to consumers. Once the rates are settled on competitive basis and the service and uninterrupted power supply will be insured then consumers will be benefited. EXPLORING COAL Pakistan is blessed with large amount of the coal. again no serious work is done to explore the coal for power generation. This is complained that the coal quality is inferior. However tailored made solutions are available to burn any type of coal. Government is looking for private sector to play its role. Effects of energy crisis in Pakistan: Education sector:Pakistan’s Education sector is affected badly .students are the worst victims of this energy crisis. Lack of electricity allows less time for rest and study for students. Effect on Business and trading:As the adverse effects of energy crisis have started appearing on the overall business horizons of Pakistan, Punjab seems to be the most severely hit region as compared to Sindh and KPK. Textile industry is on the course of total disaster as production and exports are falling month by month due to persistent gas closure and electricity load shedding in Punjab. In this state of uncertainty and frustration, all fresh investments and new projects in the textile 3
  4. 4. sector have come to a standstill as energy crisis and economic slowdown hurt businesses as well as domestic and export markets. It is pertinent to cite the case of recent International textile exhibition held in Frankfurt, Germany. Around 219 Pakistani companies exhibited their products but the Pakistani exporters were able to get very little business amounting $ 3 millions only as compared to $100 million in the past. The poor performance is being attributed to Pakistani exporter’s inability to meet the last year’s shipment deadlines that lapsed due to delay in production process caused by energy crisis. Suspension of gas supply for a long period of time, rising cost of production, hyper inflation, high mark up rates, institutional corruption, political instability and economic slowdown have caused the closure of industrial units, rendering thousands of workers jobless. In Faisalabad alone, more than 500 textile units and around 26 flagship companies have closed their business after suffering heavy losses. A number of mega industrial groups have shifted their capital outside Pakistan to open industrial units in countries like Bangladesh and Malaysia. The industry in Punjab has remained totally closed for the last 35 days as the gas authorities had forced indefinite shutdown. This lengthy gas cut off had followed irregular load shedding in earlier months which have resulted in decline of textile exports by 159.5 million dollars in October and 193.9 million dollars in November topping at 225 million dollars in During the last December of the shortfall was visible more prominently in sub sectors. Export of cotton cloth went down by 44.8 million square meters which is down by 26.41 per cent, Knitwear 4.59 million dozens short which is 37.65 per cent, Bed wear 8342 metric ton 32.75 per cent, Towels 904 metric ton 7.83 per cent and garments 0.19 million dozens which is 6.75 per cent in December. Textile sector is the backbone of the national economy as it has direct contribution to domestic production and foreign exchange earnings. Gas shortages in conjunction with electricity load shedding created immense problems for the industries and negatively impacted the production process as well and export of value added textiles. Textile industry lost 225 million dollars exports in December and likely to lose another 250 million dollars in January. About 600 million dollar shortfall in three consecutive months is a big setback to the national economy and it is apprehended that if the situation remains constant, this shortfall could touch one billion dollar mark in February. Unprecedented energy shortage was the prime reason behind substantial drop in exports. Situation arising out of gas outage would lead to further decline in exports, huge labor layoffs and decrease in the revenue of the Government. 4
  5. 5. It is predicted that negative growth in the textile exports would adversely affect the country’s economic growth. Industry sources say that Government must set priorities for uninterrupted gas supply to industries to resolve energy shortage issue. Huge gas reserves have been explored and waiting for execution. The Government, therefore, should execute these projects on priority basis to bridge the rising gap between demand and supply of gas. Billions of dollars investment on machinery is becoming redundant owing to long hours load shedding of electricity and no gas supply. Energy supply and economic growth were interlinked and gas suspension had slowed down the pace of industrial growth in the country. Present trade and industrial conditions in Pakistan are the worst in the history of the country and if timely remedial measures are not taken, the situation will get out of control. The IT industry Among many industries, the IT industry is the one affected the most with the coming of the Energy crisis and rightly so. The IT industry is all about providing services and products through the use of electronics, computers and everything that is related to power; which we lack! Our IT industry was among the fastest growing industry in the Asian region. The energy crisis has hit us bad. The whole industry has been forced to struggle and cut their costs down drastically just so they can survive. This has of course had a trickle-down effect on the whole economy and has negatively affected the jobs situation in the country as well. The frightening thing is the fact that people are still now completely aware that this energy crisis has the potential to completely destroy our economy. International Aid cannot be seen as the solution, because it is not. It is only but a temporary bandage on a cancer wound. Remedies for energy crisis: The alternate energy sources:1. 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. 5
  6. 6. 2. 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. 3. 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. 4. 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. 5. 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. 6. 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, 6
  7. 7. 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. ROLE OF GOVERNMENT So far the government is looking for private sector investment in energy sector and for itself it choose a role of facilitator and arbitrator. We strongly suggest that a massive investment from government itself in generating units for conventional as well as new technologies is needed. Once the government sector embarks on massive plans then private sector will follow immediately. ENERGY PLANNING In spite higher costs immediate relief is only possible with thermal power plants which can be commissioned in 24 months time. A comprehensive and realistic planning will help to develop generating units in Pakistan which will be a catalytic element for the economic growth , poverty elevation and prosperity in Pakistan DISTRIBUTION SYSTEM Wapda briefing highlight the poor distribution system as the main cause of tripping and break down of the system. However we consider as the last of our concern. This is true that the distribution system causes many unwanted tripping and break down but now we honestly believe that the shortage of energy generation is our main cause of the problem for last twenty years WAPDA and KESC complaining about the distribution system but fails to bring any improvement CONCLUSION: At present Pakistan is pursuing a multidimensional pro-longed strategy to ensure adequate and uninterrupted oil and gas supply and other energy resources to sustain the present pattern of energy for the rapid national economic growth, relying mostly on natural and renewable sources and . Greater reliance on gas, aggressive pursuit of hydroelectric power generation, and enhancing nuclear power generation capacity are some of the key elements of this strategy. Pakistan is also seeking to expand its primary energy supply base by encouraging oil exploration and power generation companies to undertake energy project in Pakistan. The regional gas pipe line projects in which Pakistan is actively pursuing to meet its expanding domestic energy demands. 7
  8. 8. These are the prerequisite for resolving energy crises that, unless resolved promptly, would cast a long shadow on the short and medium term objectives of economic growth and development. Bibliography 1. Peter, Fairly. (1967). The good energy book, Toronto; Llewellyn publication. 2. Richard, A.J. (1957). Electricity, Its phenomena, laws and results, New York; sage publication. 3. Rodelph, Mark. (1987). Need of Electricity, London; Wilson and son printers. 4. Saeed, Asad. (2002), Electricity shortfall in Pakistan, Faisalabad; dogar publication. 5. Sen, A. (1990). Electric and Magnetic phenomena, London; dover publications. 6. Shabir,Usman .(2004). Recent economic developments, Faisalabad; qureshi publications. 7. Siddiqui,Zia.H. (1998). Electric power distribution, Karachi; majeed publication. 8. Watson, J. (1987). Electricity, its nature and importance, Paris; Tata McGraw hill publication. 9. Zia, Abid.(1993). Introduction of electricity, Hyderabad; summer 8
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