1. Pakistan
Towards a new Energy Policy
ten point agenda
FPCCI Roundtable conference on Energy
16th May 2013,Karachi
By
Akhtar Ali
CEO Proplan Associates Karachi

2. Ten Points
• Institutional issues
• Market, competition and costs
• Consumer Choice &market aggregation
• Reorganize distribution
• Gas Production and imports
• Gas usage and priority issues
• Thar Coal development
• Renewable Energy
• Resolve political issues

3. Institutional issues
• 1) Integrate energy decision making avoiding
the pitfalls and predicaments of similar
initiatives like one-window operations of the
past; ministry consolidation or Chief Energy
Advisor with multi-ministry jurisdiction;
reorganize and transform all major energy
institutions into out-put based organizations

4. Market, competition and costs
• 2) Reduce cost of production and at-least arrest
the rising cost escalation; introduce competition;
make regulation and control an exception and
market and competition a norm; Except for
transmission and distribution, both in Gas and
electricity, introduce auctions and tendering in
place of cost-plus projects; introduce Coal and
Hydro to bring down prices. Keep 10 cents per
kWh ceiling on all new projects, and a ceiling of
10 USD per MBtu on Gas prices, imported or local.

5. Consumer Choice &market
aggregation
• 3) Encourage large consumer choice, self
generation and market aggregation
(wholesale power marketing companies);
Introduce and strengthen wheeling charge
approach in both Electricity and gas sector;
include IPPs and Captive generation in
subsidies as well.

6. Reorganize distribution
• 4)Re- organize distribution companies smaller and
eventually Wires only; similarly, gas T&D as
smaller ‘Pipes-only’ businesses. Divide gas and
electricity distribution into smaller units and
organizations, possibly division based;
Provincialise distribution companies; introduce a
two-Boards system in large companies ala-
Europe; launch an extensive programme for T&D
loss reduction both in gas and electricity;
establish separate organization(s) to undertake
this.

7. Gas Production and imports
• 6) Reform OGDC and Oil and Gas concession
units; launch a major political-cum-
commercial package to boost local exploration
and production of gas; consider upwards
adjustments in whole-sale/producer gas
prices in view of very high imported gas prices
in LNG and Iran Gas; Avoid expensive gas
imports projects; Balance American vs Iranian
interests and get a favorable LNG supply from
the U.S. or better prices of Iran-pipeline gas.

8. Gas usage and priority issues
• 7) Mandate efficient use of scarce gas and expensive when
imported; promote and incentivize cogeneration and even
tri-generation using waste heat heating and cooling and
refrigeration for food processing industry. Discourage CNG;
close the price differential to 75% in terms of Btu prices;
encourage public transport on CNG; immediately ban CNG
use in larger than 800 cc private vehicles; encourage and
introduce Bio-CNG; put other gas wasters to notice such as
captive generators who are illegally running single cycle
facilities violating their terms of license; Gas allocation
priority to be homes, then power and then industry(Boiler
use);Fertilizers to be converted to coal in 5 years and CNG
at the last priority to be eventually phased out, unless Bio-
CNG is adopted by the pumps.

9. Thar Coal development
• 8) Fast Track Thar Coal and launch a
transaction for 5000 MW of Thar Coal
immediately; Fast track conversion of GENCOs
to Coal, local or foreign or both; convert Diesel
Engine IPPs to Biogas where feasible; give
notice to Fertilizer plants to convert to Coal
(Thar); organize Coal Gasification project in a
more structured way, inviting foreign
companies which can utilize the data already
generated

10. Renewable Energy
• 9) Promote competitive Renewable energy that can be
afforded and improve supplies; Launch 300-500 MW Wind
Power Auctions every six months and try to halve the Wind
Tariff from 16 cents to 8 cents or less; encourage local
content; Launch solar power schemes for diesel replacing
applications e.g. Tube-wells; Organize a IPP for this
purpose; organize auction for Solar PV for tube-wells with a
reserve ceiling at 15-16 cents; promote solar water heating
and cooling; negotiate green credits for renewable energy
from multilateral and bilateral sources mortgaging CDM
incomes; prepare national CDM projects scheme;
encourage Bioenergy such as Biogas, Bio-CNG and energy
from solid and liquid waste;

11. Resolve political issues
• 10) Resolve political issues pertaining to
energy sector; a) Hydro and Coal royalties; b)
provincial role in energy sector; possibly
provincialising distribution; energy quotas,
priorities and allocations; subsidy allocations;
apportionment of sovereign guarantees for
energy projects implemented by provinces.

12. About the author
Akhtar Ali is an engineer (B.E, M.S.) energy consultant, advises public and private sector clients on energy policy,
investments and tariff issues and has authored a number of books on the subject. He has been a visiting
Professor of Energy at IoBM and teaches energy management to MBA students. He has held senior
management appointments in Pakistan’s public and private sector. His last appointment in public sector
was as Chief Executive, Karachi Pipe Mills, a unit of State Engineering Corporation. He was Research Fellow
Energy at Harvard University’s Kennedy School of Government. His professional career spread over more
than over three decades includes management consultancy& training and company management. He is an
author of eight books on various subjects such as energy, governance, political economy and resources. He
heads Proplan Associates, a consulting company having a current focus on Energy. He is also Chairman
(REAP) Research on Economy and Politics of Pakistan, a think tank that brings out research publications on
national issues.Books by Akhtar Ali:
• The Political Economy of Pakistan: an Agenda for Reforms. (1994).
• Pakistan’s Development Challenges :Federalism, Security and Governance 2010
• Pakistan’s development; economy, resources and technology,2012.
• Pakistan Nuclear Dilemma: Energy & Security Dimensions. (1984).
• Pakistan Energy Development: the Road Ahead.(2010).
• Pakistan Issues in Energy Policy, 2012.
• Nuclear Politics and Challenges of Governance. (1998)
• South Asia: Nuclear Stalemate or Conflagration. (1987).
• Proplan Associates, Karachi, Pakistan:tel,0213-5845359, Mob;0345-2447714;akhtarali1949@gmail.com