Nergy Risis in Akistan: E D N H

Energy Crisis in Pakistan 1
E NERGY C RISIS IN P AKISTAN
E DITOR
D R N OOR UL H AQ
A SSISTANT E DITOR
K HALID H USSAIN
2 IPRI Factfile
C ONTENTS
Preface v
1. Pakistan: Power Crisis Feared by 2007 1
2. Major Energy Crisis Feared 3
3. Pakistan’s Quest for Energy Security 4
4. Waste to Energy is Needed in Pakistan 7
5. Type of Energy 10
6. Thermal Energy 10
7. Hydel Energy 12
8. Wind Energy 13
9. Rising Oil Prices 15
10. Pakistan Coal Reserves be Explored 17
11. Pakistan Iran Agree on Gas Pipeline Project 17
12. ECNEC Approves Energy Projects 18
13. Energy Crisis in Pakistan-I 18
14. Energy Crisis in Pakistan-II 21
15. Pakistan's Energy Crisis to Worsen in Next Two Year 22
16. Wind Power: Solution to Energy Crisis 23
17. Energy Crisis may go from Bad to Worse 26
18. Asian Development Bank Considering Loan for Small Hydro Projects 27
19. US Advise Pakistan to Purchase Electricity from Central Asia 27
20. Energy Strategy 28
21. Pakistan Urged to Import 4,000MW from CARs 30
22. Fuel Shortage may Worsen Power Situation 32
23. Energy Crisis: Serious and Worsening 33
24. Energy Crisis in Pakistan is Growing Rapidly 35
25. Efficient Household Appliances to Mitigate Energy Crisis 38
26. Coping with the Energy Crisis 40
27. Iranian, Pakistani Presidents Resolve Pipeline Issues 43
28. Ties with Iran 44
29. Power Crisis & Alternate Energy Technology 45
30. Government Calls IPPs Meeting to Tackle Power Crisis 47
31. Competing Firms Complete Feasibility Reports 48
32. Government to Invite Businessmen to Discuss Power Crisis 50
33. Entangled in Energy Web 51

34. Meeting Held to Discuss Pakistan's Energy Crisis 54
35. Government Taking Steps to Overcome Energy Crisis 55
36. Energy Conservation Plan to Combat Shortage 56
37. Demand-Supply Gap Increases Dramatically 57
38. Pakistan Facing Acute Power Shortage 58
39. Renewable Resources Must to Counter Energy Crisis 59
40. Load Shedding: Part of Conspiracy 60
41. Coal Power Plants to Help Overcome Energy Crisis 62
42 Government to Ensure Indiscriminate Load Shedding: PM 63
43. Pakistan Puts Clocks Forward, Hopes to Save Electricity 64
44. The Option for Solar Power 65
45. Advancing of Clocks Creates Confusion 68
46. Iran can Help Pakistan in Energy Sector 70
47. SAARC Members Asked to Sign Energy Treaty 70
48. Subsidy on Use of Up to 200 Power Units Stays 72
49. Load Shedding becomes a Nightmare for Karachiites 72
50. Severe Fuel Crisis Hits Frontier 74
51. Shortage of Fuel at Petrol Pumps Causing Concern 75
52. Shortage of Petrol Products Tormenting Consumers 75
53. No End to Electricity Meter Shortage 76
54. Peshawar Transporters Threaten to Besiege Oil Depots 77
55. Diesel Shortage Affecting Operation of Tube-wells, Tractors 78
56. Load Shedding Increases as KANUPP Trips Again 79
57. Fuel Stations Run Short of Diesel 80
58. Frequent Power Shutdowns Bringing Grades Down 81
59. New Energy Order 83
60. Power Plants Top Gas Supply Priority List 85
61. Resolving Power Crisis a Priority 86
62. Authority Set Up for Thar Coal Mining 86
4 IPRI Factfile
P REFACE
Pakistan is presently facing a serious energy crisis. Despite strong economic

growth during the past decade and consequent rising demand for energy, no
worthwhile steps have been taken to install new capacity for generation of the
required energy sources. Now, the demand exceeds supply and hence “load-
shedding” is a common phenomenon through frequent power shutdowns.
Pakistan needs about 14000-15000MW electricity per day, and the demand is
likely to rise to approximately 20,000 MW per day by 2010. Presently, it can
produce about 11, 500 MW per day and thus there is a shortfall of about 3000-
4000MW per day. This shortage is badly affecting industry, commerce and
daily life of people.
All possible measures need to be adopted, i.e., to conserve energy at

all levels, and use all available sources to enhance production of energy. It
seems that the government is considering importing energy from Iran and
Central Asian Republics and using indigenous sources, such as, hydel, coal,
waste, wind, and solar power, as well as other alternate and renewable energy
sources, besides nuclear power plants for production of energy. Needless to
say that if the country wishes to continue its economic development and
improve the quality of life of its people, it has to make serious efforts towards
framing a coherent energy policy.
The Factfile includes selected articles and news items on the subject
appearing in the media from 2nd July 2004 till 10th July 2008.
July 10, 2008. Noor ul Haq

P AKISTAN : P OWER C RISIS F EARED BY 2007

The country may plunge into energy crisis by the year 2007 due to rising
electricity demand which enters into double digit figure following increasing
sale of electrical and electronic appliances on lease finance, it is reliably learnt
Thursday.
“The country may face energy crisis by the year 2007 following
healthy growth of 13 per cent in electricity demand during the last quarter,
which will erode surplus production in absence of commissioning of any new
power generation project during this financial year,” informed sources told
The Nation.
As per Pakistan Economic Survey 2003-04, electricity consumption
has increased by 8.6 per cent during first three-quarter of last fiscal year.
However, a top level WAPDA official maintained that electricity demand
surged up to 13 per cent during last quarter.
The survey said household sector has been the largest consumer of
electricity accounting for 44.2 per cent of total electricity consumption
followed by industries 31.1 per cent, agriculture 14.3 per cent, other
government sector 7.4 per cent, commercial 5.5 per cent and street light 0.7
per cent.
Keeping in view the past trend and the future development,
WAPDA has also revised its load forecast to eight per cent per annum as
against previous estimates of five per cent on average. Even the revised load
forecast has also failed all assessments due to which Authority has left no
other option but to start load management this year, which may convert into
scheduled load shedding over a period of two year, sources maintained.
The country needs a quantum jump in electricity generation in
medium-term scenario to revert the possibilities of load shedding in future
due to shrinking gap between demand and supply of electricity at peak hours.
According to an official report, the gap between firm supply and
peak hours demand has already been shrunk to three digit (440 MW) during
this fiscal and will slip into negative columns next year (-441 MW) and
further intensify to (-1,457 MW) during the financial year 2006-07.
The report maintained that the difference between firm supply and
peak demand is estimated at 5,529 MW by the year 2009-10 when firm
electricity supply will stand at 15,055 MW against peak demand of 20,584
MW.
Chairman WAPDA Tariq Hamid at a Press conference early this
year warned about the possible energy crisis and stressed the need for
‘quantum jump’ in power generation. The experts say it could only be
possible through a mega project of hydropower generation; otherwise the
gap between firm supply and peak demand will remain on the rise.
2 IPRI Factfile
They said the power generation projects, which are due to

commission in coming years are of low capacity and will not be able to
exceed the surging demand of the electricity.
They say no power generation project will commission during this
fiscal year and the total installed capacity of electricity generation will remain
19,478 MW to meet 15,082 MW firm supply and 14,642 MW peak demand.
Giving details of projects, the sources said Malakand-lll (81MW),
Pehur (18MW) and combined cycle power plant at Faisalabad (450MW) are
planned to be commissioned during the year 2007. Mangla Dam raising
project would also add 150 MW capacity to the national grid by June 2007.
Besides this, Khan Khwar (72MW), Allai Khwar (121MW), Duber
Khwar (130MW) and Kayal Khwar (130MW) are expected to be completed
in 2008 along with Golan Gol (106MW) and Jinnah (96MW). Moreover,
Matiltan (84MW), New Bong Escape (79MW) and Rajdhani (132MW) are
expected by 2009 while Taunsa (120MW) is likely to be completed by 2010.
Sources say WAPDA has also planned to install a high efficiency combined
cycle power plant at Baloki (450MW), which is expected to be completed by
2010. In addition of these, power plant 1 & 2 of 300 MW each at Thar Coal
with the assistance of China are also planned for commissioning in 2009,
sources said. Moreover, efforts are also under way with China National
Nuclear Corporation for the construction of a third nuclear power plant with
a gross capacity of 325 MW at Chashma, they added.
When contacted, a WAPDA official said there is no power shortage
in the country at present as the Authority still has over 1,000 MW surplus
electricity. However, he admitted that the shortage may occur in the year
2007 and onward and said the Authority will utilise all options including
running of IPPs plant at full capacity to avert any possible crisis.
About the system augmentation to bring down line losses, the
official said the Authority would spend Rs 3.5 billion on augmentation of
distribution lines this fiscal while another Rs 5 billion will be consumed on
transmission lines. “We have been negotiating Rs 9 billion loan with a
consortium of local banks to upgrade and augment the power transmission
system,” he disclosed. The official further said that five new transmission
lines of 220-KV would be installed by the end of 2004, that would ensure
smooth supply to the consumers. He expressed full trust on present
transmission and distribution system and said it could easily sustain the load
of total installed power generation in the country.
July 2, 2004
http://www.energybulletin.net/883.htm
M AJOR E NERGY C RISIS F EARED

Pakistan is most likely to face a major energy crisis in natural gas, power and
oil in the next three to four years that could choke the economic growth for
many years to come, official estimates and energy experts suggest.
Pakistan’s total energy requirement would increase by about 48 per
cent to 80 million tons of oil equivalent (MTOE) in 2010 from about 54
MTOE currently, but major initiatives of meeting this gap are far from turning
into reality, said a former petroleum minister on condition of anonymity for
the simple reason that he had also served the present government.
Major shortfall is expected in the natural gas supplies, he said.
According to official energy demand forecast, he added, the demand for
natural gas, having about 50 per cent share in the country’s energy
consumption, would increase by 44 per cent to 39 MTOE from 27 MTOE
currently.
Partly contributed by gas shortfalls, the power shortage is expected to
be little over 5,250MW by 2010, he said, adding that the oil demand would
also increase by over 23 per cent to about 21 million tons in 2010 from the
current demand of 16.8 million tons.
This would leave a total deficit of about nine million tons of diesel
and furnace oil imports, he said. Since the gas shortfalls were expected to be
much higher, the country would need to enhance its dependence on imported
oil, thus increasing pressure on foreign exchange situation, he added.
Last year’s oil import bill amounted to about $6.5 billion compared
with about $3.5 billion in 2004-05, mainly because of higher international oil
prices - a burden expected to be even higher in future as a result of growing
Middle East crisis.
Current year’s oil import bill has again been projected by the
government at about $6.5 billion on last year’s average prices, which have
started to rise in the recent days.
According to the former minister, the government had planned five
major initiatives to meet these energy requirements. They included three gas
import pipelines, Gwadar port as energy hub and LNG import. However, four
of these measures, including the three import pipeline projects, show no signs
of progress for various reasons while concentration on energy facilities in
Gwadar would chiefly depend on security situation, besides oil and gas import
pipelines.
Planning Commission sources said the government had planned to
add an overall power generation capacity of about 7,880MW by 2010. Of this,
about 4,860MW is to be based on natural gas, accounting for 61 per cent of
capacity expansion.
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However, the gas-based power expansion of about 4,860MW would

remain in doubt since these estimates were based on gas import options for
completion in 2010, 2015 and 2020, said the sources.
The fifth initiative of LNG import was on schedule and would start
delivering about 0.3 billion cubic feet of gas (BCFD) by 2009 and another 0.5
BCFD by 2015, said the sources.
Petroleum ministry officials are not ready to speak on record about
gas import options and resultant overall energy shortfalls because of recent
political developments on Iran-Pakistan-India pipeline project and security
situation in Afghanistan and non-certification of gas reserves in Turkmenistan.
According to World Bank estimates, a demand gap (supply shortage)
of about four per cent of the total demand, is expected in 2010. Even though
this gap would be met by LNG imports, it would again increase to 20 per cent
of the total demand. The bank said the indigenous gas supply would fall from
32.6 MTOE in 2010 to 20.7 MTOE in 2025 while the ‘gas supply-demand gap’
would rapidly increase as demand is expected to grow continuously,
quadrupling in 2025.
As per the World Bank estimates, the gas imports will represent
almost 67 per cent of natural gas supply in 2025. One can, therefore, gauge the
quantum of shortage in case import pipelines are not materialised.
Pakistan’s gas reserves are 32.8 TCF at present, with reserve-
production ratio in the order of 27 years, considering that domestic production
does not grow substantially. Power sector demand represents 41 per cent of
total gas consumption, general industries 24 per cent, fertiliser 7.8 per cent and
domestic-commercial 22.8 per cent, cement 1.5 per cent and CNG 2.8 per
cent.
Demand growth has been up to 8.5 per cent in recent years and is
expected to be seven per cent with power industries and domestic
consumption accounting for 82 per cent. Gas demand already displays
seasonal pattern with national demand growing in winter beyond transmission
capacity. Therefore, supplies to large users mainly industries and power plants
are curtailed during winter months to ensure supplies to domestic, commercial
and small industries. Annual production at present is about 1.16 TCF.
Khaleeq Kiani, Dawn, July 28, 2006
http://www.dawn.com/2006/07/29/top16.htm
P AKISTAN ’ S Q UEST FOR E NERGY S ECURITY

Energy has become an important prerequisite for the economic development
of a country. On one hand it is used for the industrial and agricultural
purposes and on the other hand it is required for domestic use of the citizens.
Natural gas is the fastest growing primary energy source. Globally
consumption of natural gas is projected to increase by nearly 70 percent

between 2002 and 2025, with the most vigorous growth in demand expected
among the emerging economies. Consumption of natural gas worldwide
increases in the forecast by an average of 2.3 percent annually from 2002 to
2025, compared with projected annual growth rates of 1.9 percent for oil
consumption and 2.0 percent for coal consumption. The electric power sector
accounts for almost one-half of the total incremental growth in worldwide
natural gas demand over the forecast period.
South Asia is important to world energy markets because it contains
1.3 billion people and is experiencing rapid energy demand growth. After
India, Pakistan and Bangladesh are the next largest South Asian countries in
these categories. Economic and population growth in South Asia have resulted
in rapid increases in energy consumption in recent years. The major energy
issues facing South Asian nations today are keeping up with rapidly rising
energy demand. Agency for energy consumption has projected that by the year
2010 South Asian countries shall be consuming more than double the current
levels of primary commercial energy.
Pakistan’s largest energy source is natural gas, with demand and
imports growing rapidly.
Currently, natural gas supplies 49 percent of Pakistan’s energy needs.
According to the Oil and Gas Journal (OGJ), as of January 1, 2005, Pakistan
had 26.83 trillion cubic feet (Tcf) of proven natural gas reserves. Pakistan is
looking to increase its gas production to support increasing consumption
through Pipelines from Iran and Turkmenistan. Currently, Pakistan ranks third
in the world for use of natural gas as a motor fuel, behind Brazil and
Argentina. In addition, Pakistan hopes to make gas the fuel of choice for
future electric power generation projects. Pakistan ambitiously seeks to
increase oil production through new alliances with foreign companies.
Pakistan’s net oil imports are projected to rise substantially in coming years as
demand growth outpaces increases in production.
Pakistan will see power shortages by 2007 unless actions are taken to
increase generation and reduce transmission losses. Pakistan has 18 gigawatts
(GW) of electric generating capacity. Thermal plants using oil, natural gas, and
coal account for about 70 percent of this capacity, with hydroelectricity
(hydro) making up 28 percent and nuclear 2.5 percent. Pakistan's total power
generating capacity has increased rapidly in recent years, largely due to foreign
investment, ultimately leading to a partial alleviation of the power shortages.
Pakistan often faces load shedding in peak seasons. Transmission losses are
about 30 percent, due to poor quality infrastructure and a significant amount
of power theft. Periodic droughts affect the availability of hydropower. The
Government is understandably engaged in a vigorous effort to expand the
nation’s power generation capacity through building of dams and inviting
foreign investors for establishing thermal units in the country. The things are,
6 IPRI Factfile
however, seemingly getting out of its hand due to the yawning gap between
supply and demand of electricity.
Coal currently plays a minor role in Pakistan’s energy mix. However,
Pakistan contains an estimated 3,362 million tons, sixth largest in the world.
President Musharraf has stated that coal should make up more than the
current 1 percent of electric power generation in Pakistan. The Pakistani
Ministry of Industries and Production has granted a Chinese company to build
two coal-fired power-generation plants to supply 600 MW of electricity. Aside
from power plants generated by coal, Pakistan is also working to expand the
use of wind turbines. For instance, the Pakistan Alternative Energy
Development Board (AEDB) recently approved New Park Energy Phase I, a
400-MW wind project near Port Qasim.
Energy cooperation is the key to regional development. Pakistan’s
government is working on plans to build an Iran-Pakistan-India (IPI) pipeline
that spans from Iran’s massive reserves to Indian markets across Pakistani
territory. Russia’s biggest gas producer, Gazprom, has recently shown interest
in the $7.4 billion pipeline project and has indicated its desire to invest in it.
While Iran and Pakistan have made agreements to move forward, India still
remains reluctant due to its recent nuclear deal with USA. Iran has offered to
cover 60 percent of the construction costs of the pipeline and Pakistani
officials have stressed their ability to safeguard the pipeline. Iran will lay the
pipeline from Pars to Pakistani border. Islamabad will build the pipeline from
the Iranian border to its Central Pakistani city of Bhong in District Rahaim
Yar Khan. Both countries have discussed the gas pricing formula, project
structure, its feasibility, gas off-take volumes and the gas sales and purchase
agreement. In spite of US pressure for not building IPI pipeline, Pakistan
remains determined for the pipeline. In fact, in the face of the US pressure
against IPI, now two pipelines from Iran are under "active consideration" —
one for Pakistan and the other for India, through Pakistan. If India participates
in IPI project, Pakistan will be entitled to transit fee. But, if Pakistan builds the
pipeline from the Iranian to the Indian border, then it will also be entitled to
transportation charges.
This is the great vision of President Pervez Musharraf and Prime
Minister Shaukat Aziz according to which Pakistan is going to become an
energy corridor for China. Islamabad’s negotiation for a second transnational
gas pipeline from Turkmenistan to Pakistan via Afghanistan (TAP) also
entered a final stage because experts are of the view that Pakistan's fast
growing energy demand requires laying two gas pipelines. Washington
supports the TAP project and has assured the pipeline’s security through
Afghanistan. It also holds good prospects for other South Asian users,
depending on the size of supplies that Turkmenistan can arrange. The plans to
build a third transnational gas pipeline from Qatar to Pakistan and India—-
Gulf-South Asia Pipeline (GUSA)-—seem to have slowed down because of
the gas availability issues. "The plan to import gas from Qatar is not, however,
shelved," maintained by Jahangir Khan, spokesman for Ministry of Petroleum
& Natural Resources.
With the development of Gawadar Port, Pakistan can provide the
trade and energy corridor for the whole region especially to China. In this
perspective president has rightly remarked so, “When Karakoram Highway
was built, the world called it the eighth wonder, and we can create the ninth
and tenth wonders by establishing energy pipelines and railway linkages
between the two fast growing economies.” China and Pakistan agreed to
widen KKH for larger vehicles with heavier freight. The rebuilding of KKH
will enable China to ship its energy supplies from the Middle East from
Gwader Port in Balochistan through the land route of KKH to western China,
which is its development hub. This alternative energy supply route will reduce
Beijing’s dependence on the Malacca Straits. Pakistan also wants to set up a
“crude transit route” through Gwader Port for Beijing’s energy shipments
from Iran and Africa. For this reason, Pakistan is building oil refineries, natural
gas terminals, oil and gas equipment, and transit facilities in Balochistan. China
has agreed to help Pakistan with its plans for the development of its oil and
gas industry. With this planned elaborate energy infrastructure, KKH has
assumed an added significance as an alternative land link between China and
its energy sources, of which Iran is at the top. The recent Pak-China energy
forum in Islamabad was a major step in formulating future strategy to ensure
energy security of both countries.
Muhammad Munir, Pakistan Observer, 20 May 2006
W ASTE TO E NERGY IS N EEDED IN P AKISTAN

Growing urbanisation and changes in the pattern of life, give rise to generation
of increasing quantities of wastes and it’s now becoming another threat to our
already degraded environment. However, in recent years, waste-to-energy
technologies have been developed to produce clean energy through the
combustion of municipal solid waste in specially designed power plants
equipped with the most modern pollution control equipment to clean
emissions. Yet, solid waste management practices differ for developed and
developing nations. In developing countries like Pakistan, institutions charged
with the responsibility to make decisions on solid waste management, operate
in the enormous information, policy and strategy vacuum and lack therefore
the ability to address this looming environmental disaster.
The perfect ‘case study’ of information gap in selection of appropriate
methodology to dispose municipal waste exhibited by the apex civic authority
of Pakistan is when the capital development authority has finally decided to
solve the ever-increasing volume of municipal waste by landfill in groundwater
8 IPRI Factfile
recharge area. While in developed countries, landfills are now bracketed as

‘obsolete’ and ‘mines of the future’ after observing several problems like
pollution and contamination of groundwater by leachate and residual soil
contamination after landfill closure and simple nuisance problems. This is the
very reason why in the United States sanitary landfill techniques have steadily
decreased from 8,000 in 1988 to 1,767 in 2002. Extensively focusing on
turning waste to energy, municipal authorities in USA have realised the
contribution of waste to an increasing electricity shortage.
Today in America, 2500 MW are solely generated by the waste-to-
energy plants. Many other countries in the world, Sweden, Japan included,
have applied this technology since the last 20 years. In the sub continent, India
installed three projects to produce electricity from waste with a total capacity
of 17.6 MW. Although these ‘made in India’ power plants are generating
electricity by direct incineration, causing pollution and must be upgraded by
sophisticated monitoring systems to check pollution. These examples are
enough to establish that CDA’s ignorance of modern technologies is surely
not simply a lack of ‘access to information’, but questions the professional
capabilities of the planners within its corridors.
The site selected for the landfill project is at Kuri, an ancient city of
Potwar and its aerial distance is hardly five kilometres from sector G-5, known
as the nucleus of Islamabad. Though, in July 2003, the same site was
considered for a landfill project but UNDP out rightly rejected and warned
that environmental cost would be considerable, besides air pollution,
contamination of groundwater if Kuri was selected as a landfill project. JICA
in 1988 also compiled a detail investigation report, which established that the
area is the recharge zone of the aquifer catering for more than 50 per cent of
the twin cities’ drinking demand. Based on these serious environmental
constraints, as its location is up a slope and within the flood plain of Gumrah
River, the recharge-basin of the twin cities aquifer, the site was rejected.
Recent floods substantiated the finding of all the reports, as the site is
definitely within the flood plains of the Gumrah River and would need to be
protected on a priority basis, especially as water shortages is now a permanent
problem of the twin cities.
Whoever selected and approved the site for the ‘disaster of the future’,
showed ignorance of the above reports and absolute ignorance of the adverse
environmental impacts this project would create. Is this ignorance simply
unawareness of the planners or is it complete apathy towards anything old,
which rejects that Kuri is recorded as an ancient city of the Potowar Region.
As CDA is constantly focusing on developing tourist attractions, why not
preserve this historical area? Aware of the unprofessional management at
CDA’s varied directorates one anticipates leachates from the landfills,
polluting the amazingly still clean groundwater table, while the wind will carry
waves of leaking gases towards the G-5 Sector, farther adding to the prevalent
health hazards of the capital.
‘Access to clean water’ has been given the ‘top priority’ flag by the
president. Selecting a site along the Gumrah River, known to recharge the
groundwater along its winding course through Chak Shehzad and Kanna
shows the warped priorities of the planning commission that approves
projects, the ministry of interior responsible for CDA affairs and the CDA
itself. Had CDA only followed the minutest details provided in the Federal
Capital Commission Reports of 1960 by the earlier planners of the capital city,
Islamabad today would have been a model for the rest of Pakistan.
The CDA ignored the most recent seismic zoning report of the region
too. According to EPA US regulations, duly adopted by Pakistan’s EPA, there
should be no significant seismic risk within identified landfill sites. Kuri is
within a highly sensitive earthquake zone, according to new seismic zoning
maps prepared after the earthquake 2005. An earthquake having a magnitude
of 4.2 was recorded on July 7, 1989 and its epicentre was at a distance of 10
kilometres from Kuri.
Had the spread of this infectious disease the ‘vacuum of information’
been contained in time, CDA would surely have been able to diagnose that the
estimated cost of two billion rupees for the landfill site, would have sufficed
for setting up an ‘energy-to-waste’ plant in the city. With load-shedding a
permanent crisis in Pakistan, adding some extra megawatts through waste-to-
energy could have solved many ills in the rapidly growing energy needs.
A vacuum of information has not allowed the CDA to communicate
either with the alternate energy development board, established by the federal
government in 2003. This board was given the mandate to solve the energy
crisis that is facing this country through renewable technologies. Although
advertisements in the printed media asked for feasibility studies of ‘waste-to-
energy’ units for ten cities of the country, the twin cities were ignored. Had
mutual interactions been part of the government systems, the funds available
to the CDA for the ill-fated sanitary landfill, and the technical know-how of
alternate energy development board (AEDB), Islamabad could have prided
itself of being the first ever waste-to-energy unit in the country today.
The decision to construct a landfill project at extremely sensitive areas
need not only to be reviewed but also need to empower the AEDB to generate
electricity from waste to cope with the energy demand in the lines of
international environmental commitments avoiding violation of the Kyoto
Protocol and Stockholm Convention. Now decision-makers have to choose
whether to allow the CDA to go ahead with the landfill project, to dump waste
for adding more pollution and contamination of groundwater or to allow
production of environment friendly energy.
Arshad H Abbasi, November 9, 2006
http://www.alternative-energy-news.info/waste-to-energy-pakistan
10 IPRI Factfile
T YPES OF E NERGY
Energy can be differentiated as

1. Kinetic energy
2. Potential energy
Kinetic Energy
1. Sound
2. Wind
3. Mechanical for example moving piston in a cylinder
4. Electrical energy. Electricity, lightning
5. Thermal Energy, Heat, hot water, steam
6. Light , microwaves, x-rays , solar, ultra violet rays
Potential energy
1. Gravitational energy. Hydro power, ball above ground
2. Spring . stretched rubber band
3. Magnetic planetary poles
4. Nuclear , fission, fusion, heavy water uranium
5. Chemical , gasoline, batteries, oil natural gas, gun powder, coal, wood
2007
http://www.energy.com.pk/energytypes.htm
T HERMAL E NERGY
Thermal Energy is the oldest type of energy. With all known history available,
Wood was always used for heating and cooking. In 2nd world war fossil fuels
entered in the form of coal to get the energy, until liquid fuels were discovered
and because of their convenience of transportation they took over as major
contributors of the energy source.
Once the steam engines were invented then the coal or liquid fuel was
burnt in the boilers and the heat produces steam which is used to drive
electrical generators, or any other mechanical device.
Rudolph diesels invention of diesel engine revolutionaries the energy
concept and today we see sine the majority of machines moving on diesel
engines.
Diesel engines can be 2 stroke or 4 stroke type. They can be in line or
arranged in V or even W shape. They can be single acting or double acting.
Another method of converting thermal energy to mechanical energy is
by the gas turbines. Turbines are also used to run by steam or hot gases which
are produced by igniting fuel.
For converting thermal energy to electrical energy alternators are used

to drive on constant RPM.
The choice of gensets strictly depends on the requirement of the
client, before ordering a power plant following points to be considered
1. Expected demand of the power.
2. Type of fuel required
3. Space available for the power plant
4. Avilability of genset
5. Avilability of local service back up and stock of parts
6. Price is paramount importance and hidden expenses should be looked
carefully
The major manufacturers and suppliers of Gensets based on internal
combustion engines are given below
1. MAN
2. Wartsila
3. Caterpillar
4. Jen Bacher
5. Waukesha
6. Mitsubishi
7. Detroit Diesel
8. Rolls Royce
Internal combustion engine can obtain 30-50% thermal efficiency. It
means that around 50% energy is wasted in the form of exhaust gases , cooling
systems and radiation. Therefore for larger plants heat recovery systems are
utilized.
In Pakistan due to attractive gas prices this is a general trend that gas
operated power plants are preferred if gas connections are available.
The gas gensets are available from less than 1 MW sizes to 6 MW
configuration. Normally they are V type and 12,16 18 and 20 cylinder
configuration.
In addition some models are available on duel fuel technology which
can be operated simultaneously on gas and furnace oil.
The price of a 3 MW gas genset can be expected around 1 Million $.
However low RPM engines will be more costly Unit cost of fuel on gas genset
can be evaluated as follows
Fuel Cost Rs 2.7 (depends upon the genset )
Maintenance Rs 0.20
Lubricating Oil Rs.0.10
Chemical R Rs. 0.02
General stores Rs. 0.01
Labor Rs.0.10
Overhead +Insurance Rs.0.07
Financing 0.20
12 IPRI Factfile
Total Rs. 3.40

The engines which are running the fuel cost is only variable and can be
calculated by multiplying fuel cost by a factor of 225. (225 grams / KWHR is
an average net fuel consumption expected.)
2007
http://www.energy.com.pk/THERMAL_%20ENERGY.htm
H YDEL E NERGY
Water flowing in the rivers has kinetic energy. Once they are used to drive the
turbine and produce electricity the power generated as Hydel Energy.
Power produced by the turbines depends on quantity of water
flowing/minute and the head of water available.
Mostly river flows by melting glaciers on high mountains. Once the
water start flowing in the valleys it changes its head very rapidly. This energy
can be converted into electrical energy.
Two method are normally used:-
1. Dams
2. Run of River projects.
In case of Dams the water flow is restricted by making a huge storage
device and the head of water is increased, the water then is allowed to flow by
means of gates and pass through the turbines, the head of reservoir level is
maintained to provide uniform power, and the water stored in peak season
additionally is used for irrigation purposes in dry seasons.
In run of river projects the water is diverted through the tunnels and
once it gains the head allowed to fall and pass through the turbines and back
to river. the water in these projects is continuously flowing and not being
stored.
Geographical situation is paramount importance in choosing a
suitable site for the hydro project and it evolves a very serious time and money
consuming study.
Once a site is located further detailed feasibility study is required
before proceeding any serious effort to start the work.
The feasibility study should include following field work.
1. Detailed Mapping of the area
2. Topographic study of the area
3. Seismic refraction study
4. River flow data
5. Weather data containing, Temperatures, pressures, rain humidity
6. Water sampling and testing
7. Environmental study
8. Social impact
9. Wild life and fish study

10. Identification of stake holders of the area
11. Coring and getting samples of the soil at 50-200 meters depth
12. Laboratory testing of the cores samples
13. Tectonic study to evaluate earth quake dangers
2007
http://www.energy.com.pk/hydel.htm
W IND E NERGY
Pakistan is facing acute shortage of energy. with 7% increase of its economy

this short fall soon to slow down its economic growth and will shatter its
dream to become one day a developed country.
Most of its energy demand is being met with either Hydro power or
thermal units. Pakistan is spending a very large amount of foreign exchange to
purchase the furnace. The gas reserves already start depleting and oil markets
are sky rocketing. To overcome this shortage Government take a initiative to
investigate Alternate energy resources in Pakistan developed Alternate Energy
Board AEDB. The Board is headed by Retd Air Marshal Shahid Hamid.
identified 50,000 MW energy potential from wind resource
Pakistan is blessed with a large resource of wind corridor. Although
Pakistan meteorological Department was gathering wind data for quite long
time But recently United States provided wind energy map for Pakistan which
confirms a strong wind corridor in Sind coastal area.
AEDB issued about 80 LOI to the investors List of LOI holders )to
develop 50 MW wind farms. Out of which 15 are already issued the land and
feasibility reports and financial closings are in progress.
The following is a brief road map for developing a wind form
1. submission of proposal by sponsor
2. Review of proposal by AEDB
3. Posting of Bank Guarantee
4. issuance of letter of intent ( LOI )
5. Feasibility study
6. Generation License
7. Tariff Determination
8. Submission of Performance Guarantee
9. Tariff determination by NEPRA
10. Submission of performance guarantee
11. Issuance of Letter of support
14 IPRI Factfile
The first requirement of conducting feasibility study is to install a

wind mast. The three major manufacturers of wind data are listed below. This
document explains the method for installing weather station.
1. www.wilmers.com
2. www.ammonit.de
3. www.environdata.com.au
Geological, seismic, tectonic and environmental studies will be

required along with Digital mapping and topography of the site for preparing a
bankable feasibility study. A confirm EPC cost will also be needed for
calculation of tariffs.
Some large manufacturers of wind turbines are given below
1. Denmark (27.9%)
2. GE Wind, US (17.7%)
3. Enercon,Germany (13.2%)
4. Gamesa, Spain (12.9%)
5. Suzlon, India (6.1%)
6. Siemens, Denmark (5.5%)
7. Repower, Germany (3.1%)
8. Nordex, Germany (2.6%)
9. Ecotecnia, Spain (2.1%)
1 Mitsubishi, Japan (2.0%)
WIND ENERGY BASICS

Power developed by a wind turbine can be mathematically shown in following
formulae
1/2xdensity of air x effective area of rotor blade x cube of speed of
wind
The lay out and designing of the wind form can be done by wind energy
planning and project software available in market in a reasonable price . One
such software is Wind Pro which is a very convenient tool for project
management.
Environmental Protection agency require a detailed environmental impact
study of the project. The following issues should be discussed detail
1. Birds collision or alteration of their migration routes
2. Noise impact
3. flickering
2007
http://www.energy.com.pk/Wind%20Energy.htm
R ISING O IL P RICES
All predictions now failing and the oil prices are rising and now about to reach
100 $ level. who knows that in market trading if even the customers are buying
the oil on +100 $. the reason being given for this enormous rise is the US oil
reserves are depleting and therefore customers are ready to purchase the oil at
any price available.
The future prospects also not very encouraging. All trading is being
made on +90 $. OPEC promised to raise its out put but with out any
16 IPRI Factfile
significant effect. for the time being the prices were dipped but risen again on
much higher values.
The winter is just arriving and nobody knows that these prices will
settle at what level.
Rising tension between US and Iran is one reason. Some sources are
predicting the attack on Iran is imminent. If the condition continues like this
who is going to be benefited.
Emerging economies and developing will suffer most. Their economy
is dependent on energy resources. how can survive and how can they meet
their production commitments.
In recent months oil surged from 70$ to 92$ and still rising. Those
industries which consumes more energy will suffer with maximum. It will lead
to rise of inflation shutting down in efficient industries and rising un
employment in third world countries.
When come to individual the poor will suffer most .High income
group will survive and it will not effect on their livings. But the strains coming
on poor in third world countries will transform to social unrest and hence will
cause instability in the region.
Pakistan economy is already under intense pressure. On one hand it
has the competitors like China and India giving cut throat fight. Another end it
has continuous problem on its western borders draining its resources and
causing political chaos. The election is just three months away and the results
expected are the change of government to Pakistan Peoples Party.
Pakistan exports and its all economic activities are dependent of
uninterrupted energy supplies for its energy requirement maximum share still
of furnace which is imported from Middle East countries. Rising prices will
bring a wave of inflation.
Already many textile mills closed down due to higher production costs
which make it un economical. further increase in oil prices will definitely bring
more strain on existing working units. In election environments it will be
definitely a difficult decision for Prime Minister Shaukat Aziz to authorize the
fuel prices in Pakistan.
But he has no other option. How far the Government continues to
absorb the fuel bills eventually it has to increase the prices. And again who will
suffer simply the poor
Today only there are news that Pakistan is going ahead 2000 MW
power plant based on furnace oil. Now we have to look for the future and
sustainable economic activity.
Development of Renewable energy resources are not moving ahead
beyond symposiums and conferences or in other crude words lip services.
Pakistan's future as economic leader in the region is at stake if sustainable
cheap energy resources are not developed on priority.
So the solution is not so simple. Renewable yes. The hurdles should

be identified and removed on priority.
One area which we want to emphasize is the conservation of energy. We have
to persuade all concerned that all possible measures to be taken to save energy
so it can be used for future.
Energy efficient plants and machines are the recipe for our survival.
2007
http://www.energy.com.pk/risingoilprices.htm
P AKISTAN C OAL R ESERVES S HOULD BE E XPLORED

The energy shortage is increasing day by day and the resources of Pakistan are
limited and this year we are witnessing increasing of imported fuel bill. This is
time that Pakistan should explore all its available resources.
We see a limited progress in alternate energy sector. But so far little
efforts are being made to explore and use the coal reserves in Sind.
This is claimed that coal quality is inferior and having low BTU. This
is a challenging task. Today technology and boilers are available that can burn
any kind of coal. Therefore all possible measures should be adopted to utilize
existing resources.
The smaller size power plants near the coal mines which can get direct
feed and connect to National Grid will be an ideal configuration.
2007
http://www.energy.com.pk/news%20and%20views.htm
P AKISTAN I RAN A GREE ON G AS P IPE L INE P ROJECT

This week very good news coming in energy sector that Iran and Pakistan
finally agreed to go ahead with the project.
The gas project which was initiated by Iran India and Pakistan was
having many constraints and was continuously under pressure from US. India
was asking more time to make the decision and therefore the project was
delayed.
Finally Iran and Pakistan decided to continue with the project and
when ever India decides it can be accommodated in the project extension.
The major issue which is now resolved is the gas price which is now
related to petroleum prices as per the international practice. For all practical
purposes the gas purchased will be based on BTU values as agreed by both
partners.
For Pakistan it means that the gas will be on higher price than the
domestic supply which is subsidized for common house hold users.
18 IPRI Factfile
The gas is prime energy source for domestic usage as well as fertilizers
and power generation companies.
This is expected that the average price when fixed for local consumers
will take care for common users as well as industrial users
Iran wants quick decision for Gas Pipe

Iran asking India to make the decision of joining Gas Pipe Line project
soonest, otherwise the project will be started with Pakistan.
Reluctance of India to make a firm decision is understandable due to Geo-
Political Scenario. However this project is vitally important and profitable for
Indian sustainable economic growth. Therefore a positive outcome is expected
soon.
2007
http://www.energy.com.pk/pakiran.htm
ECNEC A PPROVES E NERGY P ROJECTS

The Executive Committee of the National Economic Council ECNEC
approved 23 projects worth 116.5 Billion Rs. The meeting was the last on the
chairman ship of Prime Minister Mr. Shaukat Aziz whose term is expiring in
three weeks.
Energy sector was given prime consideration and the development of
nuclear power projects approved. Pakistan facing acute shortage of energy and
this is a wise decision to focus on nuclear energy which is renewable, cheap
and environment free.
with furnace reaching 100$ Large Hydel projects having social
concerns ,wind turbines not available in market, and gas reserves depleting
nuclear becomes most attractive option.
2007
http://www.energy.com.pk/ecnec.htm
E NERGY C RISIS IN P AKISTAN - I

We have written many blogs on this subject. But we never thought that the
situation will reach to such disastrous condition so soon.
Last week we saw a series of disasters in energy sector. Pakistan
electrical energy production sustain shortfall of 3000 MW. Actual figure is
slightly controversial as we have seen various statements emerging from
various sectors.
Production units were shut. There was severe load shedding through-
out the country. APTMA was forced to accept volunteer load shedding of 5
hours each day on all units. And the residential areas were with out power
maximum time of the day.

The situation was worsened because Sui Gas Company already
stopped the supply of industrial units and was going through a system of load
shedding it self. Therefore captive units were shut off due to non avilability of
the gas. The IPP who were operating on furnace could not get the regular
supply of furnace and they did not bother to keep enough stock for
contingency therefore stop shutting.
And then naturally the blame game started, starting from the water
shortage in Dams to furnace oil transportation problem, violence in Sind and
maintenance activity in some independent power producers.
Now it is officially declared that in last 10 years not a singles MW was
added. We have seen hundreds of seminars, conferences and events on energy
issues in Pakistan. The money wasted there if utilized then at least we can add
few hundred MW of Power.
The fact is that Pakistan is sustaining an acute shortage of Power. Its
demand is increasing and production is declining due to aging of the plants.
And no solution is in sight. The projects which are in pipe line will
not come in line before 2009. And even the magnitude is such that it will not
be able to fulfill the demand of today.
WAPDA is in favor of large dams and thinks that the delay of
construction of large dams was the basic reason for the shortage of power.
The issue is very controversial subject and it is not expected to resolve soon.
Moreover the construction of the dam will take at least 10 years and if the
situation persist our economy will then come to a stage where it will need any
power any more.
The situation demand an urgent decision. A decision which is vital for
the safety, stability and survival of Pakistan.
Energy is a key factor for the stability and prosperity of Pakistan. If
our production units keep on shutting then un employment will rise and hence
street violence will rise.
This is the time to restructure our energy policy. In our opinion
instead of many agencies one central ministry should look after the energy
issues in Pakistan.
This is utmost important that an environment should be created
where the investments are made in energy sector. Recently Government is
advocating a policy of promoting the investment in Private Sector. Although
the response is favorable but the out come is very slow.
Now Government has to make a huge investment in energy sector.
And the investment has to be in direct purchase of power plants,
manufacturing main and auxiliary units,
The objective should be utilization of diversified energy resources. It
is imperative that renewable energy resources should be explored but still
conventional thermal and coal fired power plants should be established.
20 IPRI Factfile
The strategy should be to explore indigenous local resources. For

example furnace oil plants are best suited in Karachi where the port and
refinery facilities are available. Gas plants to be installed in Baluchistan, Sind
and N.W.F.P near to existing gas fields. N.W.F.P should explore medium,
small and micro size hydro projects. Sind must use its Coal reserves. Wind
turbines to be installed in coastal belt, and Punjab must explore bio-gas and
city waste plants.
From US and Europe we should borrow and purchase the technology
to manufacture various power plants in Pakistan. For example if we start
building 1-3 KW micro hydro, wind or solar power plants in Pakistan
sufficient to provide energy to one home we can sell to individual families
direct at low installments. The cost will be recovered in utility bills
compensation.
For the furnace IPP and captive power plants should be allowed to
import furnace oil duty free. Then existing laid up power plants will again
become operational.
All efforts to be made that Iran Pakistan gas pipeline project is
implemented soonest. Moreover one additional pipe line for crude oil to be
installed to reduce our dependence on sea route.
Pakistan is in need of energy very badly and urgently. Pakistan should
look for nuclear energy possibilities. Pakistan is one of seven countries in the
world who has an indigenous capability to operate the nuclear power plant for
last forty years.
Pakistan should look all alternatives to increase its electrical energy
production by 10,000 MW in two years. This is a very challenging and difficult
task. But if it fails its target then all other indicators will go negative leaving
behind a disastrous situation.
A dedicated campaign of energy conservation is needed to spread the
awareness of energy conservation programs. This is also believed that in
general major energy consumers have little or no awareness of energy saving
procedures. The machinery when purchased a very little emphasis is given on
electrical or mechanical efficiency of the plant. The result is that our
production units are consuming much more energy than their competitors
resulting their product cost high and it is not competitive in international
market.
Energy conservation is indeed energy production. So if an investment
is made in this sector then it will pay back in 3-5 years.
This is the responsibility of Government to start various energy
conservation programs suited for various industries.
2007
http://www.energy.com.pk/energy%20disastor.htm
E NERGY C RISIS IN P AKISTAN - II

A very common question asked in Pakistan is about the most burning issue in
Pakistan? The answer you will get may be a list of hundreds of issues which
start from Kashmir and will end on terrorism or militancy etc etc.
Recently Mr. Mansha in an interview in CNN replied same question
by giving a simple answer that water and energy are two most valid problems
in Pakistan.
Energy is a most problematic issue in the world. Whereas oil prices
are steadily rising and no stability is seen in near future. Demands of energy
from the emerging markets like China and India are growing day by day.
Pakistan with official figurers of growth rate of 8% will have a definite rise in
demand of energy for minimum 3%
In USA the Gulf of Mexico is famous for oil producing and refining
facilities. The prosperity of Houston is only due to oil industry being
flourished. However the weather is not so kind on this area and hurricanes and
tornadoes commonly hit the southern part of USA and Caribbean.
Such is the volatility of fuel market now that just news of one
hurricane developing in Caribbean shoots the oil prices in the world. A few
years before oil was being traded on 20$ and no body ever thought that the
weather conditions in the gulf can effect the oil market.
Politically the Iran situation is deteriorating day by day where as Iraq
condition is not stabilizing. Oil today is being traded around 65 $/, and the
most vital question now is what will happen if the prices rises to 75 $ or even
one hundred $/barrel.
Pakistan with small manufacturing market, surrounded by major
emerging economies like China, India, Malaysia, Indonesia, Philippines and
Bangladesh will be worst effected with the rise of energy prices.
As a rule of thumb modern day manufacturing industries utilize at
least 33% production cost in terms of energy prices. An increase of energy
cost will effect their production cost and will force the manufacturers that
either to reduce the labor cost or to remain competitive in market by
improving the quality standards.
Major giants China and India will benefit with this condition and
smaller economies will suffer badly.
Are our policy makers in Islamabad thinking for the gravity of
problem which is now just standing on our door step?
On famous oil embargo days a lot of research in Europe was carried
out to find the alternate source of energy. The findings are available even in
college books. However with the drop of oil prices such alternatives were
uneconomical and therefore shelved.
22 IPRI Factfile
This is the time that Pakistan now asses very carefully that in case of
oil prices rising to 75 $ what actions it should take to conserve energy and to
find the alternate source of energy.
A volunteer option for all energy users is to conserve energy. To make
the plants more efficient and to see that each drop of petrol is saved .If we
make serious study on this subject then we may achieve up to 20% saving in
energy ,hence saving in our production cost and making our products more
attractive in international market.
Of course the energy conservation programs cost money. However
the investment will be rewarding and will be beneficial in long terms.
Pakistan’s thermal units are day by day become aging, reducing their
output power. With the rise of demand very soon we will see an acute shortage
of energy and hence load shedding and shutting of the industrial units. This
will seriously affect our competitiveness in the international market.
A liberal and progressive policy with less bureaucratic approach
towards energy producing units will help and bring attractive investment in
Power sector.
This is the responsibility of government to look for the alternate
options for finding the energy resources. This investment can only be made by
the federal government.
This is the time of survival. Only the countries which are prepared for
the worst will have a prosperous future.
2007
http://www.energy.com.pk/energycrisis.htm
P AKISTAN ' S E NERGY C RISIS TO W ORSEN IN N EXT T WO

Y EARS
The Pakistani government is anticipating the energy crisis to worsen in the
coming two years due to a 50% increase in the demand and a rather slow
improvement in the supply, the leading Pakistani newspaper DAWN reported
Monday.
The power shortage, estimated to be 1000 to 2000 MW during the
current year, is likely to hit 3000 MW next year and to increase to about 5300
MW by 2010, said the report.
The overall energy requirement of Pakistan is expected to be about 80
million tons of oil equivalents (MTOE) in 2010, up by about 50% from the 54
MTOE of the current year, it said.
A government official told DAWN that the energy shortage was
severe and widespread in almost all areas, and natural gas, power, and oil
shortages were all posing risks to the economic growth in medium to long
term period.
Another official, quoted by the report, said that the development of

water resources would resolve the problem in the long run but in the short
term, there was a limit to constructing costly thermal power projects given
their high economic costs.
A major shortfall is expected in natural gas supplies, as an official
energy demand forecast indicates that the demand for natural gas, which
makes up about 50% of Pakistan's energy consumption, would increase by
44% to 39 MTOE from 27 MTOE currently, DAWN reported.
The government had planned five major initiatives, including three gas
import pipelines, the Gwadar port as energy hub and the LNG import to meet
these energy requirements.
But four of these measures, namely the three import pipeline projects,
are uncertain at present, while concentration on energy facilities in Gwadar
would chiefly depend on security situation, besides oil and gas import
pipelines, said the report.
Xinhua English Newswire, January 9, 2007
http://tdworld.com/news/pakistan-energy-crisis
W IND P OWER : A S OLUTION TO E NERGY C RISIS
TO encourage private investment in

power sector, the government
formulated power generation policy
(2002). However, progress in
commissioning of new power plants has
been slow. In the four years since the
revised policy was implemented, only
one 225 MW gas-fired power plant has
achieved financial close.
The extended time lag is not entirely unusual as power projects based
on natural gas and furnace-oil involve prolonged negotiations to secure
contracts guaranteeing uninterrupted supply of fuel over the life of the project.
Up till now, these contracts were entered into with state-owned energy
companies such as PSO and OGDC. As these corporations are to be
privatised, the government-guaranteed fuel-supply contracts might not be
available for new projects.
This will make project financing more difficult since a private
enterprise is more likely to default on its fuel-supply obligation over the 25-
year life of a power project than a state-owned corporation. This could
potentially result in further delays in implementing thermal power projects.
24 IPRI Factfile
As Pakistan’s energy needs are immediate , thermal and large hydro-

electric plants may not be the solution because such projects may take between
4-12 years to become operational. In order to meet the energy requirements,
the best option is exploiting wind energy because wind power projects can
start generating electricity within two years.
This is why wind energy is the fastest-growing source of power in the
world and its globally-installed capacity has risen from 20,000MW in 2001 to
70,000MW in 2006. USA alone is installing 4,500MW per annum and China
plans to install 20,000MW by the year 2020.
India offers a good example of a country that has embraced wind
energy and has added substantial electricity generation capacity within a short
period of time! It’s cumulative wind power generation capacity is 6,018MW, of
which 4,500MW was installed in last five years! If Pakistan can realise half the
growth that India has achieved, it can add 2,250MW to its electricity supply in
the next five years, much more than possible by pursuing thermal power
projects. In fact, wind energy can go a long way in meeting our acute energy
shortage. It has also the following additional benefits.
First, thermal electricity production ignores certain “negative
externalities”. Externalities are implied costs which are not reflected in the
price of a service. For example, a power plant running on natural gas will
divert its limited supply from domestic consumption as well as vital industrial
use. The total supply of natural gas is fixed and so its usage for power
generation could result in a shortfall in other sectors of the economy. An
example being the recent shut-down of 11 cement and two fertilizer plants due
to gas-supply shortage. The economic loss resulting from deficiency of natural
gas due to excessive reliance on gas-fired power generation is a negative
externality.
Similarly, in event of war or terrorism, supply routes of oil-tankers/
gas-pipelines will require extensive military protection. This extra cost of
security is also a negative externality of thermal power plants. The exclusion of
negative externalities understates the true cost of thermal power generation
and makes it appear cheaper than it is. Compared to thermal power
generation, wind power provides a secure and independent source of
externality-free energy.
Second, Pakistan’s current account deficit for FY2006 was recorded at
$5.7 billion. The deficit is likely to worsen next year when it is expected to
exceed $8 billion. The large increase in the current account deficit is mainly
due to a 66.6 per cent surge in oil-imports, a large portion of it is due to
increased demand from oil-fired power plants.
Any strategy to cut current account deficit has to deal with cutting oil
imports and this can be achieved by reducing reliance on power-generation
from furnace oil. Here again, wind energy offers an effective alternative to oil-
fired power plants which will help reduce the current account deficit.
Third,, thermal power tariff is vulnerable to spikes in oil prices similar

to the one in early 2006 when the crude-oil prices jumped to $78. As the tariff
regime compensates the IPPs for the cost of fuel, any sustained increase in oil
prices will feed into the tariff calculation and result in higher cost of electricity.
Exploiting wind energy makes economic sense since wind is free and it will
make cost of electricity generation less vulnerable to temporary or permanent
increases in oil prices.
Lastly, wind power plants will be able to claim carbon-credits
(certified emission reductions or CERs) for producing clean energy. CERs are
already trading on European commodities exchanges and a global trading
mechanism is being developed. Recently, an investment bank (Morgan Stanley)
invested more than $3 billion in CERs.
Therefore, CER prices are expected to rise as they continue to attract
interest. Under the renewable energy policy, the CERs will be shared between
the IPP and the government. This will have the effect of reducing the net-cost
of wind power since revenues generated from sale of government-owned
CERs will off-set a portion of the tariff paid to the IPP.
Exploiting wind power offers the best route for attaining sufficiency
in electricity production and reducing reliance on gas and imported furnace oil.
Though wind power requires greater investment per mega-watt produced,
however, unlike thermal power generation wind power avoids negative
externalities such as additional cost of protecting fuel supply routes.
Wind energy will help reduce the country’s oil-import bill and the cost
of power generation less vulnerable to fluctuations in oil prices. In addition to
all these benefits, windfall from sale of carbon credits will make wind power
an economically attractive proposition for meeting our electricity demand at an
accelerated pace.
Pakistan has a huge potential to develop wind power. The “wind
corridor” in the coastal area of Sindh alone has the capacity to generate
50,000MW and AEDB has put in place a `renewable energy policy that is one
of the most comprehensive and investor-friendly in the world. However,
progress towards first wind power plant has been handicapped by a severe
shortage in supply of wind turbines. The experience of other countries is that
once the first project is executed, subsequent additions to capacity take place
at an accelerated pace. This should be the case with Pakistan as well.
It is important that the government continues to provide incentives to
private investors in the form of an attractive tariff. This support is essential for
the development phase of wind power sector and to realise its potential.
Exploiting wind resources is not only in our economic interest, but serves our
security interest as well!
Malik Ahmad Jalal, Dawn, January 29, 2007
http://www.dawn.com/2007/01/29/ebr13.htm
26 IPRI Factfile
E NERGY C RISIS M AY G O FROM B AD TO W ORSE

The country may witness an aggravated energy crisis in the years to come as
the proposed thermal power house at Chichuki Maliyan with a capacity to
generate 500 megawatt electricity is in the doldrums, as the project has been
withdrawn from Wapda in a strange development, The News has learnt.
Right now power consumers are facing a massive power shortfall of
about 2,000 megawatt and this crisis will persist in the years to come as the
Chichuki Maliyan power project will get delayed.
Earlier the government had decided that the Chichuki Maliyan power
project would be initiated in the public sector and Wapda had been assigned
the task.
Wapda conducted the international competitive bidding (ICB) and
received the lowest bid from the Japan-based Marubeni Company. Under the
agreement, the Marubeni Company was also to invest in the project and to this
effect it had arranged a loan from the Japan Bank for International
Cooperation (JBIC).
Wapda was to complete the thermal plant at Chichuki Maliyan with
340 megawatt production in August 2008 and another 160 megawatt by Dec
2008, and it was strong perception that this project would give a massive relief
to the common man and wriggle the country out of load-shedding and power
crisis.
Confirming the shocking development, a senior Wapda official from
Lahore said that the top decision makers in the country have taken a U-turn
and decided that the private sector would complete this project of paramount
importance. “But under the new decision, the project would be inordinately
delayed,” he feared. The price of the project has also increased by Rs 100
million because of the delay, and this a very shocking decision. “The earlier
cost of the project was Rs 2.6 billion.”
In the wake of the decision, Wapda had to stop all the spadework to
initiate the project. “The government has taken the new decision as the Qatar
Investment Authority (QIA) will initiate this project,” the official said.
The Board of Investment (BoI) has managed to bring the Qatar
Investment Authority in the country and persuaded it to invest in this project.
However, sources in the BoI confided to The News that Saifur Rehman, a
close aide to former Prime Minister Nawaz Sharif, was a partner of the QIA
and had 25 per cent equity in it.
The official said that in the last two months the BoI has held about
two meetings with QIA officials and Pakistan has inked an MoU with Qatar to
this effect. “Under the MoU, the Qatar Investment Authority has to come up
with financial close within three months,” the official said.
Asked about the status of the project after the government decided to
withdraw it from Wapda, he said that Wapda was about to start the project
and the Japanese company had been short-listed and its terms and conditions
were also evaluated. But after the new decision, all the activities have been
stopped.
Replying to a question, he said that in case the QIA failed to come up
with financial close within the stipulated time, the project would be further
delayed, escalating the project cost further, and worsening the power crisis.
Khalid Mustafa, The News, June 13, 2007
http://www.thenews.com.pk/top_story_detail.asp?Id=8465
A SIAN D EVELOPMENT B ANK C ONSIDERING 250 M ILLION $

L OAN FOR S MALL H YDRO P ROJECTS IN P AKISTAN
Indeed a very positive development if the terms of this loan finalizes soon.
Pakistan is heading for acute shortage of energy and therefore all measures
which can enhance the country's ability to produce clean energy will be
welcomed by all quarters.
The important question which should be looked is that how this loan
will be distributed. We suggest that small packaged turbines of 10-50 KW to
be assembled or manufactured in Pakistan and these turbines distributed to
Local residents on easy loans. Since the turbines will be providing electricity
for small group of houses therefore transmission expanses will be cut.
This addition of power will not affect the existing shortage of
electricity. Because beneficiaries will be mostly those people who does not
have an electrical connection. But a lager saving will be in the form of forest
wood which is now used for heating and cooking.
September 9, 2007
US A DVISE P AKISTAN T O P URCHASE E LECTRICITY F ROM

C ENTRAL A SIA
The recent story in Daily Dawn reconfirms US advice to Pakistan to purchase
electricity from central Asia.
We are of view that US should be persuaded to provide technical and
financial assistance to manufacture Wind Turbine technology in Pakistan as
well as boilers and turbines manufacturing facility which can burn low quality
coal available from Sind Province.
Self reliance in Energy requirements is a key element for sustainable
economic growth of Pakistan.
28 IPRI Factfile
Pakistan should have a fair treatment to explore all possible energy

resources including nuclear energy for its growing energy demand.
September 9, 2007
E NERGY S TRATEGY
Updated 9th November 2007

Few weeks before when oil started rising we predicted that no need for panic
and the oil will maintain a position between 70-76$/barrel. We were proved to
be wrong.
But not us. Just last months there was not much anxiety all around the
world. But now, what it looks, the world is again heading towards an energy
crisis similar to 1970.
So far the surge in markets always pointed to OPEC which was
blamed for throttling the production valves to regulate the market. Short term
crisis were related to speculations of war and political disturbances in shipping
lanes transporting the fuel. Now the situation is different.
OPEC is helpful more than ever to pump maximum oil it can deliver
but the demand is growing steadily. One reason is the change in life style
which came with the increase of net income in Asian countries due to
economic growth tempting them to spend on luxury transportation and
electronic goods. But, the major source is the rising economic growth of China
and India as well as other emerging markets which need more fossil fuels to
keep their industries running.
The future outlook, therefore, is the worst than expected. There is
panic all over the world to explore renewable energy resources but due to high
demand of machinery the delivery time is quite long.
Pakistan is caught up between a crisis. On one hand it wants to catch
the growth rate at par with the region and on other hand it has already been
facing the acute shortage of energy.
There are many reasons for slow growth in energy sector. But one
simple reason is that many departments are responsible for energy
management in Government. There is Water and Power Ministry, Oil and Gas
Ministry, OGRA, AEDB, NEPRA, PPIB, WAPDA, NTDC, SHYDO and
many more.
To streamline the system, this is suggested that one unified energy
Ministry has to be made responsible for all energy issues and different desks
are made in one roof for developers and end users.
For developers, paper work has to be made simple. The investors
should be offered up front tariff and can only appeal if their real cost is
enhanced by some reason. Presently, before the construction starts, investors
have to go for lengthy processes. The government should invest substantial

amount for wind and solar energy and once the projects are matured then can
privatise.
Updated on 3rd November 2007

ECC on Wednesday approved 5.89 cents as an upfront tariff for Hydel
projects. This is a revolutionary step taken by Pakistan Government to
promote and encourage the investors in Hydel sector. In fact, this is the most
logical and wise step adopted by the government for energy sector. This will
encourage investors to come forward in Hydel sector.
Pakistan is blessed with high mountains covered by glaciers and the
rivers flowing across the country. PPIB, so far, processed 19 Hydel power
projects to produce 4900 MW energy.
Now we request honorable Minister to further persuade all
government agencies to facilitate that these projects can be commissioned
earlier than scheduled time. For this purpose, all red tapes are to be removed
as far as possible. We learnt from reliable sources that Asrit-Kedam 209 MW
power project is moving with record speed and the sponsors, Yunus Brothers,
are highly committed to complete the project by 2011 instead of scheduled
time 2014. RSWI, the consultants, are confident that the project is very
promising and can be completed ahead of schedule.
October was a month to be remembered when world oil prices shot
up at record level and at the end of the month it was staying at 94$ level. It
was almost certain that OGRA will allow the price hike for petrol and diesel
from 1st November. However a cabinet meeting in the chairmanship of Prime
Minister Shaukat Aziz overruled this decision and kept the prices same.
However, furnace prices were raised all time high by Rs 4210 /ton for
domestic market. The price now stands on 34000 Rs./ton.
This price hike can be justified in the light of rising crude oil prices
but for domestic market the fuel tariffs now are not so realistic.
The diesel and furnace prices are now standing at almost same level. A
little intelligent power house manager can start using diesel instead of furnace
which is cleaner and easier to burn or even can mix the diesel with furnace
lowering its viscosity and make it more comfortable to burn.
Those diesel generators, which were running as standby generators
and were less efficient, will be more attractive for end users and the furnace
power plants will be shut down.
For those IPPs which run their plants on furnace, this increase will be
shifted to utility company which is purchasing the power and hence to
WAPDA, which is already deep in trouble.
30 IPRI Factfile
Meantime power shortage in whole country remained forcing the

utility companies for load shedding. Mr. Liaqut Jatoi, Minister for water and
power, called a press conference and expressed his views.
He acknowledged the shortage of 1500 MW which will continue in
next summer also. He told reporters that 13 memorandum of understandings
have been signed to overcome the shortfall of 1500 MW power with foreign
investors and an investment of 200 billion $ will be made in power sector. He
also told that government is allocated 140 billion Rupees for the development
of power sector including Bhasha Dam. He also told that 100 MW electricity
will be imported from Iran.
Presently we have three different critical problems in energy sectors
which all need immediate attention:-
1. Current shortfall in production and availability of no standby
power to meet any emergency.
2. Long term increase of shortfall with increased energy demands.
3. Rising fuel prices making the production cost high.
The projects in pipeline will start commissioning from 2014.
All planning of Hydro and alternate energy is for next five years. So the biggest
question now is what to do for the current situation.
This is itself promising news that in spite of political uncertainty
honorable Minister finds an opportunity to address the energy sector. In our
opinion, situation now is so critical that it needs a diversified approach. We
have to look for all options of existing as well as alternate energy resources.
As earlier been written our existing machines are less efficient. The
end users should be persuaded to replace with more efficient machines. We
have to discourage use of larger cars and should develop mass transit systems
in mega cities to avoid use of one car/person.
November 9, 2007
http://www.energy.com.pk/strategy.htm
P AKISTAN U RGED TO I MPORT 4,000MW FROM CAR S

The World Bank has advised Pakistan to start working on import of 4,000MW
of cheap electricity from Central Asian states, besides working on domestic
sources to overcome electricity shortage owing to a 43 per cent expected
increase in demand to 20,000MW by 2010.
The World Bank estimates that Pakistan’s peak demand now exceeds
14,000MW and the present installed capacity of 19,500MW has become
inadequate on account of the wide variations in the water availability, which
greatly reduces the firm capacity available.
“Electricity demand at the generation level is forecast to grow at 7-8
per cent per year to about 20,000MW by fiscal year 2010 and 44,700MW by
2020,” a government official told Dawn quoting fresh World Bank estimates.
The country that had a comfortable supply position during the last
several years has already started experiencing shortages during peak periods
and “it is anticipated that if no new capacity is added, firm power shortage
would amount to 5,500MW by fiscal year 2010.”
The World Bank understanding that besides improving supply
efficiency, demand management, addition of new hydro and thermal power
stations, Pakistan should expedite importing 1,000MW from Tajikistan and
Kyrgyz Republic in the first phase and then increase such imports to 4,000MW
in the second phase.
These imports, the World Bank believes, have two major advantages.
First, the cost of supply from Sangtuda, Rogun, Talimardjan and Kambarata
power stations in the CARs would range between 2.26 cents to 3.75 cents per
unit compared with existing average generation cost in Pakistan at 5.6 cents
per unit.
Pakistan is now entering into contracts with independent power
producers (IPPs) for thermal power generation at a tariff as high as 14 cents
per unit.
Second, the attractive feature of the imports form CARs is that
Pakistan’s peak demand occurs in summer, when the Central Asian power
systems have large surpluses from their hydroelectric generation stations.
The WB says that international financial institutions like Asian
Development Bank, Islamic Development Bank and USAID and private
sector companies like AES Corporation of USA and RAO UES of Russia have
already indicated to be part of the project once feasibility studies currently
underway are completed.
According to the government of Pakistan estimates, the country is
most likely to face a major energy crisis in natural gas, power and oil in the
next three to four years that could choke the economic growth for many years
to come.
Pakistan’s total energy requirement would increase by about 48 per
cent to 80 million tons of oil equivalent (MTOE) in 2010 from about 54
MTOE currently, but major initiatives of meeting this gap are far from turning
into reality. Major shortfall is expected in the natural gas supplies, the sources
said.
According to official energy demand forecast the demand for natural
gas, having about 50 per cent share in the country’s energy consumption,
would increase by 44 per cent to 39 MTOE from 27 MTOE currently.
be little over 5,250MW by 2010, a little lower than World Bank’s estimates of
5,500MW. Simultaneously, oil demand would also increase by over 23 per cent
to about 21 million tons in 2010 from the current demand of 16.8 million tons.
and furnace oil imports, sources said.
32 IPRI Factfile
Since the gas shortfalls were expected to be much higher, the country
would need to enhance its dependence on imported oil, thus increasing
pressure on foreign exchange situation, more so as international market
continues to go up.
Planning Commission sources said the government had planned to
about 4,860MW is to be based on natural gas, accounting for 61 per cent of
capacity expansion.
However, the gas-based power expansion of about 4,860MW would
remain in doubt since these estimates were based on gas import options for
completion in 2010, 2015 and 2020. None of these projects could achieve
these deadlines.
According to World Bank estimates, the indigenous gas supply would
fall from 32.6 MTOE in 2010 to 20.7 MTOE in 2025 while the gas supply-
demand gap would rapidly increase as demand is expected to grow
continuously, quadrupling in 2025.
Khaleeq Kiani, Dawn, November 17, 2007
F UEL S HORTAGE M AY W ORSEN P OWER S ITUATION

The electricity shortage that currently fluctuates between 1,000 and 3,000
megawatts is likely to worsen in a few days because of problems of
transporting furnace oil and diesel through the railway system and other
means.
Petroleum Ministry sources told Dawn that Pakistan State Oil (PSO)
has sought federal government’s permission to invoke force majeure clauses of
its fuel supply agreements (FSAs) with independent power producers (IPPs)
because of its inability to meet fuel requirements because damage caused to
railway tracks and fuel-carrying bogies was much more than originally believed.
Force majeure clauses in FSAs and power purchase agreements allow
suppliers to announce in advance that they would not meet contractual
obligations because of natural calamities or conditions beyond their control.
“Availability is not a problem, all products are now in abundance but
storage and movement (of oil products) is a serious dilemma,” said a senior
official.
PSO sources also confirmed that force majeure notices had been
communicated to all independent power producers as a protective measure
because a default in supply contract attracts large financial penalties that could
also be a problem for the government which guaranteed these agreements.
These notices would enable IPPs to serve similar notices to power companies,
but hopefully the situation would improve a crisis situation averted. The
sources said that the PSO supplied more than 40,000 tons of fuel to power
companies every fortnight through train but problems were also being faced in
the pipeline system. The problem was compounded by non-availability of
tanker lorries, the PSO sources said, adding the force majeure notices would
avoid imposition of financial penalties.
The sources said that the PSO had written to the government that the
railway authorities had informed them that they would not be in a position to
repair the damaged infrastructure in less than 20 days, hence it would not be
possible for the PSO to meet its contractual obligations.
The sources, however, said the secretary petroleum was working in
coordination with the ministry of defence to make alternate arrangements,
including engaging the National Logistics Cell and even the private sector
because of the limited capacity of NLC.
The sources said prolonged disruption in the movement of fuel oil
could also lead to shortage of other products because of 20-25 per cent
reduction in capacity utilisation of refineries.
Since the uplift of fuel oil and diesel stocks and their transportation
emerged as the real problem, the storage capacity of refineries was filled to the
brim. As a result, they had reduced their refining capacity that could eventually
lead to shortages of products in the market.
Munawar A. Baseer, managing director of Pakistan Electric Power
Company (Pepco) which looks after corporate generation and distribution
companies formerly run by the Wapda, told Dawn that fuel shortage was a
concern but not a crisis.
He said that public sector generation companies had enough fuel for
about 20 days.
Khaleeq Kiani, Dawn, January 01, 2008
E NERGY C RISIS : S ERIOUS AND W ORSENING

Serious energy shortage, massive load-shedding and lowest ever strategic oil
reserves are emerging as major risk to the economy.
The situation, it appears, will not be any better in the days ahead given
the political uncertainty and policy planning failure over the last few years.
Combined with multi-layered risks including current account deficit,
the critical shortage of energy — an ingredient that fuels the economic growth
— has the potential to choke economic growth.
The shortfall in electricity generation did not emerge suddenly but was
developing over the years as the development of cheap and indigenous energy
sources was discouraged for lack of any vision. Sponsors of hydropower
producers who were offered a tariff of 4.7 cents per unit under the 1997 policy
34 IPRI Factfile
were practically blocked from developing their plants at this tariff rate and
offered a much lower rate of 3.3 cents per unit in 1999.
Same happened with development of coal resources. A Chinese firm
that had agreed to set up a 600MW project at Thar for 5.79 cents per unit was
forced to quit when the authorities refused to offer a tariff of more than 5.39
cents per unit. As a result, no power project could be set up in the last eight
years. The regime never tired of criticising political governments for signing
costly energy contracts (at the average rate of 5.7 cents per unit). But it allowed
signing of contracts for thermal power project at a much higher tariff of up to
15 cents per unit, although none of these projects would be available to the
economy in the next 6-12 months.
Likewise, the recent revelation of the country’s strategic oil reserves at
a precarious level clearly exposed the government’s lack of vigilance and
failure of energy companies to meet their contractual obligations. The strategic
oil reserves for defence had also been consumed to meet shortage and thus the
country’s security has been exposed to great risks.
Under the fuel supply and power purchase agreements, the oil
marketing firms and power generation companies - whether in the public or in
the private sector – are required to maintain a minimum of 21 days of their
fuel requirements. Non-compliance of such contractual obligations is subject
to heavy penalties under the law. The government, too, is required under the
standard operating procedures defined in the official Blue Book to ensure that
it has oil stocks for at least 21 days of consumption to meet any eventuality,
either a natural calamity or war or any such event.
The imperative of maintaining stocks for 21 days was highlighted by
the blocking of communication routes during the violent protests following
the tragic killing of former Prime Minister Benazir Bhutto. The entire episode
led to disruption of fuel supply chain that included railway, pipeline and road
transport. In varying degrees, it came to light that neither the independent
power producers, nor the oil marketing companies including those in the
public sector had maintained sufficient stocks as required under the law.
The result would be more load shedding in the days ahead. The
export growth that is already stagnating would be hit if enough energy – gas
and electricity – is not ensured to the industrial sector.
The power shortage that had officially been estimated to remain in the
range of 1000-2000MW during the current year has already touched 3600 MW.
The economy is being run at almost 30 per cent energy shortage, which could
worsen if oil supplies continue to remain short or the current disruption of oil
transportation prolongs.
Wapda estimates that the country could face a power shortage of
about 5,500MW by 2010. Overall, Pakistan’s total energy need is expected to
be around 80 million tons of oil equivalents (MTOE) in 2010, up by about 50
per cent from the current year’s 54 MTOE. And since at least four out of five
major initiatives, originally planned for meeting this demand, are uncertain at
present or significantly behind schedule, the shortage estimate could be
anybody’s guess.
Even the closure of business after sunset and reduction in street
lightening did not get the desired results, leading to a massive load shedding of
almost daily four hours across the country. Most of the industrial and
commercial sector has also been deprived of the natural gas since the advent
of winter. Energy shortage is severe and widespread in almost all areas, while
different sectors contribute to each other’s problems. “Natural gas, power, and
oil shortages were all posing risks to the economic growth in medium to long-
term period,” a government official said.
A major shortfall is expected in natural gas supplies. According to an
official energy demand forecast, the demand for natural gas, having about 50
per cent share in the country’s energy consumption, would increase by 44 per
cent to 39MTOE from 27MTOE currently. The government had planned to
about 4,860MW was to be based on natural gas, accounting for 61 per cent of
the capacity expansion. However, the gas-based power expansion of about
4,860MW would remain in doubt since these estimates are based on three gas
import options for completion in 2010, 2015 and 2020.
A major part of about 4,860 gas-based plants may not be available and
the difference may be met through other costly options. Even if the physical
work is started today, it will take at least seven years to complete a pipeline
project and it was not clear if construction of Iran to Pakistan pipeline project
could be taken in hand in the near future.
be little over 5,500MW by 2010, said a Planning Commission official, adding
that the oil demand would also increase by over 23 per cent to about 21
million tons in 2010 from the current 16.8 million tons.
and furnace oil imports. Since gas shortfalls are expected to be much higher,
the country would need to enhance its dependence on imported oil, increasing
pressure on foreign exchange balances.
Khaleeq Kiani, Dawn, January 07, 2008
E NERGY C RISIS IN P AKISTAN ARE G ROWING R APIDLY

President recently claimed that construction would soon begin in Karachi on
one of the tallest buildings in the world. The project, according to the
president, would show the world that Pakistan is a “progressive and dynamic
36 IPRI Factfile
country and we are second to none”. But unless Pakistan can light that
building, President claims will look silly.
Robust economic growth-rates over the past several years
have encouraged Pakistan to ignore fundamental weaknesses in the economy.
Yes, Pakistan’s economy is growing; that’s the good news. The bad
news is that with this growth comes higher energy consumption and greater
pressure on the country’s energy resources. Unless Pakistanis — the
government, but individual citizens as well — act now, the country’s future
will indeed be dark, in more ways than one.
At present, demand for energy exceeds supply. Power outages
and planned power cuts (euphemistically termed “load-shedding”) are, for
many, an everyday occurrence. In addition to their economic costs, energy
shortages foster political instability. Last summer angry public protests in
Karachi and riots in Liaquatabad demonstrated how close many Pakistanis are
to reaching the limits of their patience. A widespread power outage affecting
much of the country last September triggered panicky rumours of a coup.
Earlier this year, the opposition and the ruling parties staged nearly
simultaneous protest walkouts from the Senate following a disagreement over
high domestic oil prices. This unrest may be only a foretaste of things to come.
Absent drastic action, Pakistan’s energy situation is expected to get far worse
in the years ahead.
According to the government’s own figures, by 2015, eight
short years from now, energy demand in Pakistan will be nearly 22 percent
greater than projected supply. By 2030, this energy shortfall will be 64 percent.
What do these figures mean for Pakistanis? Higher
prices, fewer jobs in a slowed economy, reduced opportunities, less comfort,
heightened political turmoil.
A Pakistan with serious energy shortages will not be a pleasant
Pakistan.
Today, oil and natural gas supply nearly 80 percent of Pakistan’s
energy needs. However, the consumption of those energy sources vastly
exceeds the indigenous supply. For instance, Pakistan currently produces less
than 20 percent of the oil it consumes. This fosters a dependency on imported
oil that places considerable strain on the country’s finances. While the present
situation with respect to natural gas production is not nearly as critical,
Pakistan’s projected natural gas needs are expected almost to double (from
2004 levels) by 2010.
On the other hand, hydropower and coal are perhaps
under-utilised today, as Pakistan has ample potential supplies of both, at a time
when these resources provide for relatively little of Pakistan’s
energy needs. Pakistan’s proven coal reserves are the world’s sixth largest,
and the government intends to increase the share of coal in the overall energy
mix from 7 to 18 percent by 2018 — a course that may make sense from an
energy standpoint, but which carries troubling environmental implications.
Meanwhile, provincial rivalries and widespread public
opposition have significantly slowed the government’s plans to build dams
capable of generating electricity. Many Pakistanis argue that large
hydroelectric projects should be a last resort, after low-cost energy
conservation measures have been fully utilised.
Nuclear power at this point accounts for barely one percent
of Pakistan’s energy consumption. The government has announced plans to
develop a generating capability of 8,800 megawatts (MW) of nuclear energy by
2020, compared to the country’s current output of less than 450 MW. But this
goal is unlikely to be reached unless Islamabad is able to persuade the United
States and other western countries to help it develop civilian nuclear
technology, an idea certain to meet with resistance in the West.
Pakistan’s renewable energy potential — hydro, wind, and solar — is
substantial, although presently this potential remains largely untapped.
Escalating petroleum prices in recent years have given Pakistan an
additional incentive to invest in renewable energy technologies. In 2003, the
government ambitiously declared that by 2015, 10 percent of the country’s
total energy supply would come from renewable energy sources, and
established the Alternative Energy Development Board to coordinate
renewable energy promotion. Modest steps in the direction of greater reliance
on renewable energy have already been taken.
Nonetheless, renewable energy labours under severe handicaps
in competing with conventional energy — hidden subsidies that allow for
lower conventional energy generation costs, for example, and policies that
permit conventional energy to disregard the costs of the pollution it creates
when pricing power. Unless renewable energy is given a level playing field, a
major expansion of renewable energy generation is unlikely, and the
government’s goal of 10 percent by 2015 will not be met.
Rural areas across India, Bangladesh, Sri Lanka, and Nepal
have all implemented successful clean and renewable energy initiatives.
Bangladesh, for instance, has experienced considerable success with solar
home systems financed through micro-financing. Pakistan’s neighbours have
something to teach Pakistan, if only it will listen.
Pakistan’s minister for petroleum and natural resources has identified
energy as the most important input for the country’s economic development.
The uninterrupted supply of energy to fuel the nation’s economy, he has
declared, should be the highest priority for the country’s economic managers.
Yet the record of past governments does not induce
confidence. It's said by one of Pakistan’s most distinguished economic
analysts, has written of “a colossal failure of public policy” over six decades,
which has left the country with “weak institutions, inappropriate pricing
38 IPRI Factfile
policies and insufficient public-sector investment that [has] contributed to

what appears to be an inexorable march towards another crisis”. Pakistan
cannot afford a repetition of this sorry history.
The good news is that Pakistanis are not being asked to find
a cure for cancer, or to discover entirely new methods or technologies in order
to meet their energy needs down the road. There already exists widespread
agreement on at least the broad outlines of an energy strategy for Pakistan.
Pakistan’s energy managers know what needs to be done.
But solemn promises and soaring rhetoric will not do the
job. Preparing for Pakistan’s energy needs over the next quarter century will
require long-term vision, a national commitment widely shared among the
country’s political and business leaders, inspired leadership sustained from
one government to the next, and most of all, political will to make and carry
out difficult choices.
Pakistan — the country, not just the government of the day — needs
to decide that muddling through is not enough. Pakistan,
as a country, has to get serious about creating an energy strategy, and then —
and this is the hard part — about implementing it.
Pakistan will not find itself alone in this task. Islamabad’s
friends around the world believe that it is in their own national interests for
Pakistan to succeed — which means, among other things, that Pakistan
succeed in its quest for energy security. At the end of the day, Pakistanis
themselves must solve the problem of energy insecurity, but the outside world
— both the private and the public sectors — can and will help.
Energy matters for Pakistan. If Pakistan is to succeed in its ambitious
plans for economic development, if it is to raise the grossly inadequate living
standards of its people, if it is to achieve the economic growth necessary to
ensure political stability, if it is to begin to address the many environmental
problems that up to now have been largely ignored, and which have a hugely
adverse impact on the daily lives of Pakistani citizens, if it is to live in peace
with its neighbours, several of whom are directly impacted by Pakistani
decision-making in the energy sector, if Pakistan is to move towards all these
goals, Pakistanis must get serious about energy.
Emma-Gill, January 24, 2008
http://www.articlealley.com/article_460564_22.html
E FFICIENT H OUSEHOLD A PPLIANCES TO M ITIGATE E NERGY

C RISIS
The federal government has entrusted Engineering Development Board
(EDB) the task of adopting strategies in collaboration with relevant private
sector industries to enhance the efficiencies of different energy consuming

household products being produced in the country.
As per the government’s initiatives to overcome the energy crisis in
the country, the EDB held separate meetings on Saturday with leading local
manufacturers of fans and pumps and finalised a strategy which would help
enhance the efficiency of these domestic products. The increased efficiency
will result not only in reducing consumption of energy and help conserve
energy.
The discussions focused on different aspects of the products
including general design, quality of input material and the relevant
benchmarks. EDB General Manager Zahid Yaqub, who chaired the meeting,
informed the private sector representatives about the initiatives being taken by
the government to overcome the energy crisis. One of the strategies adopted is
to enhance the efficiency of different energy consuming household products.
The meeting was informed that the electricity consumption during
2005-06 was 67,603GWh, out of which 45.4 per cent was consumed by the
domestic sector. It was estimated that every household in Pakistan has a
minimum of two to three fans and based on this figure, the total strength of
fans was over 30 million.
The President of Fan Manufacturers Association (FMA) called for
reducing the rate of sales tax on various components of fans. Currently, the
country has four leading manufacturers of fans as compared to nearly 200
small units manufacturing fans in different parts of the country.
The FMA president alleged that the small units were using
substandard components in order to keep the price low and ignoring energy
conservation.
According to the FMA statistics, the industry was manufacturing five
million fans every year, out of which one million fans were exported fetching
$30 million. The FMA also called for banning export of copper, the main
component used in fan manufacturing.
The meeting on pumps was told that the enhancement of efficiency of
motors used in domestic industrial and agricultural sectors can save 3 to 5 per
cent of the total electricity consumption. It was felt that quality of copper wire
and silicon steel being used and manufacturing of motors and pumps should
be increased by reviewing the standards developed by the PSQCA.
The federal government has also decided to introduce standards for
the manufacturing of gas geysers in order to enhance their efficiency and save
energy.
The Pakistan Standards and Quality Control Authority (PSQCA) has
drafted the required standards for the production of gas geysers. The standards
were being sent to all chambers of commerce and industry and manufacturers
for their views before finalisation.
40 IPRI Factfile
The decision to this effect was taken at a meeting chaired by EDB

General Manager Zahid J. Yaqub and attended by leading manufacturers of
geysers, representatives of government agencies and senior officials of
SNGPL.
The meeting was informed that the energy efficiency of local geysers
was much lower than the world standards. Therefore, research and
development (R&D) was necessary to achieve global standard.
The industry emphasised the need of duty-free import of various
components of instant water heaters in order to introduce quality products in
the market. Some manufacturers showed their willingness to produce high
quality products, if investment on R&D was made by the government.
ENERCON Managing Director Fareed Ullah Khan informed the
meeting that the government was ready to accept any practical proposal from
private sector for energy conservation.
Addressing the meeting, the EDB general manager said that the
government was undertaking initiative to minimise the magnitude of the
energy crisis. One of the strategies adopted is to enhance the efficiencies of the
different energy consuming household products. He added that the crisis
should be converted into an opportunity to introduce high quality product in
the market.
Another area, which needs to be looked into, is the phasing out of
inefficient incandescent bulbs in favour of more energy-efficient compact
fluorescent lamps (CFLs) that reduce greenhouse gas emissions and cut
household energy costs.
While CFLs are more expensive to buy than incandescent bulbs, they
pay for themselves in lower power bills within a year. The switch to CFLs will
result in household lighting costs falling by as much as 80 per cent, and the
country’s annual greenhouse gas (GHG) emissions falling 2 million metric
tons starting in 2010.
Additionally, national electricity demand is expected to fall by 2,000
megawatts, or the equivalent of electricity generated by six power plants.
Amin Ahmed, Dawn, February 10, 2008
C OPING WITH THE E NERGY C RISIS

One of the major problems facing the new government, the energy crisis,
is intense, costly and multi-dimensional. The infuriating electricity and gas
disruptions and soaring fuel prices in turn pushing the cost of living have
made life difficult for people. The even before it took office the new
government was greeted with two jumps in fuel prices, accounting for a
15% rise in two weeks. Meanwhile, crude oil prices have been registering
all-time-highs, shooting 40% in the past year. The undeniable reality is

that that this global spike will somehow have to be accommodated in
energy prices in Pakistan.
There is no quick solution to electricity shortage and the trend of
surging prices is irreversible. There is very little the new government can
do on this in the immediate term. At best, the problem can be prevented
from aggravating until a sustainable solution is struck. Tough decisions
will have to be made, and executed with commitment.
The starting point of any remedial efforts should be an
acknowledgement of the fact that the crisis is a self-inflicted one. It
cannot be denied that something has been wrong down the line that
caused this crisis. The country has nearly gone energy bankrupt while a
total disaster appears to be round the corner unless pragmatism is shown.
It is also important that lessons be learnt from the past mistakes on part
of relevant circles. The crisis is still addressable as long as there is due
vision and devotion.
The golden age for energy in Pakistan has been 1960s and most of
the 1970s, that is when Tarbela and Mangla dams were put into operation
and other dams, including Kalabagh, were actively pursued. In subsequent
years, action in the field of energy has been utterly recklessness. The
prevalent crisis is a consequence of imprudent energy policies over the last
three decades.
One of the major limitations that have hindered energy prosperity
in the country is short-sightedness. There has not been a meaningful and
coherent energy policy in place over this period. The approach has been
"project-oriented," rather than "goal-oriented." Almost every regime has
dealt with energy on an ad hoc basis. Long-term and sustainable planning
of energy have been an alien concept. The reason is fairly simple; energy
projects usually require huge investments and commitment, making them
undesirable to any regime. The attitude of delaying new projects, as far as
possible, has been the common practice and is in fact the recipe of the
present crises. In doing so, when things start getting out of control,
haphazard and quick-fix measures are sought. A typical example is the
Independent Power Producers (IPPs) saga of the 1990s. In an attempt to
avert an approaching energy crisis, as a result of negligible capacity
addition during the 1980s and the early 1990s, the regime in 1993-94
decided to go for thermal generation through the IPPs. Undoubtedly, the
IPPs provided a very healthy contribution at the supply end, enhancing
power generation capacity by more than 5000MW. Nevertheless, this
power addition cost the country a fortune – apart from the controversial
tariff structure, the move was against the spirit of energy sustainability and
security for the country. The fact that the IPPs were set up at the terms of
the investors suggest that it was a move made in panic.
42 IPRI Factfile
The last few years provide a perfect example of failure to make a

timely response to the growing energy needs. A threefold increase in
energy demand over the last two decades has been responded to with an
ill-proportioned increment at the supply end. Consequently, with the
advent of 2008 the gap between demand and supply grew to 4,500MW
indicating a 40% deficit of electricity. The prevalent energy crisis has not
appeared overnight -- the omens were evident for a number of years but
the authorities failed to react in time. Senior WAPDA officials claim that
in 2002 the government was officially warned about the approaching
electricity crisis and was asked to take immediate measures to enhance
generation capacity. The timely warning failed to receive any appreciation.
The attitude of the relevant authorities has thus indirectly contributed to
the growth of the dire crisis. Another example worth quoting here is that
of the 969MW Neelam-Jehlum hydroelectric project. It was to be
constructed in 2003 at a cost of $1.5 billion. It got abandoned until the
present power crises intensified towards the end of 2007. The revised
estimate is around $2.25 billion. The delay is costing the country a fortune
– an extra $750 million in terms of project cost, apart from enormous
monetary dents inflicted by the five-year delay. It is also noteworthy that
WAPDA has traditionally pursued the major projects of national interest
but failed to get the due positive response from the policy- and decision-
makers. Interestingly, WAPDA plays the role of a scapegoat, because the
common man blames WAPDA for his sufferings.
It is also important to plant relevant and qualified people at the
key policy and decision making positions. Quite often, these positions are
offered to utterly irrelevant, ill-qualified and incompetent people. The
track record suggests that energy offices are amongst the most coveted
ones in any regime, simply because they are considered to be the most
lucrative ones. There are examples when undergraduate and utterly
irrelevant people have been appointed to run energy offices. There are
also cases when the crucial positions have been used as incentives during
political bargaining. The unhealthy attitude towards sensitive energy
positions is enough to explain how the field of energy has been
traditionally toyed with.
Another aspect of the bankrupt policies is politicisation of
projects of national interest. The paramount example is that of Kalabagh
Dam. It has been politicised to such an extent that its orchestration now
appears to be next to impossible. Evidences suggest that the issue has
been used to serve the vested interest of regimes and certain political and
ethnical forces. With the emerging post-lection sense of national
reconciliation on the political arena, it is expected that such projects
would be looked into with cool heads. It is time to move on. The
technical issues, if there be any, have to be addressed on the drawing
board, rather in processions. It has to be realised that the delay in project

has not only made the country suffer but also people that come from all
provinces.
In order to tackle the existing crisis and ensure a prosperous
energy future, the backbone of the future energy policies would have to be
reliance on domestic resources (hydropower, coal and solar and wind
energy) and energy conservation. Decisions on energy projects should
revolve around national interest rather than naïve political and personal
gains. Energy offices should be run by qualified, committed and deserving
people equipped with due mandate. Relevant ministries and departments
should also be overhauled.
The News, April 17, 2008
http://www.thenews.com.pk/daily_detail.asp?id=107244
I RANIAN , P AKISTANI PRESIDENTS RESOLVE PIPLINE ISSUES
Iranian President Mahmoud Ahmadinejad and his Pakistani counterpart

Pervez Musharraf on Monday cleared all hurdles over a gas pipeline to India
and agreed to sign a deal soon, state media said. Ahmadinejad discussed the
7.5-billion-dollar project to transport Iranian gas across the subcontinent while
making a short stopover in Islamabad on the first leg of a whirlwind tour of
South Asia. “The two leaders expressed satisfaction over the resolution of all
issues that had delayed a final agreement,” Foreign Minister Shah Mahmood
Qureshi was quoted as saying by the official Associated Press of Pakistan.
Qureshi added that the Iranian and Pakistani presidents had tasked their
foreign ministers to agree on a “mutually convenient date for signing the
agreement” after their hour-long talks in Islamabad. Iran also agreed to
provide 1100 MW of electricity to Pakistan to help it overcome a recent power
shortage, particularly in areas adjoining Iran, the news agency said. Musharraf
and Ahmadinejad also discussed the situation in neighbouring Afghanistan,
which is battling a Taliban insurgency, and “stressed that peace and stability
was vital for the region”, APP reported. Ahmadinejad later held talks with new
prime minister Yousaf Raza Gilani, his first meeting with an official from a
new government that took power last month after defeating Musharraf's allies
in elections. The Iranian president arrived on Monday morning at Chaklala
Airbase in Rawalpindi, a garrison city adjoining Islamabad, and was greeted by
an air force honour guard and received bouquets from a young boy and girl.
He is on his way to Sri Lanka later Monday and will also visit India in coming
days.
Dawn, April 28, 2008
http://www.dawn.com/2008/04/28/welcome.htm
44 IPRI Factfile
T IES WITH I RAN
The decision reached in Islamabad on Monday between the visiting Iranian

President Mahmoud Ahmadinejad and President Musharraf to sign the accord
on Iran-Pakistan-India (IPI) gas pipeline augurs well for all concerned. The
longstanding project delayed by reservations expressed by India and disputes
over tariff and transit fees can now finally take off the ground. Pakistan’s rising
energy needs face a shortage, and in addition to future gas supply, Iran’s offer
to wire in 1,100 MW of electricity is godsend. At Pakistan’s initiative, another
trilateral deal envisaging the supply of gas to China through this country is also
a good omen for regional cooperation that will work to everyone’s benefit. On
the political front, the pumping of Iranian gas into Pakistan, India and China
at a time when the US opposes such dealings with Iran’s Islamic regime is
significant. It is an assertion of independence in international relations on the
part of the countries concerned and their refusal to be dictated to by
Washington, because it arguably works against their own economic and
diplomatic interests. The accord reached with Iran also dispels the impression
that Pakistan’s earlier signing of another gas supply deal with Turkmenistan via
Afghanistan was an alternative to the IPI deal.
All this has profound implications for Pakistan and South Asia. Iran is
an important neighbour with which the people of the subcontinent have
enjoyed historical relations. It is a major regional player in the bordering
Middle East commanding a naval presence in the strategic Strait of Hormuz
from where the bulk of the world’s oil passes. On the other side of the fence,
even the US, despite all its opposition to Tehran’s Islamic regime and its
nuclear programme, cannot deny the importance of engaging Iran if it wants
to cool off tensions in Iraq. It is a measure of the failure of American foreign
policy that Russia and China should continue to carry out their dealings with
Iran, including in the controversial nuclear energy sector as far as Moscow is
concerned, and India should snub Washington’s suggestion, as it recently did,
to ask Iran to roll back its nuclear programme. Tehran has insisted all along
that its programme is for peaceful purposes. President Musharraf’s reiteration
of support on the subject to his Iranian counterpart is reassuring.
Recent developments taking place in the region whereby American
efforts to diplomatically isolate Iran have been snubbed should be seen in the
context of growing interdependence of countries upon one another and not as
being geared towards furthering the imperatives of a unipolar world — as
Washington wishes to see it. All this means that there will be quite a bit of
catching up to do for the post-Bush American administration if it wants to
take the rest of the world along on many global issues.
Dawn, April 30, 2008
http://www.dawn.com/2008/04/30/ed.htm
P OWER C RISIS & A LTERNATE E NERGY T ECHNOLOGY

The Energy Minister’s statement that country will have to face the current
energy crisis for next three years shows that he is unable to alleviate the misery
of average Pakistani family and expects them to conduct daily routine chores
in extreme summer heat without eight to sixteen hours of electricity. It brings
us to : 1) Energy Minister has failed to come up with a solution to end energy
crisis including nationalization of energy sector and adoption of alternate
energy. 2) Which law permits country’s rulers to enjoy uninterrupted supply of
electricity while the public who they serve suffers due to load shedding for no
fault of their own?
Can PM justify uninterrupted supply of electricity in VIP pockets
across the country while average Pakistanis face unending power rationing?
Similarly, will the rulers clarify for the ordinary people which law allows
backup generators for hundreds and thousands of such VIPs nationwide
whose number is growing by the hour? Shouldn’t the country’s law lords be
taking suo moto notices to end generator culture by unveiling number of
generators being used for the VIPs, how much they cost to the national
exchequer annually and which law authorizes the procurement, maintenance
and fueling. There is no provision in country’s laws that authorize spending
and regularization of billions of tax-rupees being wasted on the procurement,
running and maintenance of these illegal generators.
It is hoped concerned including Public Accounts Committee, citizen
watch groups, legal fraternity will help country’s courts and PM to end wastage
of tax dollars amidst reports that current 522 billion fiscal deficit will climb to
957 billion by the end of fiscal year 2007/8 and an another impending fuel
prices increase before June 30. Thereby rendering immediate borrowing of
some three billion US dollar loan to sustain country’s (failing) economy. These
figures, energy minister’s statement of requiring three-year gestation period for
permanently ending long hours of load shedding and instead calling for
adoption of energy conservation measures mandate PMs intervention to end
the misery of an average Pakistani who has been forced to face summer heat
and humidity for no fault of his own and pay for national policy failure and
corruption.
PM to show genuine support for people’s plight and as part of
austerity drive should ordering following steps to end corruption in electricity
and gas departments: 1) Inclusion of all VIP areas across the country including
Islamabad into the current load shedding schedule. 2) Across the board
removal of generators and air-conditioning/heating systems from govt. offices
and residences to end VIP culture and save energy consumption. 3) Withdraw
subsidized/free electricity/gas for public servants, office holders and govt.
departments because it encourages waste and negates basic spirit of country’s
46 IPRI Factfile
law. Otherwise, also lawmakers and govt. employees as public servants cannot
have free gas and electricity paid by tax money, which is not extended to the
masses. 4) The energy consumption of country’s domestic sector is less than
total consumption of free electricity given to govt. sector. Therefore, PM
should direct energy minister to save 500 MW by withdrawing free electricity
from VIPs instead of forcing load shedding at grassroots. In fact the national
leadership to set a personal example should share equal hours of load shedding
if not more.
Energy Minister in his statement on the floor of the house said that
50/100 MW of electricity will be generated from wind turbines. The amount
reflects PPPP’s flawed energy policy stressing on long and midterm plans
thereby failing to provide immediate relief to masses. PM should issue
immediate directions to incorporate feasible alternate energy technology based
on alternate energy mapping for following reasons: 1) it can provide quick and
sustainable solution for domestic sector that consumes less than 13% of total
generated electricity. 2) In- step with international policy replace 20-25 percent
of fossil fuel based current energy generation with alternate energy. 3) Cut
fossil fuel imports to reduce foreign currency expenditure. 4) the ‘plug and
play’ and main grid compatibility of these alternate energy options can alleviate
misery of masses suffering the heat at grassroots due to 8/16 hour protracted
load shedding schedules.
Therefore, it is need of the hour to permanently shift country’s
domestic and agriculture sectors to alternate energy to permanently end load
shedding, reduce electricity bills and cut costs on import of ever increasing fuel
prices. In this regard, state of the art affordable wind turbines, solar panels,
photovoltaic panels can play an important role to help realize the objectives: 1)
The ‘plug and play’ and ‘grid ready’ alternate energy technology can bring
immediate relief at grassroots and end three year waiting period. 2) These
alternate energy solutions are cheaper because: (a) Due to their proximity to
consumers it reduces line losses, which in turn reduces energy cost. For
example, the alternate energy helps cut line losses internationally accepted
standards of 5-7% against Pakistan’s reported line losses exceeding 45 percent
of total production, (independent observers put at 65%), which in turn forces
per unit electricity prices increase to recover cost of lines losses and thefts.(b)
It will allow energy generation at districts, tehsils and individual level, which in
turn will help end corruption at all levels and cut over head costs. 3). Cheaper
energy will promote small/medium industrial and manufacturing setups with
multiple advantages including generation/sustenance of millions of jobs. 4)
Cheaper sustainable alternate energy solutions will support and sustain
country’s agri-sector offering critical advantages including produce increase
and increasing employment opportunities. 5) Reduce energy related disputes
between federation and provinces. The fact of the matter is alternate energy as
highlighted in my article ‘time for nationalized energy sector’,
http://pakobserver.net/200804/17/Articles03.asp is a cheaper and with

50,000 MW growth potential is the sustainable way forward to end load
shedding, provide relief at grassroots and meet international standards of
‘greener earth’ as part of cleaner global environment. However, it is the
mindset than actual challenges in energy field that needs to be addressed as
highlighted in my article ‘energy crisis and corruption nexus’ dated 7 Jan.
http://www.pakobserver.net/200801/07/Articles04.asp. PM need to help end
corruption and stakes blocking adoption of alternate energy to provide relief
to masses, uplift agri-sector and facilitate country’s economic progress.
In this regard Nawaz Sharif can play an important role by promoting adoption
of alternate energy in Punjab. The model in turn can be copied by the rest of
the country to provide relief to masses, sustain and generate growth and jobs
in country’s agri-sector. In short 4200 MW can be generated by 1600 wind
turbines with each generating of 3 MWs. The shift to alternate energy can help
Pakistan save 300 billion rupees (4.6 billion dollars) being paid in annual
subsidies to energy companies at the rate of 25 billion rupees per month. The
purchase of 1600 wind turbines should cost around 0.192 billion dollars (1600
x $1,20,000 per piece) which is not only fraction of 4.6 billion dollars being
currently paid under subsidy head but will also cut expenditure on import of
costly furnace oil and ease pressure on foreign reserves etc. Logically, the
adoption of alternate energy technology should reduce per unit cost with every
passing year. All this makes sense in wake of growing oil prices.
Finally, it is need of the hour to provide relief at grassroots by
incorporating available alternate energy technologies in national energy policy.
It will help agri-sector and the industrial sector can be facilitated to adopt
alternate energy technology. It will help reduce expenditure on fuel imports
and foreign reserve.
The nationalization of energy sector and adoption of alternation
energy technology can go hand in hand with already approved long and
medium term policies and projects based on traditional resources of energy
generation.
Rizwan Ghani, Pakistan Observer, May 3, 2008
http://pakobserver.net/200805/03/Articles04.asp
G OVT C ALLS IPP S M EETING TO T ACKLE P OWER C RISIS

The coalition government has called a high level meeting of chief executives of
all Independent Power Producers (IPPs) to seek their assistance in tackling the
issue of power shortages prevailing in the country.
The meeting will be held on Friday (today) at Pakistan Private Power
Infrastructure Board (PPIB) and would be chaired by Federal Minister for
Water and Power, Raja Pervez Ashraf. Water and Power Development
48 IPRI Factfile
Authority (WAPDA) and Pakistan Electric Power Company (PEPCO)

officials would also attend the meeting.
IPPs are still generating around 4,000MW to 4,500MW per day against
5,728MW power per day as agreed with government. During last year, the
power generation by IPPs stood at 5,500MW per day that has dropped during
the current season.
The country is said to face a power shortfall of over 3000MW per day
as the demand of electricity had shot up to 15,000MW per day. The
Independent Power Producers (IPPs) are generating 4,500MW power per day
and hydel generation stands at 3,500MW per day whereas the total power
generation stands at 11,500MW per day.
Sources said that with the passage of time, the power generation
capacity of the IPPs is declining, the major reason of power shortfall. Sources
said that IPPs would be asked to generate power as per agreement with the
government and also to extent their operations to overcome the power
shortages.
Sources said that the IPPs defaults have piled up to Rs 25.3 billion
and they have demanded the Federal Government to intervene for paying
immediately. Sources said that Independent Power Producers (IPPs) have
threatened PEPCO for suspending power generation. Sources said that the
meeting would review the payment of dues to IPPs.
Due to circular debt among different stakeholders including Pakistan
State Oil (PSO), PEPCO, KESC and Federally Administered Tribal Areas
(FATA) have become the main reason for low generation of power in the
country, sources said. Hub Power Company (HUBCO), the major power
generation and supply company has threatened PEPCO to pay its arrears on
the account of purchasing power otherwise it would suspend the power
supply.
HUBCO is to pay Rs 2 billion dues to PSO for the provision of
furnace oil to HUBCO. PSO had resumed the fuel supply to HUBCO after
obtaining the letter of comfort from Water and Power Ministry. On the other
side, HUBCO claims that it has to receive billion of rupees dues from the
PEPCO for provision of power, sources added.
Zafar Bhutta, Daily Time, May 9, 2008
http://www.dailytimes.com.pk/default.asp?page=2008%5C05%5C09%5Cstory_9-5-
2008_pg5_4
C OMPETING F IRMS C OMPLETE F EASIBILITY R EPORTS
The two international firms in fray for constructing a 1,000MW power plant,
which will use imported coal as fuel, have completed feasibility studies, an
official told The News on Saturday.
AES Corporation of US and Japanese Mitsui Group were short-listed

in December 2006 to prepare two separate feasibility reports for Pakistan’s
first such power plant.
“Negotiations for power tariff will get underway in a couple of
weeks,” said the official, who works for Private Power Infrastructure Board
(PPIB). “I cannot specify how much that is going to be, but it will be around
NEPRA’s tariff for indigenous coal-fired power plants.”
Pakistan is facing an electricity shortfall of 3000MW per day, and
spends billions of rupees annually to import fuel oil to run its thermal power
plants.
The decision to generate power using imported coal was based on
assumptions that not only will it help in meeting demand, the cost of coal will
always be lower than oil’s.
National Electric Power Regulatory Authority (NEPRA) has given an
upfront tariff of US7.8 cents per kilowatt hour (kWh) for Thar coal-fired
power plants. However, this tariff differs greatly from what the investors will
want for a power plant based on imported coal.
Landed cost of imported coal has surged to $130 per tonne from $60
a year ago. Any tariff based on this coal will reflect the price fluctuation, unlike
the upfront tariff offered by NEPRA.
NEPRA’s tariff has been calculated on the basis of a report prepared
by a German firm RWE in 2004. RWE has recommended a leveled tariff of
7.1 cents per kWh for 40 years.
Abdul Basit Mehta, a local representative of RWE, said the tariff was
calculated after taking into consideration the costs associated with mining and
generation. There is no variable component in the tariff, he added.
NEPRA’s tariff seems lucrative from RWE’s point of view, but
Hassan Associate, which has proposed the mining of Thar coal and using it for
a 1000MW power plant, sees it unfeasible.
“Cost of machinery and equipment has increased manifolds in the last
few years,” a company official said. “Anything below 10.5 cents will be
unacceptable.”
The company had initially demanded 11.1 cents, but had to revise
down the tariff after the government’s refusal.
It is prudent to recall again, that back in 2005 a Chinese company had
agreed to undertake the capital-intensive project at 5.7 cents. That tariff was
rejected and the company left.
Pakistan is fighting to catch the elusive dream of utilising cheap
source of energy since 1992, which was the year when it was discovered that
Thar District is sitting over 175 billion tonnes of coal reserves.
The News, May 11, 2008
http://www.thenews.com.pk/print1.asp?id=111829
50 IPRI Factfile
G OVT TO I NVITE B USINESSMEN TO D ISCUSS P OWER C RISIS

Federal Minister for Kashmir Affairs, Northern and Information Technology
Qamar uz Zaman Qaira has said the government has decided to convene a
special Cabinet meeting to cope with ongoing energy crisis.
“All the relevant experts and chambers would also be invited for
suggestions over the issue which now has started taking its toll,” he expressed
these views while speaking at Lahore Chamber of Commerce and Industry
(LCCI) on Saturday.
Minister said the present government was taking all possible measures
to bridge the gap between demand and supply of electricity. Due to acute
shortage of power, not only the industry, the common man was also suffering.
He said all the issues had been discussed threadbare in all the four
Cabinet meetings held so far.
He said to develop IT infrastructure, the government has divided the
country into 14 regions and aggressive investments would be made to equip
1400 cities and villages with Information Technology that do not have access
to IT.
He said the government has introduced scholarships for the
promotion of Information Technology.
On the issue of Kashmir, the Federal Minister said that sometimes,
informal diplomacy can do the miracles and business community should use
its good offices for a breakthrough in this regard.
Federal Minister said steps were on way to promote trade between
Indian occupied Kashmir and Azad Jammu Kashmir that would definitely help
bring the people of two sides further closer.
He said special attention was also being given towards vocational
training and skill development, as the industry was heavily suffering because of
the shortage of skilled labour.
Referring to atta prices, he said there was an anomaly in the provision
of subsidy. Equal subsidy was being given on atta used by the rich and the
poor. Things are being sorted out to ensure benefit to the poor alone.
LCCI president, Mohammad Ali Mian stressed the need for early
solution of Kashmir issue. He said no Confidence Building Measure (CBM)
would work unless the issue of Kashmir is resolved.
Daily Times, May 11, 2008
2008_pg5_16
E NTANGLED IN E NERGY W EB
Commendable developments have materialized lately on various avenues
of energy sector in Asia with countries fostering forward their
collaborations for fulfilling their energy requirements. The dream of
making Asian gas grid could transform the quest for energy by Asian
economies into a cooperative, not conflictive enterprise. Regional actors
entangled subjectively in energy web of interdependence, could generate
far-reaching effect on the security, stability and development of the
region. Hence, locking their positions by working together in a manner of
complex correlation.
The outcome of this interconnectedness would determine the
future course of economics, politics, inter-state relationships, economic
cooperation and security status of the region as a whole. With growing oil
prices skyrocketing, Asian country's thrust for cheaper imported gas has
acquired a greater urgency than ever before. In order to fulfill energy
requirements, countries like Pakistan, India, Iran and China have leaned
their thrust even to develop civilian nuclear technology to meet the needs
of ever expanding economies. Nowadays, we are totally dependent on an
abundant and uninterrupted supply of energy for living and working. It is
a key ingredient in all sectors of modern economies. It is high time that
we must secure our future in the growing state of depleting energy
resources.
As the new energy world order dawned with momentum in Asia,
several key benchmarks have been achieved on aspired projects of IPI
(India-Pakistan-Iran) and TAPI (Turkmenistan-Afghanistan-Pakistan-
India) gas pipelines. These pipelines can be more appropriately called as
"life lines" to the industry and economies of Asian subcontinent and
beyond. Countries involved in both either IPI or TAPI had serious
reservations involved, which had descended them to remain reluctant in
pursuing the projects. We are still in the state of wilderness as yet the
projects, which have actually set foot in early 90s or later failed to
materialize as yet. Both projects got badly snagged in international and
regional politics. But latest signing of "Government Framework
Agreement" in Islamabad to initiate TAPI project, readmission of India in
IPI, workable agreement between Pakistan and India on transit fee, recent
agreement on IPI to draft the final phase of the project and finally signing
an accord, depicts active assertion of the stakeholders to remove the
impediments on the way.
Both projects (IPI) and (TAPI) would provide the gas to the
Asian developing countries including Pakistan, India, China and beyond
the region. These states have limited oil/liquid reserves to meet their
52 IPRI Factfile
demands. With rocketing prices and limited supply of oil, signifies the
option of gas which is cheaper, cleaner and plentiful, and in an
increasingly environmentally conscious world, developed countries see
this as an attractive alternative to oil and mineral fuels. Hence, oil-
producing states of Persian Gulf are striving to develop their gas supplies
to supplement their dwindling oil reserves. While the landlocked El
Dorados of Central Asia offer the energy hungry burgeoning economies to
invest and evolve effective methods to transfer the resources. These states
have abundance of proven and unproven gas and oil reserves anticipating
to be explored. It is quite mandatory for the states to develop the national
strategies for robust exploration of not only indigenous resources but
require enhancing by trans-national energy options to meet the
constraints.
TAPI gas pipeline project, would begin from the Dauletabad gas
field (Turkmenistan), and runs through Herat, Kandhar (Afghanistan),
Quetta, Multan (Pakistan) and the final destination of the pipeline will be
the Indian town of Fazilka, near the border between India and Pakistan.
The total length of the pipeline would be 1,680 kilometer will be built and
operated by a consortium of national oil companies from the four
countries, furthermore the cost of the project was just over 3$billion in
2003; today it is $7.6billion. The pipeline is to begin its operations in 2015,
if all the contending issues are to be resolved. The pipeline will transport
33 billion standard cubic meter (scm) gas from the Dauletabad gas field.
There will be six compressor stations along the entire length of the
pipeline and it will have to be guarded by the states they pass through,
apart from the pipeline. The largest stretch will fall to the share of
Pakistan, between Quetta and Multan and the Indian border. ADB
provided the financial assistance of 1.0$ million for the feasibility study of
the project.
Several major risks were proving as impediments in materializing
the TAPI project. Security of the pipeline is the most important in this
regard, as it passes through the tumultuous region of Afghanistan, where
the security situation is far more satisfactory. Turkmenistan requested UN
to adopt a new convention guaranteeing pipeline security. The proposal
represents the abandonment of fiercely nationalist policy adopted by
Niyazove. Turkmenistan's claims of having reserves of more than 25
trillion cubic feet need to certify through an independent auditor. Issues
like that of consortium formation, legal and regulatory framework, and
issues of gas sales and purchase agreements need to be resolved at earnest.
Political discords among the regional and international powers related to
US support to TAPI project due to contentious relations with Iran,
Pakistan and India's conflicts and disagreements on various issues and
Pakistan's constrained relations with Afghanistan are proving as hindrance

on the way.
The rival IPI (Iran-Pakistan-India) pipeline, conceptualized in
1989, have the potential to link Persian Gulf with roaring economies of
Far East. The proposed pipeline would deliver gas from Assalouyeh in
southern Iran through Balochistan and Sindh provinces of Pakistan and
then to India. This pipeline was smudged and hampered by conflicting
issues ranging from security to pricing and finalizing the framework.
Length of pipeline runs 1700 miles with 3.2 billion cubic feet per day of
Iranian gas to Pakistan and 2.1 billion cubic per day to India by 2011
moreover the cost of the project is nearly 7-8 $billion. To settle the major
issues apropos of pricing, Iran demands that clause to revise the gas price
every three years to be incorporated into the agreement, which both India
and Pakistan disagreed.
If substantiate effectively, then IPI pipeline would also assert and
depict independent foreign policies adopted by Pakistan and India on
issues of high priority related to energy with certainly wanting to break
from the pressure to abort the plan. With sever warning to India against
joining the project by the US because of Iran, still it demonstrated sign of
thrust to move forward for the project. Even US lured India to have the
much-aspired civilian nuclear deal to meet its growing energy demands.
However later early this year, when India shows reluctance in the IP
project, Pakistan declared that China would become part of the project
and convert into (IPC). This proclamation sent quaver to India. While
depending on the feasibility of the project, China illustrated keen interest
in making this a reality with having necessary expertise and resources.
With growing demand at domestic markets soaring, and involvement of
China led India to participate with revised sense of urgency.
For India and Pakistan, it is difficult to show the same level of
consent on the IPI because of the divergent foreign policies and priorities
involved. Pakistan has deep rooted and closer relations with Iran and
support on various issues either nuclear or forming a regional energy grid.
Pakistan clearly realized that Iran sees the IPI as both a source of valuable
foreign exchange as well as warding off the mounting US and other
western powers to isolate Iran on its nuclear enrichment foreign policy.
For both states, it would be appropriate to understand the emerging
reality that in near future the solution to Afghan problem is far from being
a reality and TAPI project is less likely to be practically implemented.
Even option was propounded that instead of TAPI, a revised TIPI
(Turkmenistan-Iran- Pakistan -India) may be plotted. This is actually more
feasible and viable solution, with less troubles for the project.
Analysis reveals that on one hand if IPI project carries greater
political price for both Pakistan and India than on the other TAPI had
54 IPRI Factfile
been put on hold because of security and sensitive areas on the way. But
the fact remains that nearly all roads which provides energy security in
Asia lead from Tehran. Iran's ability to act as an energy corridor for the
sub-continent and salient importance of Iran is indisputable. In the rapidly
intensifying international energy competition, Iran holds the master key to
the most staggering political and economic roadblock that impedes the
economic growth. The problems wont be solved while isolating Iran but
close and competitive environment leads to prosperity of the
Conclusively, the fact remained which must be kept in mind is that TAPI
and IPI would be operational in domains of disorder lying between
economically upward regions. Afghanistan as reluctantly been controlled
but still has the seeds of insurgency expected to be blossoming this
summer as illustrated by the attack on President Hamid Karzai with loud
and clear message of " strike any where in the world". On the other hand
Pakistan present shaky coalition government has been involved in settling
the domestic political instability with paying merge attention to resolve the
economic issues. Therefore it can be concluded TAPI and IPI could not
become good devices of leverage unless and until Pakistan is to set its
house in order and become a normal, democratic and stable state.
Farhat Akram, The Nation, May 12, 2008
http://www.nation.com.pk/pakistan-news-newspaper-daily-english-
online/Business/12-May-2008/Entangled-in-energy-web/1
M EETING H ELD TO D ISCUSS P AKISTAN ' S E NERGY C RISIS

Pakistan's federal cabinet yesterday convened a special meeting here to discuss
the worsening energy situation and decided that all commercial markets will be
closed at 9 pm while clocks will be set one hour ahead from June 1 till the end
of August.
The objective of the whole exercise is to save energy in the peak
summer season. The move of setting the clock an hour ahead that had failed
twice first during the term of prime minister Banazir Bhutto and then in the
last government headed by President Pervez Musharraf is now being tried
again to get the desired goal of saving energy.
This means the sun rise in Islamabad will be at 6:05 am instead of 5:05
am and sun set at 8:05 pm instead 7:05 pm. Presided over by Prime Minister
Yousuf Raza Gilani, the cabinet also decided that international bids will be
invited to generate 1,200 mega watts (MW) of electricity on fast track basis.
The industrial zones across the country will start observing holidays
on rotation basis to share the load on electricity while air conditions (ACs) in
all government offices will not be turned on from 8 am to 11 am during this
period. Half of the street lights will also remain off on alternative basis during
these three months. The government will also import 10 million energy saving
bulbs to promote the culture of energy conservation.
This summer (June-August), Pakistan is facing 4000MW of electricity
shortages worse than the last year after a 50 per cent (2500MW) drop in hydel
generation due to less water in rivers and slower melting down of snows on
the mountains, Water Minister Raja Pervez Ashraf said while briefing the
newspersons on the cabinet meeting. He said from July international bids will
be invited for production of 1200 MW on fast track basis.
These bids will be offered at the existing rates (considered cheaper) of
the National Electric Power Regulatory Authority (NEPRA) in order to attract
investment.
However, this offer will be closed as soon as the government achieved
the generation target of 1200 MW.
The water minister said the power generation tendering and
production process took three years or more, but the government has decided
to accomplish it within a year-and-a-half.
Khaleej Time, May 16, 2008
http://www.khaleejtimes.com/DisplayArticleNew.asp?section=business&xfile=data/
business/2008/may/business_may560.xml
G OVT T AKING S TEPS TO O VERCOME E NERGY C RISIS

The government is taking all necessary steps to overcome the ongoing energy
crisis, as it is well aware of the sufferings of masses and the difficulties being
faced by the industry, said Raja Riaz, a senior Punjab Minister.
At closing ceremony of two-day LCCI SME Fair 2008, he said, a crash
energy conservation plan had already been rolled-out by the federal
government to bridge demand-supply gap. He squarely blamed the previous
government for the energy shortage, “Had a go-ahead been granted to smaller
power projects around 600 MW electricity in yester years, the situation would
have been far better.” Look at India, it had built scores of dams during all
these years, he added.
He said LCCI SME Fair and the seminar would help further
consolidate businesses in Pakistan. Mohammad Ali Mian urged Minister to
evolve all the future business policies after having due consultation with the
stakeholders as in the past this practice was hardly seen anywhere.
He said a number good policies in the past could not give desired
results for want of due attention towards their implementation. On energy
crisis, he urged the Minister to tap alternate energy resources because it would
help curtail government’s import bill, which was going up with every passing
day due to high oil prices in the international market.
56 IPRI Factfile
He said Federal government should immediately start construction of

big water reservoir including Kalabagh Dam.
Daily Times, May 17, 2008

2008_pg5_18
E NERGY C ONSERVATION P LAN TO C OMBAT S HORTAGE :

M INISTER
Senior Punjab Minister Raja Riaz has said the government is well aware of the
sufferings of masses and the difficulties being faced by the industry. In that
regard, he said, a crash energy conservation plan had already been announced
by the federal government to bridge the demand-supply gap.
The minister was speaking at the closing ceremony of a two-day SME
Fair-2008, organised by the Lahore Chamber of Commerce and Industry, at
the LCCI late on Thursday night.
The minister squarely blamed the previous government for the energy
shortage, saying in 1994 a plan was chalked out to produce 600 megawatts of
electricity by building small power projects on canals but the plan could not
get go ahead due to unknown reasons.
“Had a go-ahead been granted to these smaller power projects in
yesteryears, the situation would have been far better.” Look at India, it had
built scores of dams during all these years, he added.
Speaking on the small and medium enterprises, the minister praised
the Lahore Chamber for supplementing government’s efforts for bringing an
economic turnaround. The LCCI SME Fair and the seminar would help
further consolidate businesses in Pakistan, he added.
In his address, LCCI President Mohammad Ali Mian urged the senior
minister to evolve all future business policies after consultation with the
stakeholders as in the past that practice was hardly seen anywhere. He said a
number of good policies in the past could not give desired results for want of
due attention to their implementation.
On energy crisis, he urged the minister to tap alternative energy
resources because it would help curtail government’s import bill which was
going up due to high oil prices in the international market.
Due to the shortage of electricity, he said, not only the industry was
heavily suffering but it was feared that the unemployment graph could further
go up.
Mohammad Ali said infrastructure played an important role in the
industrial growth of any country and there was a need for the government to
expedite up gradation of infrastructure that would not only encourage local

investors but would also help attract foreign investment.
The LCCI president also suggested to the minister to widen the scope
of Businessmen-Police Liaison Committee by including all the industrial areas
in it as an improved law and order situation was a prerequisite to investment.
D EMAND -S UPPLY G AP I NCREASES D RAMATICALLY TO

415MW
The electricity demand-supply gap in the city increased phenomenally to 415
Megawatts (MW) on Tuesday, after Karachi lost electricity from its nuclear
power plant at KANUPP, officials concerned told The News.
This shortfall is probably the highest recorded here during the current
season. The total demand of power in Karachi during the last 24 hours was
2,228MW.
A KANUPP spokesman said that the plant, which supplies 80MW to
the Karachi Electric Supply Company (KESC) tripped at around 10:20 a.m.
Tuesday due to the loss of KESC transmission lines.
Meanwhile, KESC officials said that Unit no. 6 of the Bin Qasim
Thermal Power Plant has also been non-functional for the past couple of days,
but would be online soon after the requisite repairs and maintenance.
The ever-widening demand-supply gap means that almost every
residential and commercial part of Karachi has been coming under prolonged
and multiple spells of power load-shedding lasting over two-and-a-half hours
each. These continue toll late into the night.
Moreover, several areas of the city have experienced prolonged and
recurring spells of power breakdown since Monday evening because system
overload has caused the transmission and distribution mechanisms for electric
supply in those areas to go haywire.
Probably the worst electric supply situation during the last 24 hours in
the city was in Federal B. Area Block-20 near the Edhi Centre. Residents of
the area suffered power breakdowns after midnight Monday, and the electricity
supply had not been restored until 05:00 p.m. Tuesday.
Another complainant from Grey River Flats near the Korangi Creek
said that the residential complex had gone without electricity from 01:00 p.m.
to 05:00 p.m. on Tuesday. This was after recurring and prolonged power
failures from Monday evening till Tuesday morning.
Moreover, several parts of Malir, DHA, Lyari, PECHS, Gulistan-e-
Jauhar, and Gulishan-e-Iqbal reportedly suffered hours-long power failures till
58 IPRI Factfile
Tuesday evening due to serious faults in the systems and installations of power
transmission and distribution.
In addition to this, several sprawling residential areas of the city,
especially in the suburban parts, have been running dry for past couple of days
because the prolonged spells of power breakdown and load-shedding have
equally affected the water supply installations of the Karachi Water &
Sewerage Board (KWSB).
P AKISTAN F ACING A CUTE P OWER S HORTAGE

Pakistan is facing an acute power shortage that is hurting the economy, the
minister of water and power warned, noting the need for conservation.
Raja Pervaiz Ashraf said the shortage comes with the onset of severe
summer, the state-run Associated Press of Pakistan reported Wednesday.
Because of the shortage, electricity supply to homes is cut for several
hours a day, further raising the people's misery index. Some estimates say the
shortage may be as much as 4,000 megawatts, at a time when Pakistan is also
gripped by soaring food prices.
Ashraf, a member of Pakistan's new ruling coalition that took over in
March after months of violence and political instability, said the government is
determined to resolve the issue.
Under an energy management plan to conserve power use, all
commercial centers and markets are to be closed by 9 p.m.
Ajmal Baloch, president of a trade union, told APP that during the
summer, shoppers prefer to come to markets at night and a 9 p.m. closing
time would greatly inconvenience them.
He said people do not come to markets on official holidays, and the
government's decision to close them on Fridays instead of on Sundays would
further hurt business activities.
Despite attractive investment opportunities in a country of 160
million whose political climate is improving, rating agencies seem reluctant to
raise their numbers on Pakistan because of the continuing insurgency,
especially in tribal areas suspected to be Taliban and al-Qaida hideouts,
residual political uncertainty and macroeconomic problems including
shortages, growing fiscal deficits and soaring inflation.
Iranian Energy Minister Parviz Fattah is due to visit Pakistan later this
month to discuss a proposal to supply 1,100 MW of electricity to the South
Asian nation.
Iran's state-owned Islamic Republic News Agency has said during the
recent visit of President Mahmoud Ahmadinejad to Pakistan, Iran renewed its
offer to supply 1,100 MW of electricity to help meet Pakistan's energy needs,

especially at the Gwadar port in Balochistan province and neighboring areas.
Iran currently provides 35 MW of electricity along the Pakistan-Iran
border.
IRNA said Pakistan's conservation measures are designed to save 500
MW. It said Pakistani industrial units are being told to stagger their weekly
holidays.
May 21, 2008
http://www.upi.com/Energy_Resources/2008/05/21/Pakistan_facing_acute_power
_shortage/UPI-42941211408928/
R ENEWABLE R ESOURCES M UST TO C OUNTER E NERGY

C RISIS
Tapping of renewable energy resources of wind, solar and bio-fuels is
necessary to resolve the prevailing energy crisis and reduce the growing
trade deficit.
Environment Protection Department Additional Secretary Dr
Zafar Abdullah stated this while speaking at a seminar on 'Clean Energy
for Safe Environment and Sustainable Development' here at a local hotel
on Wednesday. EPD Director General Dr Shagufta Shahjehan chaired the
seminar.
Dr Zafar said that renewable energy resources were cost efficient
and environment friendly. He said that only technology was needed to tap
these resources available in abundance.
Former NESPAK General Manager Sabir Ali Bhatti said that
power shortage was resulting in economic loss of 3 billion dollars per
annum. The country was facing power shortage of over 4,000 MWs
whereas it could generate 10,000 MW from coal alone. China was
generating 80 per cent of power required by it from coal but Pakistan was
yet to acquire the technology.
He said that Pakistan was not utilising its hydel power potential
also. Water flowing from Tarbela Dam can be easily stored by building a
dam at Kalabagh. Wapda was forced to purchase thermal power from
private companies at much higher rates on the pressure of international
financial institutions. He said that Indus River System alone had hydle
power potential of 35,000 MWs but the country was facing a shortage of
4,000 MW. Wapda was losing Rs 52 billion per annum by purchasing fuel
at the rate of Rs 35,000 per ton and supplying it to the IPPs at the rate of
Rs 5,000 per ton under a forced agreement.
He said that the World Bank had opposed execution of hydel
power projects by Wapda because these would have affected import of
60 IPRI Factfile
power generation equipment from the developed countries. Pakistan had

the third largest coal reserves in the world and could use the same for
generating power like Iran, India and China by acquiring the technology.
Pakistan Council of Renewable Energy Technologies Deputy
Director Irfan Yousaf said that a 700 MW wind power generation project
had been launched at Gharo in coastal area of Sindh. Solar energy projects
were being launched in Northern Punjab and Sindh. India was generating
9,000 MNWs from wind whereas Pakistan had a potential to generate
50,000 MW from its 1046 kilometre coastline.
NCA Professor Dr Sohail Qureshi said that historical buildings
were energy efficient and environment friendly because of utilisation of
indigenous materials and technology. The old building tradition had,
however, made synonymous with backwardness and replaced by the new
one causing maximum energy wastage. Sustainable architecture was
required to be energy efficient.
The Nation, May 22, 2008
online/Regional/Lahore/22-May-2008/Renewable-resources-must-to-counter-
energy-crisis
L OAD S HEDDING : P ART OF C ONSPIRACY

Pakistan is facing multivariate problems nowadays; price-hike, wheat crisis and
unending load shedding are among the top most problems. Load shedding is a
serious issue as it not only hampers the domestic, business and industrial
activities but also spoils one’s mood, even one’s behavior. Pakistan experiences
serious power-shortage resulting in serious power deficit that hampers not
only the development process but also poses serious threat to national growth.
Heavy load shedding of power across Pakistan creates major problems
especially for all categories of users. The most affected user of electricity under
this crisis is the households followed by industrial users. In the past
development plans focusing on electrification of villages, power connection to
new industrial units and to agricultural producers were put on hold till power
installation and generation was undertaken. Rapid rise in population and
increase in number of households and its demand for electricity was not fully
accounted in development plans. That’s why now the production and supply is
too low according to the demand. Lack of proper power policy and planning
evolves major area that requires government’s initiative. The countrywide load
shedding has proved the inefficiency, mismanagement and governance issues
related to policies and practices of our successive governments.
Allah has blessed our country with natural resources that can be
utilized to create electricity. We have plenty of wind and sunshine to create
energy from them, but it will take political will on part of our government as
well as politicians to invest in for the country’s better future. We have thermal
power base electricity. Though Pakistan is well endowed with water resources,
yet hardly any development projects have been visualized. Apart from lack of
development, the province also suffers from manipulations. The present
energy crisis in the country is because we have failed to build large dams.
Water is rapidly becoming one of the defining crises of the 21st century. We
have two conspiracies related to water shortage in the country. One is national
conspiracy and the other is international one.
National conspiracy is that our provinces blamed each other for water
related crisis for example Sindh attributing the scarcity to theft and wasteful
use by Punjab. After that Sindh traditionally has had two complaints against
Punjab – one that in the dry season, when Sindh needs water, Punjab does not
release enough downstream; and during floods, when Sindh does not need
water, Punjab flushes out surplus water downstream. The Kalabagh Dam is
also under this controversial approach. The other is international conspiracy
related to Pakistan’s water resources that United States and India spoiling
Pakistan’s water resources they don’t won’t Pakistan to have much resources
to combating its energy crisis.
They create hurdles for Pakistan in this regard. United state indulging
Pakistan to its security related problems in Tribal Areas and diverting
Pakistan’s attention towards major issues related to energy and India
committing itself to theft Pakistan’s water resources which comes to India
here is the example of Baglihar Dam. Recently Government of Pakistan pays
attention to that crisis and takes different measures to tackle that crisis.
Government made an agreement of “Nelam power project” of about 130
millions. This agreement is between Pakistan, America and Norway. On
Pakistani side this is on WAPDA and NEEPAK.
This would be completed with the help of China. It generates 969
megawatt of electricity. 15-18 thousands of thermal electricity would be
produced in upcoming five years. Government makes sure that the work
would be started on Kalabagh Dam. The work would be started on Bhasha
Dam next year which generate four and a half thousand megawatt electricity.
On short term basis government also take different actions like Markets and
Shopping Malls would be closed at 9 o clock. Bill boards would be closed.
Holiday should be on Friday. In governmental offices air conditioners would
be started at 11 O’ clock. Energy savers would be used. So through these steps
we can reduce the consumption of electricity. But this could be on short term
basis in order to solve this issue of load shedding we need a permanent
solution though constructing more power plants. It may surprise to see that
over the last 8 or 9 years there hasn’t been A SINGLE MEGAWATT increase
in generation capacity.
62 IPRI Factfile
So on long term basis we need the national strategy to address the

crises focuses to make use of all options to meet the current and future power
requirements. This included hydro, thermal and nuclear sources. Several
thermal powers were installed which resulted in two problems: import of fuel
to meet power generation requirements, and resultant significant rise in power
generation cost and cost to user shot up manifolds. Hydropower generation
was strongly advocated to not only supplement power generation but also at a
much lower cost. For thermal power we need to have more water resources
like Dams and rivers etc.
Over the years we have neglected other sources. Take coal for
example, Pakistan has the 7th largest coal reserve in the world (in Thar area)
and we only produce 0.2% of electricity from it! Coal is one of the cheapest
ways to produce electricity, that’s why countries like Australia produce 77% of
their electricity from coal. And please don’t give me the crap about pollution,
because work is being done to make it as pollution free as possible.
We are one of the few declared nuclear States of the world, yet we
produce a fraction of power from nuclear as other countries do. We can use
our nuclear power in peaceful means or purposes mainly in generating
electricity. Then after that there is solar (and every part of Pakistan has
abundant sunlight throughout the year), the Government can encourage
people to install solar water heating and solar photovoltaic on their rooftop.
And we must also not forget wind, out neighbour India is the world’s 4th
largest wind power producer in the world!!! Shocking, it’s it, but alas, none of
our governments has seriously looked into it, therefore Pakistani people are
being blessed with the gift of load shedding with the advent of New Year! So,
where does a GDP of 8% stand?
So our government’s paramount objective must be to provide
adequate facilities for the generation, transmission, and distribution of
electrical energy keeping in view the future power requirements for the
industrial, agricultural and economic development of the country.
Fozia Shahnaz, Pak Observer, May 23, 2008
http://pakobserver.net/200805/23/Articles04.asp
C OAL P OWER P LANTS TO H ELP O VERCOME E NERGY C RISIS
A high-powered World Bank delegation, led by Vice President for South

Asia Region, Praful C Patel, held a meeting with Chief Minister Sindh
Syed Qaim Ali Shah at Chief Minister House here on Monday.
In the meeting Chief Minister informed the delegation that
present government will fully implement the party manifesto and address
to problems of people in the education, energy and environment sectors
besides unemployment on priority basis.
He appreciated the World Bank's assistance program, particularly

in education, water, health and power sectors.
He said that Shaheed Quaid Mohtarma Benazir Bhutto had
initiated a eight billion dollars power project for Sindh to generate 5000
MW of electricity, but the same, in later governments was left unattended
with the result that not only the countty but Sindh province specially
suffered where industrial sector was badly affected. Chief Minister
spotlighted the importance of Thar Coal reserves and stressed that with
coal based power plants, the power crisis in the country will be solved. He
said the project will also help overcome un-employment and bring
prosperity and development in the area.
The WB Vice President for South Asia Region, said that WorId
Bank will fully assist in projects for of furtherance of education,
strengthening and improving Irrigation system in Sindh and also support
other sectors like health etc.
He said that previously, project under Sindh Development Forum
was launched in the year 2001 and now a similar programme will be
revived so as to achieve the targets of development in Sindh. Senior
Minister Education Pir Mazharul Haq informed that Sindh province lags
behind in the education & health sectors, specially in rural areas.
Chief Secretary Fazal-ur-Rehman emphasized the need for paying
attention on social sector together with special attention towards power
generation.
World Bank team stressed the need for ensuring progress of
community as other schemes are also implemented on matching grants
with community/Government of Sindh to bear 50% expenses of the
projects.
The meeting was attended by Additional Chief Secretary Nazar
Hussain Maher, Secretary Finance Ghulam Ali Pasha, Secretary Health
Shafique Ahmed Khoso, Secretary Education Rizwan Memon, Secretary
Irrigation & Power Shuja Junejo, Secretary (Services) Iqbal Durrani,
Secretry Mines & Mineral Younis Dhaga and other senior officials.
The Nation, May 26, 2008
online/Business/27-May-2008/Coal-power-plants-to-help-overcome-energy-
crisis
G OVT TO E NSURE I NDISCRIMINATE L OAD S HEDDING : PM

Prime Minister Syed Yousuf Raza Gilani Friday said the government would
ensure that load shedding was done judiciously and without discrimination,
and people in remote areas were not unduly suffered. Talking to a delegation
64 IPRI Factfile
of representatives belonging to different walks of life, he said it would be

ensured that load shedding is shared equitably and fairly by different parts of
the country.
He called upon the people to observe conservation measures and
support government’s 100-day programme which focuses on better
management of existing resources to overcome energy shortage in the
country.
The Prime Minister said that the government is fully aware of the
hardships being faced by the people.
Despite unenviable economic conditions, the government has taken
several measures to improve the lot of the common man and rid them of the
wheat and electricity shortages, he added. …
APP, May 30, 2008
http://www.app.com.pk/en_/index.php?option=com_content&task=view&id=3985
6&Itemid=2
P AKISTAN P UTS C LOCKS F ORWARD , H OPES TO S AVE

E LECTRICITY
Pakistan put its clocks forward an hour on Sunday while shops have been
ordered to close early as the country struggles with an acute electricity
shortage.
Setting clocks forward by an hour, to six hours ahead of GMT, should
enable the country to take advantage of an extra hour of daylight in the
evenings and save power.
Shopping centers have also been ordered to close at 9 p.m. (1500
GMT) from Sunday while government offices have been told not to turn on
the air conditioning for the first three hours of the working day.
Pakistan tried moving to daylight saving time in 2002, but abandoned
it as many people, particularly in rural areas, ignored the switch.
Some people doubted the time change would work this time.
"It's bound to fail. Half the people aren't aware of it and the other half
don't care," said Adnan Hadi, a television producer in the southeastern city of
Multan.
Pakistan is grappling with a shortfall of 4,500 MW of power and
throughout the country electricity is cut, usually for an hour at a time, several
times a day.
Water and Power Minister Raja Pervez Ashraf said on the weekend
the government planned to overcome power shortages within a year by
generating an extra 6,000 MW.
He did not elaborate on how the extra power would be generated but
officials have said Pakistan hoped to import second-hand generating
equipment.
Power cuts, as well as food shortages and inflation, have fuelled anger
and contributed to a landslide opposition victory in a February general
election.
Early this year, the government shut steel melting units across the
country for two weeks and ordered hundreds of textile mills to reduce
operations to cope with the power shortage.
In April, textile workers staged violent protests against power cuts
that have crippled their mills.
Pakistan's installed capacity is about 19,845 MW, of which about one-
third is produced by hydro-electric plants. Much of the rest is generated by
thermal stations, fuelled primarily by gas and oil.
But no new capacity has been installed for the past decade despite
strong growth and rising demand for power.
China Post, June 2, 2008
http://www.chinapost.com.tw/asia/pakistan/2008/06/02/159152/Pakistan-puts.htm
T HE O PTION FOR S OLAR P OWER

For Pakistan, 2008 will prove to be a long and hot summer. In April, some of
the major cities were being put through six hours of load shedding every day.
In May, power interruptions had increased to seven hours a day. Another hour
may be added in June. Some relief may come in July as the reservoirs begin to
be filled up by the monsoon rains but once the dry season arrives, the duration
of load shedding will begin to increase again.
The government estimates the supply-demand gap at 4000 MW. This
is not likely to be cut down since no new generation capacity is in the works
for at least another one to two years. In the meantime, the price of oil
continues to increase. New records are being set almost every day. This will
increase the cost of generating electricity since a significant amount of power is
generated by oil-fired stations. How to deal with this problem?
The question has some urgency as there are serious economic and
social costs for letting the energy shortage go unaddressed. For some
inexplicable reasons Pakistan never treated the energy sector as deserving of
serious attention by the policymakers. The sector was an area of residual
concern even when the country treated economic planning and strategising on
economic issues as high priorities area for the policymakers. Power houses at
Mangla and Tarbela were the byproducts of the Indus Water Treaty with India.
The decision to invite the private sector to invest in energy generation was
taken in the early 1990s when the country was faced with a growing supply-
66 IPRI Factfile
demand gap. In other words, the policymakers have turned to the sector of
energy only when opportunities have arisen as a result of other developments
or when there is a serious crisis. There is a crisis at this time. How will
Islamabad react?
This may be a good time to develop a comprehensive approach
towards the sector, factoring in policies aimed at affecting demand, supply and
environmental concerns. In looking at supply, the country should seriously
examine alternative sources for generating electricity than those that have been
tried in the past. In this context is solar energy a serious option for Pakistan?
Have the recent technological advances achieved by the industrial world made
the sun a viable source of energy for a sun-drenched country such as Pakistan?
If the technology that converts solar energy into electric power still more
expensive than other sources of energy could subsidies be provided to attract
private investment into this sector?
Some recent developments in converting solar power into electricity
have begun to provide some answers to these questions. Surprisingly the
answers come from the work being done in Germany. It is useful to look at
the German experience to draw some lessons for Pakistan. Although Germany
is wreathed in clouds and is therefore an unlikely candidate for becoming a
pioneer in this field, it has become a leader because of the design of public
policy to encourage the use of the sun as a source for generating electricity.
In 2007, Q-Cells, a German company surpassed Sharp, a Japanese
company, to become the world’s largest manufacturer of photovoltaic solar
cells. Thanks to the work done by Q-Cells, Germany has by far the largest
market for photovoltaic systems which convert sunlight into electricity. It has
about one-half of the world’s total installations. It is the third-largest producer
of solar cells and modules, after China and Japan. Once the United States and
Japan were the rising solar stars where the private sector was taking advantage
of government subsidies. But these became less enticing as the government’s
interest in developing the industry waned.
According to Mark Landler writing for The New York Times, “the
debate over solar subsidies is a test of how an environmentally minded country
can move from nurturing a promising alternative energy sector to creating a
mass-market industry that can compete with conventional energy sources on
its own footing. [But] it is a tricky transition, even with a sympathetic
population.” Thanks to a policy that encouraged the development of solar
energy, more than 40,000 people now work in the photovoltaic industry in
Germany. Investors have come in from many countries including those from
Canada, Norway and the United States. Many investors have come from the
places that had developed the needed technology but where the governments
were less supportive than the one in Germany.
All the heart of the debate in Germany is the Renewable Energy
Sources Act which requires power companies to buy all the energy produced
by alternative systems, not only solar but also wind and ocean waves at a fixed,
above-market price for 20 years. This has proved to be powerful incentive for
investors including those working with solar panels. The Act locked in the
customer base for the electricity produced by alternative systems. They can
earn reliable returns on their investment. The amount of electricity generated
by these systems rose 60 per cent in 2007 compared with 2006. Most of the
increase has come from wind systems, which now provide 6.4 per cent for the
total electricity produced in Germany.
The share of solar energy is still very small – only 0.6 percent of the
total. The small share of solar is understandable. The country gets only 1,528
hours of sunshine a year, less than a third of the total daylight hours. London
has about the same exposure to the sun, but it has one third fewer sunshine
hours than in the cities in Europe along the Mediterranean and one-half of the
cities in western United States. Most cities in Pakistan receive between 2,200
and 2,500 hours of sun, 60 to 70 per cent more than that of Germany.
Germany is a good example of how public policy can overcome
natural disadvantages. The Renewable Energy Sources Act has contributed to
the country’s far lower dependence on hydrocarbons for generating electricity.
In 2007, it derived 14.2 per cent of its electricity from renewable sources,
ahead of the 12.5 percentage adopted by the European Union as a target.
The German Act, while mandating the utilities to buy the electricity
generated by alternative systems, allows them to pass on the additional cost to
the consumers. There is no limit on how much electricity can (or should) be
purchased by the utilities from the alternative systems. This has caused utility
bills to increase but for the time being by modest amounts for an average
domestic consumer. The additional cost was only $1.70 a month in 2007. This
will double by 2014. By that time the solar industry will scale up to $185 billion
in terms of public support. This is about the same amount being provided to
the superannuated coal industry.
The debate about the cost of solar and other renewable sources of
energy has created pressures on the government to make the current law less
generous. There are proposals to cut down the period over which subsidies
would be provided, from the current 20 to 15 years. There is also as effort to
sharply reduce the above-market price allowed to the producers. Fears that
such proposals would be enacted into law, are forcing some Germany
companies to move to other countries. Signet is building its next factory in
Chennai, India; Q-Cells is building one in Malaysia.
What are the lessons for Pakistan in the German experience and the
work being done in other industrial countries? One, Pakistan needs a structure
of incentives to get power generated from such renewable sources as the sun.
A purchase price guaranteed for a fairly long period that ensures good returns
to the private sector would help. Two, this may be a good time to encourage
the development of domestic industry that would produce the needed
68 IPRI Factfile
equipment for developing generating electricity from renewable sources. The

technologies are still in their infancy and there is an opportunity for
newcomers in the area to create niches for themselves. Some work is going to
replace silicon in photovoltaic cells with plastics.
At this time, the efficiency of plastic photovoltaic cells is only five per
cent while that of conventional silicon cells is 15 to 18 per cent. Even
countries such as Pakistan could invest in the industries needed to develop
alternative sources for generating electric power. Three, it may be an
appropriate time to fix some targets for encouraging the use of renewable
sources for generating power. The EU is working on a target of 12.5 per cent.
In the United States, the two candidates for the Democratic ticket want
renewable energy to generate 25 per cent of electricity by 2030.
This is the time for action by the government and it should look at all
possible avenues for solving the current crisis.
Shahid Javed Burki, Dawn, June 2, 2008
A DVANCING OF C LOCKS C REATES C ONFUSION

First of June was perhaps a very confusing day in the lives of the people as
everything went almost haywire after the smaller hand of clock was forwarded
one hour.
On June 1, the clocks jumped an hour ahead to save the day light time
and extract the maximum possible work potential but it brought a lot of
confusion and inconvenience for the people of the country in general and the
citizens of the Provincial Metropolis in particular.
The list of confusions is considerably long since the people are not yet
tuned up to the required level to except such ‘innovative & noble’ ideas as yet.
It needs a most of prior practice and a complete step-by-step-
campaign to get the people acclimatized with any new idea, but as usual, this
‘brilliant’ figment of a very scientific mind was shoved down the throat of the
people without assessing the ground realities in a land where the literacy rate is
still under 23% even after six decades of independence.
Saturday, 1st of June was a day in the history of Pakistan which had
no mid night. Throughout the country the clocks directly jumped to 1 am
immediately after 11 pm.
All daylong women, men and specially children spent all their day
waiting for the ‘fateful hour’ when they will witness a unique happening. And
while waiting anxiously for the night all eyes were regularly gazing on their
watches and clocks religiously.
The most frequent questions asked by the kids were” What will
happen to their school time tables? Will the van driver who picks and drops
them also know about this change of time?
Thousands of students appearing in the Lahore Board’s Secondary
School Examination were utterly confused whether they would go for exams
according to which time table since the board officials never bothered to send
a public service message to this effect in the media.
The parents had to face confusion when they were making
preparations for sending their children to school.
Many Lahorites were of the view that the government should have
taken initiatives to overcome the prevalent power crisis instead of forcing the
whole nation to change the small hand of their watches an hour ahead. They
argued that the people would have to change their daily schedules in a bid to
maximum utilization of the sunlight energy. They urged the government to
kick-start energy-related projects without any procrastination.
The mindless load shedding in the city, a permanent irritant in the
lives of the people of Pakistan now, made this otherwise a productive and
positive initiative on the part of the government, a miserable addition in the
lives of the people. No sooner the clock struck midnight, the lights in various
parts of the city went out due to the on-going load shedding. This was
something not accounted for by the already anticipating public which had
overlooked this ‘peace time blackout’. Many household were found groping in
the dark for a candle since they had ignored this ‘after effect’ of modernity
completely.
The other pinching aspect of the time change was the devastating
effect of the load shedding the scorching heat since the clocks had gone
forward which also ‘saved the heat of the sun’ and the sizzling day seemed
quite long on 1st June to the poor folks.
The people habitual to say their five times prayers in mosques were
also found confused. The patients who had appointments with the doctors
also faced difficulties to get adjusted to the new ‘timings’.
All said and done, the people were of the view that every good thing is
not necessarily ‘good’ for every society since a society has to be brought to a
certain level of awareness before being introduced to an innovative idea.
However, it is also felt by some segments of the society that by extending the
time to another hour there will be an excessive hourly advantage for all those
who know how to make good use of their time in productive and positive
manner.
Shahab Ansari, The News, June 2, 2008
70 IPRI Factfile
I RAN CAN H ELP P AKISTAN IN E NERGY S ECTOR

Iranian Ambassador to Pakistan Mashallah Shakri has said his resource rich
country can help Pakistan address its energy crisis in the long run.
Talking to this correspondent here, he said Tehran can initiate
ventures with Pakistan other than the IPI (Iran-Pakistan-India) gas project to
help Islamabad overcome its power crisis.
He said there were many fields of mutual interest especially in the
culture, energy, shipping and trade sectors in which both the countries can
expand relations. He said Pakistan had good manpower for shipping industry
while Iran possessed good fleet and if the two countries formed a joint
shipping company it would help enhance trading in the shipping sector.
He said by expanding rail network, Pakistan could export its fruits,
especially orange and mangoes, to Turkey via Iraq.
He said Pakistan produced two million tons of good quality kinnos
that could be exported through rail network to Iran and Turkey.
Responding a question, he said both Pakistan and Iran were bounded
in centuries-old relations due to similarities in their cultural, religious and social
traditions.
He said with expansion of economic, trade and tourists activities these
relations could be further expanded and strengthened.
Dawn, June 3, 2008
http://www.dawn.com/2008/06/03/nat2.htm
SAARC M EMBERS A SKED TO S IGN E NERGY T REATY
Energy experts from Japan and member states of the South Asian Association
for Regional Cooperation (Saarc) Wednesday proposed the signing of an
‘Energy Charter Treaty’ to promote regional cooperation in energy sector.
In their recommendations on the conclusion of the two-day Japan-
SAARC Symposium on Energy and Connectivity, the participants said Japan
and Saarc member states should expedite energy cooperation in the region,
with greater sense of urgency, recognising the tremendous energy resource
potential, and vital role of energy in economic, social, human development and
poverty reduction.
They said the Saarc member states for this purpose should continue
to make use of the technical assistance from bilateral and multilateral sources
for capacity building, technology transfer, energy efficiency and specific
project formulation. Information on progress, technical know-how, needs,
barriers and possible solutions must be mutually shared by the states.
According to the experts, Japan and Saarc members should continue

the dialogue for possible means and cooperation to improve regional
connectivity in energy sector.
They said efforts should be made for fostering private and public
partnership, Research and Development; and cooperation with academics, civil
society and the media.
They were of the view that priority areas of energy cooperation in the
Saarc region included energy infrastructure development, regional trade of
energy, sharing of hydroelectric resources and demand-side management.
They stressed that the parties engaged in the current projects for
constructions of gas pipelines connecting one or more Saarc countries to
external energy sources in the region urgently address outstanding issues.
The participants said Japan and Saarc member should make efforts to
promote public awareness of the need for regional energy cooperation, adding
that programmes and activities of Saarc Energy Centre should be strongly
supported through provision of human, financial, infrastructural, technical and
material resources.
They said Saarc member states should consider establishing an inter-
governmental framework for implementing the agreed programme of action in
energy cooperation.
The symposium was jointly organised by the Institute of Strategic
Studies, Islamabad, and the Government of Japan, and was attended by the
energy experts and some government officials from Bangladesh, India, the
Maldives, Nepal, Pakistan, Sri Lanka, Japan and the Saarc Energy Centre, as
well as audiences invited from various sectors in Islamabad.
Speaking at the concluding session of the symposium, Ismail Qureshi,
secretary Water and Power, said that energy sources in Saarc region and its
neighbours were huge, unevenly distributed and undeveloped. Cross-border
investments in energy and promotion of regional energy trade are essential for
achieving economic growth of the Saarc countries. The factors curtailing such
regional cooperation are political tension, poor infrastructure and poor
operational efficiency, he added.
Dawn, June 12, 2008
S UBSIDY ON U SE OF UP TO 200 P OWER U NITS S TAYS

Minister for Water and Power Raja Pervaiz Ashraf on Monday said that the
government would not withdraw subsidy on electricity up to 200 units to give
relief to poor people.
Talking to journalists here, the minister said only the privileged class
using over 200 electricity units would share the burden while the deprived
72 IPRI Factfile
segment will be given subsidy. He said the country is facing severe power crisis
and the government was taking short, medium and long-term measures to
combat the menace of load-shedding.
He said load-shedding hours would be reduced within a few days as
1,500MW additional power has been added to the system due to sincere
efforts of the government to overcome the situation.
The minister added additional power generation has been achieved
through system optimisation. Pervaiz Ashraf said that Prime Minister Syed
Yousuf Raza Gilani has approved an amount to bear expenditures on oil
supply to thermal power plants for smooth functioning.
He said a major chunk of the export-oriented industry has been
exempted from load-shedding while power supply is also being increased to
other sectors. He added in order to give boost to the agriculture sector 10
hours continuous power supply is being provided at night to get maximum
production while the textile industry is also being provided 100 per cent supply
of power.
He said power-looms are also being provided continuous spells of
power to increase productivity, as this export-oriented industry is a major
contributor to foreign exchange reserves. The minister said sufficient amount
has been allocated in the budget for the water and power sector keeping in
view the increasing demand in these sectors.
He said due to the energy conservation plan additional power is being
received while the government is also planning to get electricity from
alternative and renewable energy resources. Earlier, in an open kutchery the
minister received applications from applicants and issued orders to the
concerned officials on the spot.
Addressing the party workers and applicants, the minister said
Pakistan Peoples Party’s government is committed to resolving the problems
of country’s people. He said government would change the life of common
man by giving basic amenities of life.
The News, June 17, 2008
L OAD SHEDDING B ECOMES A N IGHTMARE FOR K ARACHIITES

The Karachiites continue to suffer with prolonged power outage while riots
erupted in various areas on Tuesday.
The temperature of the City has increased up to 37C as Karachiites
suffered with sizzling heat till the evening and also faced unannounced load
shedding in several localities.
Inhabitants of various localities act violently against the KESC
officials and showed anger in many areas. In Lyari and Chakiwara, people
protested against KESC and burnt tyres on the roads. The Lyariites were
suffering with 12 to 15 hours long power outage due to some technical cable
faults in the area. The residents of FB Area, Shah Faisal Colony, Malir,
Liaquatabad, PECHS, Gulshan-e-Iqbal, FC Area, Akhtar Colony,
Mehmoodabad, Punjab Colony, DHA, and Gulistan-e-Johar also claimed of
suffering 10 to 12 hours long load shedding. Life has become a nightmare,
said Hassan Gul from Golden Town. "The frequent load shedding has not
only made our lives gloomy but has also disturbed the routine life. The worst
affected are children, especially toddlers. Even students are suffering as they
can't study for their ongoing examinations," he said.
The situation was synonymous with the conditions in Mansehra
Colony and Landhi. Khurram Amman, a resident, said that the entire locality,
comprising of over 50,000 residents, was facing three hours load shedding for
more than three times a day. "The entire locality belonged to middle class
people, living in small houses. Most of the houses have no proper ventilation
system thus load shedding brings severe problems for them," he said. "KESC
should pay more attention to the slums as people living in the City's affluent
areas can afford generators."
Furthermore, the power breakdowns didn't affect residents alone, but
also affected the workers of different industrial zones. "Most of the industrial
units were forced to leave workers early due to power disturbance. But
workers have been asked to come in on Sunday and thus they are paying the
price for KESC's bungles," Iqbal Khan, an electrician at a cloth mill in Site
Industrial Area said.
The total demand of electricity has reached to 2500MW in the city due
to the increasing temperature and KESC was lagging behind with 400 to
500MW. KESC had earlier announced five hours load shedding but
committing 8 to 9 hours load shedding in various localities. KESC could not
overcome the technical faults across the city and compelled the inhabitants to
come on roads in protest against power outage.
Meanwhile, two units of Bin Qasim power plant remained close due
to some technical faults and as far as restoration of supply from the units is
concerned it would take three to four more days while the supply from
KANNUP also couldn't be restored.
The Nation, June 18, 2008
online/Regional/Karachi/18-Jun-2008/Loadshedding-becomes-a-nightmare-for-
Karachiites
74 IPRI Factfile
S EVERE F UEL C RISIS HITS F RONTIER

Severe fuel crisis has hit the NWFP, as around 90 per cent of the filling
stations have been closed down due to the acute shortage of diesel.
The diesel shortage continued in the province for several days, forcing
most of the transporters to park their vehicles in their homes. Long queues of
vehicles were seen outside petrol pumps Wednesday to get a few litres of
diesel.
A few filling stations where the commodity was available in a limited
quantity, sold it at Rs60 per litre against its official price of Rs52.Transport
owners opined that the main cause of petroleum products shortage in the
province was massive smuggling of the POL product to Afghanistan where
minimum price of diesel is Rs75 per litre. The filling station owners have also
expressed serious concern over the shortage of POL, saying that it has
seriously affected their business.
The Sarhad Petroleum Cartage and Dealers Association Wednesday
voiced concern over petroleum products’ growing smuggling to Afghanistan,
saying 90 per cent of the filling stations have been closed down due to non-
availability of the petroleum products.
“The government pays huge amount to make the petroleum products
available on subsidised rates to compensate the poverty-stricken citizens but
the facility is not being availed by them after huge smuggling of subsidised
petroleum to Afghanistan,” SPCDA chairman Mansoor Sharif told a press
conference here.
He said the filling stations of Pakistan State Oil (PSO), Shell and
Caltex companies across the province have 2.5 million litres per-day
requirement. However, the growing smuggling to Afghanistan reduced receipt
of petroleum products to the oil companies to about 0.7 million litres.
He held the Khyber Agency political administration responsible for
the continued smuggling of petroleum products to Afghanistan, which, he
said, allowed the smugglers to take the product across the border.
Mansoor also said the previous government had issued marketing
licences to ‘ghost companies’ which had no storage depot and proper offices.
“These ghost companies get fuel on fake invoices and smuggle it through their
agents, therefore, the government should take action against such companies,”
he urged.
He said the owners of the filling stations were faced with multiple
problems and worried about the future of their multi-millions businesses. He
called upon NWFP governor, chief minister and political administration to
take serious note of the fuel smuggling to Afghanistan via Khyber Agency to
ensure availability of its required quantity in the filling stations.
Qaiser Khan Afridi, The News, June 19, 2008
S HORTAGE OF F UEL AT P ETROL P UMPS C AUSING C ONCERN

There was a shortage of petrol and diesel at various petrol pumps in the city
on Thursday. Petrol pump officials said the reason for the shortage was that
they were not receiving any supplies. A Cavalry Grounds petrol pump
employee said that a shortage was persisting and therefore supplies to end
users were not materialising. The petrol pumps in Cavalry Grounds, Garden
Town, Model Town and other areas closed operations temporarily. Punjab
Petroleum Dealers Association President Majeed Malik said that oil companies
had reduced supplies to dealers and it was causing problems. He said that the
government owed billions of rupees to the oil companies and this had created
problems for the end users. “The oil companies have reduced supplies by 50
percent, as they claim that they have not been paid for their product,” he
added. Majeed said that the government should come to the aid of users
otherwise the shortage could cause huge problems for the people.
Daily Time, June 20, 2008
2008_pg13_5
S HORTAGE OF P ETROL P RODUCTS T ORMENTING

C ONSUMERS
Several petrol pumps, affiliated with different Oil Marketing Companies
(OMCs), have stopped selling oil products in the city due to the shortage of
supply since the last couple of days.
The shortages of oil products at petrol pumps have caused consumers
to suffer, particularly in those areas where the petrol pumps are in limited
numbers. Besides Karachi, the supply shortage has been reported in other
cities of Sindh and NWFP.
Many petroleum dealers said that they have not been receiving oil
products from OMCs since last week that created petroleum shortage at the
pumps. They were reluctant to provide any details on this issue and passed
blamed the OMCs.
A couple of weeks earlier, President Petroleum Dealers Association
Abdul Sami Khan had already warned the possible shortage at several petrol
pumps as according to him, the OMCs were not providing them enhanced
products' when the demand was high.
Some dealers also warned that their oil stocks have been diminished
and left for a couple of days. The supply should be resumed by the OMCs
because the demand of diesel and petrol has surged on the petrol pumps on
the back of shutting of other outlets and enhanced usage in power generators.
76 IPRI Factfile
Normally, petrol pumps have a storage capacity of 20 to 25 days in

the oil tanks.
However, the shortage has been predicated to continue in the coming
days because OMCs, particularly Pakistan State Oil (PSO), claimed that they
have been facing diesel supply constraints from refineries.
PSO said that private run-pump owners or dealers affiliated with
other OMCs have been demanding oil products to the state-run OMC that
caused supply shortage even on its own petrol pumps. It said the share of PSO
has increased to 71 percent of the total market share in June as compared to
last month's share recorded at 59 percent.
The supply from refineries has been reduced in the past few days that
caused interruption in supply chain and would take time to come back on
track, an official said on condition of anonymity.
Spokesman of Shell Pakistan Limited (SPL) Abid Syed Ibrahim said
the OMCs continue constant supply to its affiliated dealers throughout the
country and it has stopped products' supply to those dealers who did not clear
their advance payments to OMCs.
Muhammad Yasir, Daily Times, June 22, 2008
2008_pg5_4
N O E ND TO E LECTRICITY M ETER S HORTAGE

Shortage of domestic electricity metres continued in the provincial capital as
the management of Lahore Electric Supply Company (LESCO) failed to
procure the most necessary item on time.
Sources in the company claimed that more than 30,000 applications
for the issuance of new electricity metres were pending with the company.
Sources said the shortage was a direct result of lack of vision and future
planning of the management especially the high-ups.
Sources said that the shortage of domestic metres, electricity cable and
transformers started some five months back and since then the company was
failed to procure these most necessary items. Shortage of these items clearly
exposed the claims of the LESCO that it was investing a huge sum on
improving its infrastructure and better customer services for the last two years.
The shortage of metres has created serious inconvenience to those
who have deposited their money to the LESCO for replacement of metres or
for getting new connections. A number of complainants termed the shortage a
criminal negligence on part of the company. They said the LESCO was already
known for disturbing its consumers in one way or the other and presently the
general perception of the people about the company was that the officer class
of the company was not purchasing metres and transformers because they
have not gotten a ‘good deal’ from the manufacturers.
Most of the applicants urged the National Electric Power Regulatory
Authority (NEPRA), Pakistan Electric Power Company (PEPCO) and Federal
Minister for Water and Power to hold an inquiry into the issue.
Whoever is responsible for this should be punished, said Khurram, a
resident of Faisal Town. He said he applied for a new connection some three
months back but still he was going to the sub division every day to get a metre.
He said many others were also running pillar to post to get new metres in the
same sub division.
Following the shortage, the LESCO field staff is openly exploiting the
applicants and minting money from them for getting them metres early. A
senior LESCO official, on the condition of anonymity, said that every sub-
division needed average 500 electricity metres per month but presently the
company was providing them with four to five metres per week.When
contacted, the call on the mobile phone of LESCO Chief Executive Akram
Arain was not attended. The company’s PRO admitted that the shortage was
going on. He said it would be overcome within weeks.
P ESHAWAR T RANSPORTERS T HREATEN TO B ESIEGE O IL

D EPOTS
Transporters claim pumps are selling the commodity at R s65/liter
Local transporters Monday threatened to besiege oil depots and filling stations
in Peshawar if the authorities failed to take prompt and effective measures to
overcome the prolonged “artificial” diesel crisis in the province.
Expressing his concern over the continued diesel shortage in the
province, president of public transport owners association (legal) Haji
Ihsanullah said 50% of the transport-vehicle owners have parked their vehicles
in their homes due to prevailing shortage. He added the petrol pump owners
were fleecing by selling the commodity to them at Rs 65 per liter against its
official price of Rs 50, while the authorities were taking no action against
them.
Haji alleged the pump owners had a daily quota of getting 10,000 liters
of diesel, but they were purchasing only 4000 and selling the remaining quota
to the depots that smuggle it to Afghanistan, where per liter price of the
commodity is Rs 75.
Jehangir Afridi, another leader of local transporters, said the diesel
smuggling to Afghanistan was continued unabated without any check on it. He
78 IPRI Factfile
lamented the increase in the price of CNG, saying despite the fact that CNG
was produced in the country, its price was showing upward trend.
He demanded of the authorities to take effective measures to control
smuggling, otherwise, they would be compelled to besiege the petrol pumps
and oil depots and the authorities would be responsible for consequences.
It merits a mention here that Frontier was faced with acute shortage
of diesel for the past two weeks. The vehicle owners had to struggle hard to
get some liters of the commodity on higher price.
Abdur Rasheed, a private car owner, said he visited more than ten
pumps to get some diesel, where he was told that it was not available. At last in
one of the pumps, the owner agreed to give limited quantity at Rs 60/liter
while its official price was Rs 50. Due to diesel crisis and unofficial increase in
its price, the long route transporters have also increased fares, adding to the
miseries of the commuters.
D IESEL S HORTAGE A FFECTING O PERATION OF T UBE -

W ELLS , T RACTORS : F ARMERS
The farmers are facing problems in running tube wells and tractors due to the
shortage of diesel, Daily Times learnt Thursday.
The shortage of diesel mainly persists in Punjab province as the oil
companies have stopped the supply of diesel to the petrol pumps, while the
shortage would have a negative impact on the sowing of rice and cotton crops,
the agriculture sector stakeholders said.
The sowing of rice is round the corner while cotton sowing is already
going on in a number of districts. An extreme shortage of diesel was also
witnessed in cotton growing areas of Southern Punjab in the last couple of
days.
A spokesman of Farmers Association of Pakistan (FAP), Idrees
Khokhar said the hoarders have done an artificial shortage of diesel to force
the government to increase the prices of petroleum products and a summary
has already been placed on the table of prime minister for approval.
“The farmers of Punjab were the main affectees due to the shortage
of diesel and non-availability of diesel has shut down more than 0.7 million
tube-wells while 0.5 million tractors have stopped”.
He said the government should look into the matter otherwise the
farmers will fail to continue their cultivation and the country may face shortage
of every kind of crop, especially rice and wheat.
Chairman Agri Forum, Ibrahim Mughal said if the government failed

to solve shortage of diesel issue, the farmers would fail to sow the rice in the
coming sowing season.
It is sowing season of cotton in the southern Punjab areas and these
two things are the backbone of agriculture farming and if these are not
available then one can easily imagine what would be the future of crops.
The senior vice president of Punjab Petroleum Dealers Association,
Chaudhry Muhammad Sadiq said the oil companies have stopped the supply
of diesel to the petrol pumps.
He said the companies have strictly asked the owners of petrol pumps
and dealers not to give diesel in drums and gallons, while the companies have
also supply the diesel against the demand of the pump owners.
Hasan Ali, Daily Time, June 27, 2008
2008_pg5_3
L OAD S HEDDING I NCREASES AS KANUPP T RIPS A GAIN

The duration of load shedding suddenly increased from Wednesday night after
the Karachi Nuclear Power Plant (KANUPP) suddenly tripped.
Flaws in the Karachi Electric Supply Company (KESC) transmission
cables connected to KANUPP through the national grid caused the 80MW
shortage. There was an additional shortage of 300 MW to 350 MW the same
day.
The Pakistan Electric Power Company (PEPCO) is also experiencing
some technical problems in its generation system, causing a shortage, a KESC
general manager (GM) told Daily Times. “The PEPCO administration
approached KESC with a request to accept a shortage of 100 MW for the time
because of technical problems but the KESC management declined to accept
this excuse.”
The supply from PEPCO continued at 500 MW without any
disruption till 11:00 a.m. Wednesday, until a shortage of 100 MW at around
1:00 p.m. However, KANUPP resumed its supply of 70 MW to KESC
through the national grid by 10:30 p.m., Wednesday, described the GM.
KANUPP tripped on May 19, 2008 as well for the same reason. There have
been eight such incidents since January and last year it happened 11 times.
“KANUPP had planned to increase its contribution, taking it to a peak of 90
MW in a few days, but the recent tripping has made this doubtful,” the KESC
GM said.
Reports from a private television channel late night Thursday said that
two units at the Bin Qasim Thermal Power Plant had tripped due to a gas
80 IPRI Factfile
turbine leak. These reports are, however, incorrect as all six BQTPS are
operating and generating around 1,050 MW, the KESC GM added.
Daily Times, June 27, 2008
2008_pg7_27
F UEL S TATIONS R UN S HORT OF D IESEL

Fuel stations have run short of diesel, putting motorists in a fix. A few
stations, which have this commodity, are selling it only if a consumer agrees to
buy mobile oil with it.
“Diesel is available only at 15-20 percent fuel stations but their owners
are compelling motorists to buy mobile oil or any other commodity if they
have to get diesel,” Hanif Gujjar, a public transport driver, told Daily Times
on Friday.
There are around 24 fuel stations in Islamabad and over 50 in
Rawalpindi, where diesel is sold.
“It is really difficult to get diesel these days so I have minimised use of
fuel in my car. Diesel shortage has been prevailing since revision of oil prices
by OGRA last time,” a motorist said.
Akbar Mian, manager of a fuel station in F-8 Markaz, said diesel
supply at his station had come down from 14,000 litre to 7,000 litre a day.
“Diesel supply has been cut by half at Sihala and Chaklala for the last
two weeks by oil marketing companies,” he said. Ghulam Abbas, a worker at a
petrol pump in Sector F-7, said diesel supply had been delayed for long.
Requesting not to be named, some fuel station operators said the
government wanted to buy diesel from oil marketing companies at old rates
while fuel prices have gone up in the international market.
They said the government had delayed payment of billions of rupees
to oil companies.
“We want to install a diesel generator in the face of load shedding but
we cannot run it because of diesel shortage,” said a citizen.
Sale of petroleum products in open containers has been banned by
the government to counter terrorism.
Atif Khan, Daily Time, June 28, 2008
2008_pg11_11
F REQUENT P OWER S HUTDOWNS B RINGING G RADES D OWN

* Students say they cannot study properly in dim light
* PU boarder says weather problems increase when there is no water
* Teachers say relief being given to students following power crisis
* Computer labs at GCU and LCWU closed down during load shedding
* Students not expecting good results owing to poor preparation
The hours-long load shedding in the city is giving a tough time to students,
especially schoolchildren, during the ongoing examinations.
Students said that massive load shedding in the last few months had
adversely affected their studies. They said that they could not study properly in
the dim light and under hot and humid weather, as it gave them a headache
and had affected their eyesight. Some students also said that their
schools/colleges had power backup systems, but the systems were not being
used. They said that they had been compelled to take classes and sit in
examinations with no electricity in the rooms.
Students enrolled in semester system courses, especially those
studying computers and other sciences, said that they had an extra burden of
studies owing to the semester system. They said that they had to make
presentations and submit term reports and assignments, which was impossible
with no electricity in town. Teachers also said that they had problems giving
lectures during load shedding.
The students of intermediate, preparing for their practicals, and others
for the Pakistan Military Academy (PMA) and Central Superior Services (CSS)
examinations have also denounced the Water and Power Development
Authority (WAPDA) and the government for not complying with the
students’ demand of uninterrupted supply of electricity.
A number of institutions in the city did not give summer holidays to
their students, as they had switched to the semester systems and were
conducting examinations. Institutes like the Lahore College for Women
University (LCWU), Government College University (GCU), Forman
Christian College University (FCCU), and the Punjab University (PU) are still
open and holding exams. Moreover, the students of Kinnaird College,
Beaconhouse National University and FAST National University of Computer
and Emerging Sciences are still due at the institutes for their assignments and
research works.
Zara, a student of BS (Honours) at the LCWU, said that semester
examinations were ongoing at different departments of the university, and
usually there was no electricity during the examination. “It becomes difficult to
sit in the examination rooms due to the heat and poor light, but we cannot do
anything about it,” she said, adding that there were no power generators at the
university to facilitate the student. She said that students were also having
trouble preparing for the exams, as they could not frame a proper timetable
for studies owing to unplanned and massive load shedding.
Water shortage: Jawaria Ahmed, a PU Hostels boarder, said that
students had no choice but prepare for their exams in candlelight during load-
82 IPRI Factfile
shedding hours. “The situation gets worse when the hostels run out of water,
as we are not allowed to go out in the nighttime,” she said.
Adeel Anjum, a Ravian studying computer sciences, said that students
in his department did most of their work on computers, but the administration
of the GCU had issued orders to close the computer labs at the time of load
shedding. “We have to prepare our assignments and need the Internet for that,
but now the computer labs are often closed due to the load shedding and we
have to suffer,” he said, adding that late submission of assignments was also
affecting their grades.
Tayyab Bhatti, preparing for his CSS exams, said that students taking
the exams usually went to libraries for preparations, but now it had become
difficult for them to focus on their studies due to frequent power failure as
they could not sit in libraries for long hours without electricity and cooling
system.
Facilitating students: BNU Communication Adviser Arfa Sarfraz said,
“Although we have closed the university for summer holidays, students who
have not submitted their research work are still coming,” she said, adding that
every second student had the excuse that he/she could not complete the
research work due to load shedding. “I personally believe that students are
suffering the most due to the energy crises.”
Khansa Nazim, an LCWU faculty member, said, “The administration
knows that students are disturbed due to load shedding. We have kept this
thing in mind before setting up question papers,” she said. She said that
teachers had also been suffering for the last many months because they usually
used projectors to deliver lectures, which they could not do properly at the
time of load shedding.
Another teacher at the university said that the authorities there too
had directed the computers and science departments to shut down computer
labs and laboratories during load shedding out of fear of getting equipment
damaged.
Expectations not high: Asim Khan, a GCU student, said that power
failure had always been a problem for students, and that thousands of students
in the city had taken their matriculation, intermediate, and bachelor
examinations during load-shedding hours. He said that students could not
prepare for their exams properly, due to which they were not expecting good
results.
He said that the graph of quality education might fall due to energy
crises. “Neither the students, nor the teachers are satisfied with their
progress,” he said.
An official of the Lahore College of Arts and Sciences (LACAS) said
that students there had suffered a lot during examination days due to frequent
power shutdowns. He said that parents were concerned about the progress of
their children. “They have complained that students are unable to concentrate
on their studies due to hot and humid weather conditions,” he said. He said
that the school administration was trying to remove the parents’ concern by
installing UPS systems and generators at various branches of LACAS.
Adnan Lodhi, Daily Times, June 28, 2008
2008_pg13_9
N EW E NERGY O RDER
BY bringing together the world’s major oil producers and consumers in
Jeddah, Saudi Arabia marked a turning point in the negotiations for a new
global energy order that is emerging under the weight of soaring oil prices,
which are driven by factors other than supply and demand.
“It could be asked whether the 140 dollars per barrel price can be
negotiated between Opec (Organisation of Petroleum Exporting Countries),
the new actor, which is global capital, and the governments of the Group of
Eight (industrial powers),” Víctor Poleo, a Venezuelan professor of graduate
studies in the oil economy, commented to IPS.
On Thursday, crude oil prices broke through the 140-dollar a barrel
barrier for the first time. The price of oil “can no longer be dictated by Opec,
because a significant portion of the price would seem to obey market laws that
are not its own,” said Poleo.
Saudi Arabia perceives “the beginning of a transition stage to a new
power order in the world energy system,” he added. In Poleo’s view, “the
global energy system is witnessing the emergence of a new order. In the old
one, under Opec, the level of prices hovered around 70 dollars a barrel; in the
new system, the increase is of the same magnitude,” and the decisions taken by
Saudi Arabia “form part of the new talks.”
The informal June 22 meeting of representatives of governments and
the major oil companies in the Saudi Arabian city of Jeddah called for more
investment in crude production, as well as greater transparency in oil markets,
where futures trading is helping to drive prices up. Producer and consumer
nations and companies will meet again in Madrid next week, at the 19th World
Petroleum Congress, and in late 2008 in London.
Spain’s Minister of Trade and Industry Miguel Sebastián said that
“after enjoying 15 years of low prices, our economies have become addicted to
oil, and the world is not prepared for the challenge of a steady rise in prices.”
Opec is made up of Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait,
Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela,
which account for over 75 per cent of global proven oil reserves.
Referring to the Jeddah meet, the Caracas newspaper El Nacional
pointed out that the “father of Opec”, Venezuelan lawyer Juan Pablo Pérez
84 IPRI Factfile
Alfonzo, proposed half a century ago the creation of an organisation of

producers and consumers that would regulate the world oil market.
The corporations that controlled the oil business, known back then as
the “seven sisters”, scorned the proposal, and Saudi Arabia, Iran, Iraq, Kuwait
and Venezuela went on to found Opec in 1960 in Baghdad.
At the time, Venezuela was the world’s leading oil exporter, a position
that was taken over and has been held for decades by Saudi Arabia, which sent
from Jeddah a message to its fellow Opec members that it will not favour a
rise in prices, as indicated by its unilateral decision to boost output from 9.5 to
9.7 million barrels a day as of July.
Meanwhile, Shokri Ghanem, the head of Libya’s National Oil
Corporation, said his country was studying the possibility of cutting output to
protest a bill under debate in the US Congress that would empower the Justice
Department to sue Opec members for limiting oil supplies.
Libya is also fighting a US law that allows the families of victims of
state-sponsored terrorism to go to court and seek the seizure, as punitive
damages and compensation, of any asset owned by the terrorist-sponsoring
country, or of money from those governments that is held by US companies
doing business with them. These remarks pushed prices up to a record high
above 142 dollars a barrel by Friday.
Opec Secretary General Abdalla Salem el-Badri said the organisation
planned to invest 160 billion dollars over the next five years to raise
production by five million barrels a day. The members presently pump 32
million barrels a day, while global demand amounts to 86 million barrels.
US economist Joseph Stiglitz, winner of the 2001 Nobel Prize for
economics, wrote earlier this month that “Only new patterns of consumption
and production — a new economic model — can address that most
fundamental resource problem. “Two factors set off today’s crisis: the Iraq
war contributed to the run up in oil prices, while biofuels have meant that
food and energy markets are increasingly integrated,” he added.
The big oil companies, in the meantime, are raking in tens of billions
of dollars each. With these profits, said Poleo, global capital is financing its
positioning with regard to the shifts occurring in the global energy scenario.
The price bubble continues to swell, to the benefit of these
interests, although analysts say oil prices will inevitably come down.
Humberto Márquez, Dawn, June 30, 2008
http://www.dawn.com/2008/06/30/op.htm#top
P OWER P LANTS T OP G AS S UPPLY P RIORITY L IST

The government has decided to give priority to the power sector in allocation
of fresh gas supplies in view of the continuous rise in the oil import bill and
the resultant increase in power tariffs.
Sources told Dawn that the decision was taken recently by the
Economic Coordination Committee of the cabinet because of the increasing
dependence on imported furnace oil for power generation and little progress
made in the development of water and coal-based projects.
Pakistan had to pay about $13 billion on account of oil imports during
the last financial year, and it is estimated to keep rising because of record oil
prices in the international market. The government understands that if fresh
gas arrivals are not dedicated to the power sector the oil import bill could
touch $20 billion this financial year.
As a result, fresh gas supplies from new fields will not be available for
domestic and commercial consumers. Under the existing petroleum policy,
domestic and commercial consumers get the first priority, followed by fertiliser
plants. Next on the priority list are gas supplies for independent power
producers and gas utilities which have historic agreements for firm supplies,
followed by the general industrial sector and compressed natural gas (CNG)
stations.
Wapda, KESC and captive power plants, which did not have firm gas
supply commitments, used to be on the fifth position and the cement sector
was the last on the list.
The first priority now will be the power sector whenever gas supplies
are available from new fields.
Likewise, gas from new fields which are not linked to the national
transmission system is supplied to the fertiliser sector as a priority, followed by
power companies having firm gas sale agreements. In this case too, the first
priority will now be given to power plants.
At present, the power sector is the largest user of gas, accounting for a
33.5 per cent share, followed by the industrial sector with 23.8 per cent,
households 18 per cent, fertiliser 15.6 per cent, transport 5.4 per cent and
cement 0.9 per cent.
Last year, consumption of gas in the transport sector increased by 28
per cent, household consumption grew by12 per cent and fertiliser 3.5 per
cent.
Consumption in the power sector declined by about 1.2 per cent as
the previous government concentrated on providing gas connections to the
domestic sector and promoting CNG for transport.
86 IPRI Factfile
Now the government is trying to put the CNG in the back seat along
with the domestic sector to make sure that maximum supplies are made
available for po0wer generation.
Khaleeq Kiani, Dawn, July 10, 2008
R ESOLVING P OWER C RISIS A P RIORITY

The coalition government has undertaken a series of initiatives to steer the
country out of the debilitating power crisis and the country will overcome
electricity shortage within a couple of years.
In his first interaction with the ethnic media at the High Commission
on Tuesday, the newly-appointed Pakistan High Commissioner Wajid Shamsul
Hasan said the government was attaching top priority to resolving the power
crisis.
He recalled that during the last government of Benazir Bhutto, the
PPP government had invested $5 billion in the power sector, leading to the
addition of 4,000 megawatts to the national grid.
Mr Hasan said since then not a single megawatt had been added to the
grid which, according to him, had led to the present crisis.
He blamed former senator Saif-ur-Rehman for hounding out the
foreign investors who were willing to invest further in the power sector in
Pakistan.
On the exploration of Thar coal, he said during the rule of the last
government, a Chinese company had written some 60 letters to the petroleum
ministry but when no response was received, it withdrew from the country.
Dawn, July 10, 2008
A UTHORITY S ET U P FOR T HAR C OAL M INING

The federal government has set up a provincial coal authority by abolishing
two federal and provincial agencies to expedite mining and development of
Thar and other coal deposits in Sindh.
A formal notification to this effect has been issued by the Prime
Minister’s Secretariat, technically empowering the provincial government to
take all decisions relating to coal development and power generation in
consultation with provincial and federal agencies.
Headed by Sindh chief minister, the authority will comprise the
federal minister and secretary of water and power, a provincial minister, Sindh
chief secretary and the managing director of the Thar Coal Authority.
The authority came into being after the abolition of the Sindh Coal
Authority (SCA), a provincial agency, and Thar Coal Mining Company, a joint
venture of federal and Sindh governments.
The authority will function as one-stop organisation on behalf of all
ministries, departments and agencies of the federal and provincial
governments for mining, development, leasing and sub-leasing of Thar coal
area. It will also be responsible for development of clean coal technologies,
research and development and gasification.
The authority will also be required to attract investment for coal
mining and gasification in Thar and other areas in province for power
generation.
A senior government official told Dawn that the federal government
had “handed over” the development of Thar coal project to the Sindh
government, mainly to expedite the setting up of a 1000MW coal-fired power
plant.
He said hurdle delaying the project had been removed with the centre
agreeing to a “supporting role” for itself in the $1.5 billion project and letting
the Sindh administration “spearhead” and sort out all issues relating to the
project.
He said the mining of Thar coal would cost $400 million and the
power plant $1.1 billion. It will be an integrated power plant which will
generate its first megawatt in six years. He regretted that the project could not
be set up by the RWE company of Germany, Shenhua of China and Hasan
Associated of Pakistan because they were demanding a tariff which kept on
increasing from 5 cents to 9 cents for the development of each megawatt and
that too without having any back-up data relating to the project.
Ihtasham ul Haque, July 10, 2008

Nergy Risis in Akistan: E D N H

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Energy Crisis in Pakistan 1

E NERGY C RISIS IN P AKISTAN

33. Entangled in Energy Web 51

Pakistan is presently facing a serious energy crisis. Despite strong economic

All possible measures need to be adopted, i.e., to conserve energy at

July 10, 2008. Noor ul Haq

P AKISTAN : P OWER C RISIS F EARED BY 2007

They said the power generation projects, which are due to

M AJOR E NERGY C RISIS F EARED

However, the gas-based power expansion of about 4,860MW would

P AKISTAN ’ S Q UEST FOR E NERGY S ECURITY

consumption of natural gas is projected to increase by nearly 70 percent

W ASTE TO E NERGY IS N EEDED IN P AKISTAN

recharge area. While in developed countries, landfills are now bracketed as

Energy can be differentiated as

For converting thermal energy to electrical energy alternators are used

Total Rs. 3.40

9. Wild life and fish study

Pakistan is facing acute shortage of energy. with 7% increase of its economy

The first requirement of conducting feasibility study is to install a

Geological, seismic, tectonic and environmental studies will be

WIND ENERGY BASICS

So the solution is not so simple. Renewable yes. The hurdles should

P AKISTAN C OAL R ESERVES S HOULD BE E XPLORED

P AKISTAN I RAN A GREE ON G AS P IPE L INE P ROJECT

Iran wants quick decision for Gas Pipe

ECNEC A PPROVES E NERGY P ROJECTS

E NERGY C RISIS IN P AKISTAN - I

maximum time of the day.

The strategy should be to explore indigenous local resources. For

E NERGY C RISIS IN P AKISTAN - II

P AKISTAN ' S E NERGY C RISIS TO W ORSEN IN N EXT T WO

Another official, quoted by the report, said that the development of

W IND P OWER : A S OLUTION TO E NERGY C RISIS

TO encourage private investment in

As Pakistan’s energy needs are immediate , thermal and large hydro-

Third,, thermal power tariff is vulnerable to spikes in oil prices similar

E NERGY C RISIS M AY G O FROM B AD TO W ORSE

A SIAN D EVELOPMENT B ANK C ONSIDERING 250 M ILLION $

US A DVISE P AKISTAN T O P URCHASE E LECTRICITY F ROM

Pakistan should have a fair treatment to explore all possible energy

Updated 9th November 2007

have to go for lengthy processes. The government should invest substantial

Updated on 3rd November 2007

Meantime power shortage in whole country remained forcing the

P AKISTAN U RGED TO I MPORT 4,000MW FROM CAR S

F UEL S HORTAGE M AY W ORSEN P OWER S ITUATION

E NERGY C RISIS : S ERIOUS AND W ORSENING

E NERGY C RISIS IN P AKISTAN ARE G ROWING R APIDLY

policies and insufficient public-sector investment that [has] contributed to

E FFICIENT H OUSEHOLD A PPLIANCES TO M ITIGATE E NERGY

sector industries to enhance the efficiencies of different energy consuming

The decision to this effect was taken at a meeting chaired by EDB

C OPING WITH THE E NERGY C RISIS

all-time-highs, shooting 40% in the past year. The undeniable reality is

The last few years provide a perfect example of failure to make a

board, rather in processions. It has to be realised that the delay in project

I RANIAN , P AKISTANI PRESIDENTS RESOLVE PIPLINE ISSUES

Iranian President Mahmoud Ahmadinejad and his Pakistani counterpart

T IES WITH I RAN

The decision reached in Islamabad on Monday between the visiting Iranian

P OWER C RISIS & A LTERNATE E NERGY T ECHNOLOGY

http://pakobserver.net/200804/17/Articles03.asp is a cheaper and with