Professional Documents
Culture Documents
UL
H AQ
A SSISTANT E DITOR
K HALID H USSAIN
IPRI Factfile
C ONTENTS
Preface
1. Pakistan: Power Crisis Feared by 2007
2. Major Energy Crisis Feared
3. Pakistans Quest for Energy Security
4. Waste to Energy is Needed in Pakistan
5. Type of Energy
6. Thermal Energy
7. Hydel Energy
8. Wind Energy
9. Rising Oil Prices
10. Pakistan Coal Reserves be Explored
11. Pakistan Iran Agree on Gas Pipeline Project
12. ECNEC Approves Energy Projects
13. Energy Crisis in Pakistan-I
14. Energy Crisis in Pakistan-II
15. Pakistan's Energy Crisis to Worsen in Next Two Year
16. Wind Power: Solution to Energy Crisis
17. Energy Crisis may go from Bad to Worse
18. Asian Development Bank Considering Loan for Small Hydro Projects
19. US Advise Pakistan to Purchase Electricity from Central Asia
20. Energy Strategy
21. Pakistan Urged to Import 4,000MW from CARs
22. Fuel Shortage may Worsen Power Situation
23. Energy Crisis: Serious and Worsening
24. Energy Crisis in Pakistan is Growing Rapidly
25. Efficient Household Appliances to Mitigate Energy Crisis
26. Coping with the Energy Crisis
27. Iranian, Pakistani Presidents Resolve Pipeline Issues
28. Ties with Iran
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P REFACE
Noor ul Haq
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.
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P AKISTAN S Q UEST
FOR
E NERGY S ECURITY
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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 Pakistans 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. Pakistans
government is working on plans to build an Iran-Pakistan-India (IPI) pipeline
that spans from Irans massive reserves to Indian markets across Pakistani
territory. Russias 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. Islamabads 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 pipelines 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 IndiaGulf-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
Beijings dependence on the Malacca Straits. Pakistan also wants to set up a
crude transit route through Gwader Port for Beijings 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 its 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
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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 Pakistans 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-toenergy 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-toenergy 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
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10
T YPES
OF
E NERGY
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.
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12
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.
10.
11.
12.
13.
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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
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Denmark (27.9%)
GE Wind, US (17.7%)
Enercon,Germany (13.2%)
Gamesa, Spain (12.9%)
Suzlon, India (6.1%)
Siemens, Denmark (5.5%)
Repower, Germany (3.1%)
Nordex, Germany (2.6%)
Ecotecnia, Spain (2.1%)
Mitsubishi, Japan (2.0%)
15
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 $. OPEC promised to raise its out put but with out any
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significant effect. for the time being the prices were dipped but risen again on
much higher values.
The winter is just arriving and nobody knows that these prices will
settle at what level.
Rising tension between US and Iran is one reason. Some sources are
predicting the attack on Iran is imminent. If the condition continues like this
who is going to be benefited.
Emerging economies and developing will suffer most. Their economy
is dependent on energy resources. how can survive and how can they meet
their production commitments.
In recent months oil surged from 70$ 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.
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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
ON
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.
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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
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 throughout 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
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E NERGY C RISIS
21
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.
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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.
Pakistans 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
IN
N EXT T WO
23
TO
E NERGY C RISIS
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As Pakistans energy needs are immediate , thermal and large hydroelectric 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! Its 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, Pakistans 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 oilfired power plants which will help reduce the current account deficit.
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26
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.
27
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
IPRI Factfile
28
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
29
IPRI Factfile
30
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 Pakistans 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.
31
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
Pakistans 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.
Pakistans 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 countrys 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, a little lower than World Banks 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.
This would leave a total deficit of about nine million tons of diesel
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
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.
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 supplydemand gap would rapidly increase as demand is expected to grow
continuously, quadrupling in 2025.
Khaleeq Kiani, Dawn, November 17, 2007
http://www.dawn.com/2007/11/17/ebr4.htm
33
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
http://www.dawn.com/2008/01/01/top11.htm
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 countrys strategic oil reserves at
a precarious level clearly exposed the governments 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
countrys 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, Pakistans 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 years 54 MTOE. And since at least four out of five
35
major initiatives, originally planned for meeting this demand, are uncertain at
present or significantly behind schedule, the shortage estimate could be
anybodys 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 others problems. Natural gas, power, and
oil shortages were all posing risks to the economic growth in medium to longterm 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 countrys energy consumption, would increase by 44 per
cent to 39MTOE from 27MTOE currently. The government had planned to
add an overall power generation capacity of about 7,880MW by 2010. Of this,
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.
Partly contributed by gas shortfalls, the power shortage is expected to
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.
This would leave a total deficit of about nine million tons of diesel
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
http://www.dawn.com/2008/01/07/ebr2.htm
E NERGY C RISIS
IN
P AKISTAN
ARE
G ROWING R APIDLY
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, Pakistans economy is growing; thats the good news. The bad
news is that with this growth comes higher energy consumption and greater
pressure on the countrys energy resources. Unless Pakistanis the
government, but individual citizens as well act now, the countrys 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, Pakistans energy situation is expected to get far worse
in the years ahead.
According to the governments 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 Pakistans
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 countrys finances. While the present
situation with respect to natural gas production is not nearly as critical,
Pakistans 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 Pakistans
energy needs. Pakistans proven coal reserves are the worlds sixth largest,
and the government intends to increase the share of coal in the overall energy
37
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 governments 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 Pakistans 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 countrys 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.
Pakistans 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 countrys
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
governments 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. Pakistans neighbours have
something to teach Pakistan, if only it will listen.
Pakistans minister for petroleum and natural resources has identified
energy as the most important input for the countrys economic development.
The uninterrupted supply of energy to fuel the nations economy, he has
declared, should be the highest priority for the countrys economic managers.
Yet the record of past governments does not induce
confidence. It's said by one of Pakistans 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
IPRI Factfile
38
TO
M ITIGATE E NERGY
39
IPRI Factfile
40
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
41
42
IPRI Factfile
43
I RANIAN , P AKISTANI
IPRI Factfile
44
T IES
WITH I RAN
45
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 countrys 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 PPPPs 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 countrys
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 Pakistans 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
countrys 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,
47
TO
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
49
IPRI Factfile
50
G OVT
TO I NVITE
B USINESSMEN
TO
E NTANGLED
51
IN
E NERGY W EB
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, oilproducing 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
53
IPRI Factfile
54
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-englishonline/Business/12-May-2008/Entangled-in-energy-web/1
M EETING H ELD
TO
55
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
TO
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 governments import bill, which was going up with every passing
day due to high oil prices in the international market.
56
IPRI Factfile
57
TO
58
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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).
The News, May 21, 2008
http://www.thenews.com.pk/daily_detail.asp?id=113882
59
TO
C OUNTER E NERGY
IPRI Factfile
60
OF
C ONSPIRACY
61
energy from them, but it will take political will on part of our government as
well as politicians to invest in for the countrys 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 Pakistans water resources that United States and India spoiling
Pakistans water resources they dont wont 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
Pakistans attention towards major issues related to energy and India
committing itself to theft Pakistans 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 hasnt been A SINGLE MEGAWATT increase
in generation capacity.
IPRI Factfile
62
TO
63
G OVT
TO
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
IPRI Factfile
64
TO
S AVE
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.
65
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 onethird 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 worlds 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 worlds 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 governments
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
67
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 countrys 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
IPRI Factfile
68
A DVANCING
OF
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-stepcampaign 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.
69
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 Boards 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
http://www.thenews.com.pk/daily_detail.asp?id=116166
IPRI Factfile
70
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
TO
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 JapanSAARC 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.
71
S UBSIDY
ON
U SE
OF
UP
TO
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
IPRI Factfile
72
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 Partys government is committed to resolving the problems
of countrys people. He said government would change the life of common
man by giving basic amenities of life.
The News, June 17, 2008
http://www.thenews.com.pk/daily_detail.asp?id=118835
L OAD
SHEDDING
B ECOMES
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
73
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
http://www.nation.com.pk/pakistan-news-newspaper-daily-englishonline/Regional/Karachi/18-Jun-2008/Loadshedding-becomes-a-nightmare-forKarachiites
IPRI Factfile
74
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 nonavailability 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
http://www.thenews.com.pk/daily_detail.asp?id=119363
S HORTAGE
OF
75
F UEL
AT
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
http://www.dailytimes.com.pk/default.asp?page=2008%5C06%5C20%5Cstory_20-62008_pg13_5
S HORTAGE
OF
IPRI Factfile
76
N O E ND
TO
77
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 subdivision 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 companys PRO admitted that the shortage was
going on. He said it would be overcome within weeks.
The News, June 23, 2008
http://www.thenews.com.pk/daily_detail.asp?id=119965
TO
B ESIEGE O IL
IPRI Factfile
78
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.
The News, June 24, 2008
http://www.thenews.com.pk/daily_detail.asp?id=120209
OF
T UBE -
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.
79
AS
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
IPRI Factfile
80
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
http://www.dailytimes.com.pk/default.asp?page=2008%5C06%5C27%5Cstory_27-62008_pg7_27
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
http://www.dailytimes.com.pk/default.asp?page=2008%5C06%5C28%5Cstory_28-62008_pg11_11
81
* 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-
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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
83
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
http://www.dailytimes.com.pk/default.asp?page=2008%5C06%5C28%5Cstory_28-62008_pg13_9
N EW E NERGY O RDER
BY bringing together the worlds 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), Vctor 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 Poleos 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.
Spains Minister of Trade and Industry Miguel Sebastin 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 Prez
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85
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86
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
http://www.dawn.com/2008/07/10/top4.htm
P RIORITY
A UTHORITY S ET U P
FOR
87
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
http://www.dawn.com/2008/07/10/nat11.htm