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Energy crisis in Pakistan and its solution

Energy crisis in Pakistan and its solution

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Published by Waqar Mushtaq

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Published by: Waqar Mushtaq on Feb 21, 2011
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Business Economics

Energy crisis in Pakistan
In times of such technological advancement, energy has become the only standing lifeline for a nation to rely upon. Energy is deemed to be the right hand of any developing nation. A country at the center stage of attention since the 9/11 attacks, Pakistan has had its share of great demise with regards to solving their energy crisis, a crisis that was born and bred soon after their partition from India in 1947. For Pakistan and for any other nation, energy is the fuel that powers that imperative economic engine. It is the only pushing force that allows the industrial and agricultural sector to move forward or at the same time, equally backwards. Pakistan's social sector has collapsed further and formed a crater deeper than ever only because their energy consumption per capita has decreased to an all time low. Many governments have come and gone by all promising to give the energy sector a new start, however to the unfortunate fate of the citizens of Pakistan, a formidable sketch to diminish the menace of the energy crisis has always been far away from reality. Energy crisis has created a distortion in every field of life in Pakistan. Industries (Textile, Automotive e.t.c) and other major projects are going to close. Unemployment has increased s it never before. Inflation rate has reached to a maximum .These are the major factors in the destabilization of the economy of Pakistan. Pakistan's energy sector constitutes mainly of oil, natural gas and HNP power where the contribution is listed as 43% usage of oil, 38% natural gas and 10% of HNP. The real shame that grinds Pakistan is that although they have the fourth largest coal reserves in the world they are still seen importing over 2.5 million tones on an annual basis. Partly contributed by gas shortfalls, the power shortage is expected to be little over 5,250MW by 2010, he said, adding that the oil demand would also increase by over 23 per cent to about 21 million tons in 2010 from the current demand of 16.8 million tons. Currently, the government of Pakistan states optimistically that the energy crisis will end by the year 2009, something the citizens of Pakistan openly laugh about. The current scenario of the energy crisis in Pakistan faces about a shortfall of a whopping 3,500 MW. To make things worse, the government of Pakistan's inability to deal with the energy crisis has forced many industries all across Pakistan to shut their business down due to the unavailability of electricity. This means that an additional 1500-2000 MW is to be added to the already 3,500 MW shortages forcing the gap to further widen to a massive shortfall of 5000 MW. One must ponder and wonder over how a country that has the 4th largest coal reserves in the world has to face such devastating shortfalls of electricity. All around the world countries like America, the global superpower avails over 50% of its electricity from coal, China focuses on providing energy to its people by extracting over 75% of its energy from coal and even Pakistan's nemesis for over 62 years, India uses coal to supply 57% of its energy. It is with great shame and distraught that Pakistan doesn't use coal for even 5% for its energy purposes. Waqar Mushtaq 1 E/M-FALL 09-013

2009 KARACHI . The fingers mostly point at the Karachi Electrical Supply Corporation (KESC) and FATA who although have received subsidies by the government. Waqar Mushtaq 2 E/M-FALL 09-013 . sadly it actually begins. Under a comprehensive master plan for the utilization of its allocated share of the water. The collapsing. Under this treaty. ISLAMABAD: Prime Minister Syed Yusuf Raza Gilani said on Friday that resolution of the present energy crisis in the country is foremost priority of his government and urged the US and international community to extend help to develop the power sector. known as the Indus Waters Treaty (IWT). Jhelum and Chenab. KALA BAGH Dam is a very important project which has been a victim of political and regional pressures. have failed to pay what they owe. which will have the generating capacity of 50 megawatt. Pakistan obtained exclusive rights to use 135 million acres-feet (MAF) of water of the Indus. was signed in 1960. Feudal lords still are not in the favour of this project. Oil prices all over the world shoot up to an unbearable price and economic condition of Pakistan is not Poor Planning of last Government (Shaukat Aziz) in the distribution of electricity in the rural areas without even single megawatt energy in the eight years tenure. 20th April. 300 billion. The problem doesn't end here for the Government. There are many hurdles for the Government in order to cope with the energy crisis. India retained the rights to use 33 MAF of the three eastern rivers: Ravi. The resulting agreement. if not already collapsed energy sector of Pakistan has drowned in its own circular debt of over Rs. This government and previous government have tried their level best to develop a consensus with these feudal lords on this project but all are in vein. Population is another big factor in this crisis as electricity and petroleum products consumption has increased 3 times than the consumption in the last decade. Beas and Sutlej. India constructed link canals and dams having a storage capacity of 17 MAF. backed with technical expertise. Pro Views on Energy Crisis: Many governments have come and gone by all promising to give the energy sector a new start but unfortunately due to democratic and political instability in Pakistan no one could change the fate of the citizens of Pakistan.Business Economics The World Bank played facilitated diplomatic negotiations between India and Pakistan.Prime Minister Yousuf Raza Gilani on Sunday formally inaugurated Pakistan’s first wind power project at Jhampir in Thatta district.

the government can directly tackle the issues that have led to such a shortfall of energy.Business Economics Contrary Views on Energy Crisis: Wapda had conceived installing three hydel power projects. cutlery. but the project could not attain financial close as yet. KESC circular debt has been on the rise and is reaching the utmost level of peek. though the first two projects were sanctioned under 1995 Hydro Policy. Abysmal state of Industry. getting access to international market will lead to more sustainable growth. a level deemed to be dangerous. out of 546 Textile. High cost of energy cost leads to higher product price. Gomal project of 130 MW and Raised Mangla project of 180 MW capacities were scheduled to go on stream by December 2006. jewllery etc. But government has not shown interest to resolve this root cause. Maintenance of existing IPP’s (Independent Power Plants) which normally start on simple cycle plants and then converted to combined cycle over a period of time has not been carried for a long time. Khan Khwar and Duber Khwar in the NWFP. Government has declared 6% increase in electricity tariffs in October 09. another 6% in January 2010 and about 10 % in June 2010. All these projects. Pakistan import bill reached US $39. Shockingly. In the fiscal year 2008. Likewise. carpets. currently under construction. for which the sponsors signed power purchase agreement with the government in April 2004. Electricity will be procured at an average of 17 cents /unit. These plants can be made efficient by up gradation Textile industry which was the best biggest export in the past is now facing a distortion. Other Manufacturer group (Leather.22bn. while export surged to US $19. have been delayed for completion by almost two years. None of the projects however has achieved any physical progress so far. Only feasibility reports have been generated but there is no implementation occurred. 104 have been shut down. Like Previous Government this government also has a mandate of not Building the dams. This giant cost will definitely affect the economy of the country which is already in unstable state. sports good. hitting double digits for the first time since 1996. at Allai Khwar.Building of dams will liberate Pakistan’s economy from oil dependency and our agricultural sector will grow by leaps and bound.As per FBS. Government is now introducing Rental power plants to cope with the electricity crisis. with a cumulative capacity of 323 MW. Pakistan trade deficit has reached to 13. Government has failed to deliver a master plan for building the new dams in country.96 bn. making it less competent in the international market. Waqar Mushtaq 3 E/M-FALL 09-013 . which were to be operational by June 2006. footwear. surgical goods.) is also facing the menace. instead of borrowing billions of money (like Gerry Lugar Bill). The case of New Bong Escape project is cited here. The cost of this project is about 02 Billion $. gems. even the project consultants have not been appointed. With the nationalization of KESC.0% of GDP.

well over ten per cent of national electricity can be saved by applying only the first level of energy conservation that is a change in attitude. With the help of effective electronic and print media campaigns the government can quickly educate the masses. With minimal effort. A country like Pakistan who has many allies (China. they are not only cutting their own legs but are faltering on a large basis. any such policy should be made at the highest level and its implementation should also begin there because charity starts at home.Business Economics Government needs to realize that by not acting on their large reserves of coal. industrial. They need to form a proper strategy with the help of an international consensus that can provide the correct technology and feasibility that is needed to turn that coal into the much needed electricity. instant and effective and all it requires is a stop to using energy unnecessarily. just through conservation. Conclusion and My Views:  The time is indeed now and only now for the government to move ahead and focus on such problems. whether it be in the domestic. It is simple. solar and nuclear energy whilst at the same time limit and minimize the usage of oil as its number one source of electricity’’. especially in industry. A comprehensive and sustainable energy plan is what the government needs and moreover they need the will to work so that the unattainable can be attainable ‘’Pakistan needs to avail electricity from a mixture of sources such as HEP. Iran. indigenous gas. trade or commercial sectors. coal. In my perspective. A further economy of 10-15 per cent can be achieved by introducing the second level of energy-conservation practices. wind. However to do that. public education is essential. and Saudia Arabia) in the region needs to be friend and make important use of those very allies by inviting them to form a joint solution on the electricity problem. Collectively.     Waqar Mushtaq 4 E/M-FALL 09-013 . The common man would only be convinced of the looming crisis when he sees the ruling elite practice what it preaches. more than half of the electricity deficit can be met. The current energy consumption trends in Pakistan are extremely inefficient.

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