Chapter 14

Energy

Energy is the lifeline of an economy and is a vital
input to sustain industrial, commercial and domestic
activities. Energy disruptions and energy shortages
not only result in loss of economic growth and
employment but adversely affect social cohesion in
the society. Energy crisis in Pakistan had been
brewing since 2007 and deepened in 2012 which
hugely negatively affected the economic growth and
employment. Absence of effective planning, an
economically and financially viable strategy and
incapacitated regulator resulted in supply-demand
gap. The situation has been further compounded due
to high transmission and distribution losses,
development of black-market for power and
declining revenue collection. This led to persistent
accumulation of circular debt. Consequently, the
federal budget had to absorb huge quantum of
subsidies to bridge the financial gaps in power sector
threatening the fiscal stability on the one hand, and
increasing the public debt.
Nevertheless, realizing the gravity of situation and
importance of energy for economic activities with
particular emphasis on reviving the almost stalled
industrial sector, job creation and income
generation, the present government has put this issue
on top of its economic reform agenda by pursuing a
comprehensive plan to address these problems. In
this context, government retired the circular debt (Rs
480 billion) immediately after taking oath which
added 1752 MW of electricity into the system. In
order to resolve the issue on permanent basis,
government developed National Power Policy
(2013) which was announced to provide an
affordable energy in the country through efficient
generation, transmission and distribution system. It
is expected that the policy will set Pakistan on a
trajectory of rapid economic growth and social
development. More specifically, in order to reduce
the cost of power generation to an affordable
amount, a 84 MW New Bong Hydropower Project
being the first hydro IPP in Pakistan/AJ & K has
been commissioned while 10.5 MW Gas Based
Davis Energen Project at J hang started producing
electricity and is contributing to FESCO's Network.
Likewise 2 x 660 MW Imported Coal based Power
Project at Port Qasim, Karachi has been inaugurated.
In short, the government has realized the challenges
faced by Pakistan energy system. Thus efforts are
underway to reform existing energy system to
actualize the energy sectors aspirations. It is
projected that by the end of the decade Pakistan will
be transformed from an energy deficient to a
regional exporter of power while the efficiency
improvements in transmission and distribution will
decrease the high cost of power to the end consumer
which will bring prosperity and social development
in the country.

Box-1: Salient Features of National Power Policy 2013
The Ministry of Water and Power has developed Power Policy to support the current and future energy needs of the
country and to set Pakistan on a trajectory of rapid economic growth and social development. It will also address the
key challenges of the power sector in order to provide much needed relief to the citizens of Pakistan. To achieve the
long-term vision of the power sector and overcome its challenges, following nine goals have been set:
i. Build a power generation capacity that can meet Pakistans energy needs in a sustainable manner.
ii. Create a culture of energy conservation and responsibility
iii. Ensure the generation of inexpensive and affordable electricity for domestic, commercial, and industrial use by
using indigenous resources such as coal (Thar coal) and hydel.
iv. Minimize pilferage and adulteration in fuel supply
v. Promote world class efficiency in power generation
vi. Create a cutting edge transmission network
vii. Minimize inefficiencies in the distribution system
viii. Minimize financial losses across the system
ix. Align the ministries involved in the energy sector and improve the governance of all related federal and provincial
departments as well as regulators

218
P

The main tar
i. To fully
ii. To d
iii. To d
iv. To i

14.1 Pakist
Figure belo
overall ene
(Ministry o
Petroleum
component
from policy
impacts the
and laws fo
organization
Electricity
(NEPRA) a
(OGRA).
Fig-14.1: P

The first sta
government
companies
primary ene
from import
The secon
electricity g
etc. Energy
private com
from publ
Pakistan Eco
rgets of this Po
y eliminate loa
decrease cost
decrease trans
improve colle
tans Energy
ow give us
ergy sector
of Water and
and Natura
in the whole
y to generati
energy mark
rmed by the
ns. There a
and Pow
and Oil and
Pakistans En
age is primar
t being prim
has solid ho
ergy from d
ting these fro
nd stage is
generation, r
y in Pakistan
mpanies but
lic limited
onomic Surve
olicy for year
ad shedding;
of generation
smission losse
ection of bills t
y System
a visual pre
in Pakistan
d Power and
al Resources
e system wit
on and distr
ket through r
public secto
are two reg
wer Regula
d Gas Regu
nergy System
ry energy su
me supplier t
old. The gov
omestic reso
om rest of th
s conversio
efining and
n is generate
most of th
companie
ey 2013-14
2017 are:
from 12c/uni
es from 25 per
to 95 percent.
esentation of
. Public s
d the Ministr
s) is the la
th its interven
ibution chain
rules, regula
or institutions
gulators Nat
ation Auth
ulatory Auth
m
upplies wher
to the gener
vernment su
ources as we
he world.
on process
processing o
ed by public
he energy co
s. During
it to 10c/unit;
rcent to 16 per

f the
ector
ry of
argest
ntion
n. It
ations
s and
ional
hority
hority
e the
ation
upply
ell as
like
of oil
c and
omes
the
conv
vario
lique
used
ener
publ
Gov
secto
priv
Hub
majo
and
proc
year
distr
man
In e
towa
chan
to b
the g
early
the
1994
intro
this
This
secto
and
now
pow
prov
inve
avai
lack
prov
guar
fore
coor
criti
com
Pres
secto
and
(GE
reso
by I
Pow
(Win
Gen

rcent
version proc
ous plants
efaction etc
d by energy
rgy system
lic sector. Ho
vernment of
or alone the
ate sector in
b Power Pro
or power pro
the world
cess was ver
rs to fully
ribution of
naged by twe
early 90s th
ards market
nge in the po
ring in more
government
y 90s. The fi
unbundling
4 and comp
oduced the P
policy was t
s policy resu
or, promotio
privatization
w private sect
wer product
vinces have b
est in the ene
ilability of n
k of techni
vincial gov
rantees to th
ign direct inv
rdination pla
cal for th
mplicated sect
sently, the ge
or is done t
Mangla dam
ENCOs) gen
ources. The p
IPPs (Indepe
wer Plants) /
nd Power
neration), H
cess, primary
(heat, pow
.), oil refine
y industry it
of Pakistan
owever, it wa
Pakistan to
erefore it wa
n. As a resu
oject (HUBC
oject which
as well. H
ry slow and
establish in
electricity
elve Area Ele
here was a s
economy w
ower sector o
e private inv
introduced n
first visible s
of WAPDA
pleted in 19
Power Policy
to restructure
ulted in de-r
on of IPPs, re
n of selected
tor has also b
tion. Unde
been given co
ergy sector. H
natural reso
ical knowle
vernment t
he private
vestment and
an are reaso
he province
tor.
eneration of
through hyd
ms etc. whil
nerate electr
private secto
endent Powe
CPPs (Capti
Generation)
Hub Powe
y energy is
er, gas, pe
eries and so
self. Prior t
n mainly c
as becoming
handle and
as decided t
ult in 1985, a
CO) was in
was unique
However, its
d it took the
n 1997. Til
was coord
ectricity Boa
shift in glob
which led to
of Pakistan. T
vestment. Fol
number of po
step in this d
A, the proces
998. The
of 1994. Th
e the entire p
regulation o
estructuring
d corporate
become a ma
er 18th A
onsiderable a
However, du
urces in the
edge, inabil
to provide
sector for b
d the absence
ons which ar
es to hand
electricity b
del sources l
le generation
ricity throu
r electricity
er Plants), S
ive Power P
, HPG (Hy
er Compan
supplied to
trochemical,
ome of it is
to 1985, the
consisted of
g difficult for
finance the
to bring the
a 1292 MW
nitiated as a
in Pakistan
installation
e project 12
l 1994, the
dinated and
ards (AEBs).
bal thinking
a structural
The idea was
llowing this,
olicies in the
direction was
ss started in
government
he impetus of
power sector.
f the power
of WAPDA
entities. Till
ajor player in
Amendment,
autonomy to
ue to unequal
e provinces,
lity of the
sovereign
bringing the
e of national
re becoming
dle such a
by the public
like Terbela
n companies
ugh thermal
is generated
SPPs (Small
lants), WPG
ydel Power
ny Limited
o
,
s
e
f
r
e
e
W
a
n
n
2
e
d
.
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l
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,
e
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n
t
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r
A
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o
l
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n
e
l
g
a
c
a
s
l
d
l
G
r
d

(HUBCO)
(KESC) w
company.
generated b
Electric Po
institution w
of all gene
influence w
In the third
to energy s
National
(NTDC) an
into power
include LES
FESCO, M
However a
transmission
percent. Th
possible m
minimum le
percent till 2
The interact
services occ
should be n
energy prod
government
part of the f
tariff as ma
pay the pri
From FY03
has been giv
which is mu
In 1995 the
million TOE
that time w
electricity 1
the energy
million TOE
growth rate
0
20
40
60
80
100
120
%

S
h
a
r
e
Figu
Sou
and Karach
while KESC
Some port
by NPPs (Nu
wer Compan
which mana
eration comp
within the sys
stage, the ge
services whi
Transmissio
nd KESC. T
distribution
SCO, QESCO
MEPCO, HES
major porti
n and distri
he present
measures to
evel and the
2017.
tion of suppl
cur through
noted that th
ducts does n
t heavily inf
final price by
ajority of co
ice if determ
3 to FY13 a t
ven as subsid
uch higher th
e total energ
Es. The main
were Oil 41.
15.5 percent
supply of th
Es with an an
e of 4 per
1995
re14.3:Prima
C
urce: Energy Year
hi Electric S
C is vertic
ion of ele
clear Power
ny (PEPCO
ages the gen
panies and
tem
enerated ener
ch are main
on Distribu
The NTDC i
companies
O, PESCO, I
SCO, KESC
ion of energ
ibution whic
governmen
o reduce t
target is to re
liers and con
energy mar
he determina
not happen fr
fluence the m
y paying sub
onsumers wi
mined by fre
total amount
dy to power
han the cost
y supply of
n sources of
6 percent, g
and coal 5.8
he economy
nnual averag
rcent. There
2003
aryEnergySu
Coal E
rs Book, various i
Supply Com
cally integr
ectricity is
Plants). Pak
) is an umb
neration activ
thus has st
rgy is transm
nly done thr
ution Com
s further div
(DISCOs) w
IESCO, GEP
CO and SEP
gy is lost du
ch is almos
nt is taking
these losses
educe these t
nsumer of en
rket. Howev
ation of price
reely becaus
market and b
bsidy on the
ll not be ab
ee market fo
of Rs 1.7 tri
sector an am
of Diamer B
Pakistan wa
f energy supp
gas 36.8 per
percent. In
y increased t
ge (1995 to 2
e was not
2005
upplyBysourc
Electricity
issues, HDIP
mpany
rated
also
kistan
brella
vities
trong
mitted
ough
mpany
vided
which
PCO,
PCO.
uring
st 25
g all
s to
to 16
nergy
er, it
es of
e the
bears
final
ble to
orces.
illion
mount
Basha
Dam
show
How
caus
pres
tarif
ener
14.2
In 2
thou
prim
tonn
2 pe
proc
Figu
Paki
as 28
ply at
rcent,
2013
to 64
2013)
only
incre
chan
seen
whil
2013
whic
relat
2
2
3
3
4
4
5
R
s

B
i
l
l
i
o
n
2010
Y
ce
Oil
m. The trend
wn in Figure
wever, withd
se huge so
sent governm
ff and movin
rgy supplies
2: Energy Su
2013, indigen
usand tonnes
mary energy
nes of oil equ
ercent of ene
cess.
ure14.3 show
istan by sour
ease in ene
nge in the p
n. The share
le the share
3 on account
ch led the su
tive cheaper
0
50
100
150
200
250
300
350
400
450
500
F
Y
0
3
F
Y
0
4
Figure 14.2
2011
Years
Gas
Source: Budget Wing
of subsidies
14.2 below:
drawing the
ocio-econom
ment is tryi
ng toward c
especially fo
upply
nous energy
s of oil equiv
supplies rem
uivalent (TO
ergy was los
ws the trend
rces.
ergy supply
patterns of en
e of oil dec
of gas incre
t of rise in o
upplier to shi
r source. Ho
F
Y
0
5
F
Y
0
6
F
Y
0
7
F
Y
0
8
2: Subsidies t
2012
EnergyS
g, Ministry of Finance
Energy
s given in th

e subsidy at
mic cost th
ing to ration
cheaper ener
or electricity
availability
valent (TOE)
mained 64, 5
OE) showing
st during the
ds of energy
but also a
nergy sourc
creased to 3
eased to 48.2
oil prices inte
ift toward ga
wever this s
F
Y
0
8
F
Y
0
9
F
Y
1
0
F
Y
1
1
to Power Sect
2013
Supply
y
219
hese years is
t once may
herefore the
nalizing the
rgy mix for
generation.
was 65,639
) while total
88 thousand
g that almost
e conversion
y supply of

a very clear
es had been
32.5 percent
2 percent in
ernationally,
as which is a
shift exerted
F
Y
1
2
F
Y

1
3
Years
tor
0
10
20
30
40
50
60
70
M
i
l
l
i
o
n

T
O
E
9
s
y
e
e
r
9
l
d
t
n
f
r
n
t
n
,
a
d
220
P

pressure on
terms of e
efficient sou
14.2.1 Oil
Overtime t
sources of e
is highest w
risks and b
economy.
energy for
increasing c
The price o
increased to
an increase
its price in
prices dome
May 2014 f
generating
increased m
produced o
produced t
price of ele
KWh. In o
IPP involve
That is the
circular deb
more than h
oil reserves
reserves we
million barr
oil and 37
recoverable
on account
crude oil re
March FY
correspondi
11 percent
growth of
barrels in
million barr
(
M
M
C
F
D
)
Pakistan Eco
n domestic re
efficiency, o
urce of prima
there was
energy supply
which has ex
brought neg
Oil is mos
Pakistan, th
continuously
of oil was $
o $ 110perb
of almost hu
1995. This
estically, esc
from Rs 9 p
one unit
manifold i.e
n furnace oi
through dies
ectricity in P
other words,
es a subsidy
e root cause
bt. Furtherm
half of the o
s. On J une 3
ere 1,102.6
rels(68 perce
1.0 million
e reserves. Fu
of import
emained 44.9
14 compare
ing period la
while loca
12 percent
J uly-March
rels in corre
(-0.
3,400
3,500
3,600
3,700
3,800
3,900
4,000
Ju
Figure14.
Source: Min
onomic Surve
esources of
oil is still c
ary energy su
changing p
y, still relian
xposed the
gative reper
tly an imp
he price of
y especially i
10 per barre
arrels in Ma
undred time
also led to a
calating to R
per liter in 1
at IPP the
e., Rs.18/- p
il and Rs.24
sel, while t
Pakistan is a
every unit
of Rs 9 to
of the grow
more, Pakista
original dom
0, 2013, orig
million bar
ent) cumulati
barrel (32
urther a hug
of crude oil
9 million ba
ed to 40.9 m
ast year pos
l crude extr
as it stood
FY 14 co
sponding pe
9%)
(0.4%)
ul Aug
.4:GasProdu
nistry of Petroleu
ey 2013-14
gas, howeve
considered a
upplies.
attern in m
nce on oil and
country to m
rcussions on
orted sourc
which has
in last few y
el in 1995 w
ay 2014 sho
s as compare
an increase i
Rs 107 per lit
995. The co
ermal plant
per KWh w
4/- per unit w
the average
about Rs. 9/
generated b
Rs 15 per K
wing problem
an has exhau
mestic recover
ginal recover
rrels with 7
ive productio
percent) bal
ge amount is
l. The impo
arrel during
million barre
ting a growt
raction post
at 23.0 mi
ompared to
eriod last yea
(5.0%)
(-0.7%
Sep Oct
ctionduringJ
umand Natural R
er, in
as an
major
d gas
many
n the
ce of
been
years.
which
wing
ed to
in oil
ter in
ost of
has
when
when
sale
- per
by an
KWh.
m of
usted
rable
rable
731.5
on of
lance
paid
ort of
J uly-
els in
th of
ted a
illion
20.5
ar. In
mon
impo
billi
grow
Real
high
Paki
Thu
prov
bloc
fore
abou
of t
bloc
Punj
Afte
expl
mom
finan
renta
well
been
supp
has
sour
14.2
The
natu
2013
cum
(44
Whe
of n
trilli
cubi
com
curr
belo

%)
(0.1%)
(
t Nov
JulyApril
Resources
netary value
ort of petro
on in corres
wth 6.2 perce
lizing the ri
h use of pet
istan is tryi
s on J anu
visionally aw
cks to eight
ign compani
ut 103,348 S
the area alre
cks, 21 block
jab, 8 in Kh
er execution
loration activ
mentum and
ncial benefi
als. During t
ls have been
n made. Alth
ply yet due
substituted
rce of energy
2.2 Gas
original d
ural gas were
3. 30.9 trilli
mulative prod
percent) w
en compared
natural gas o
ion cubic fee
ic feet of n
mparison of g
ent year and
ow:
(-0.8%)
(-4.1%
Dec Jan
s, US $ 4.3
leum crude
sponding per
ent.
isk and chal
troleum cru
ing to explo
uary 21, 2
warded 50
companies i
ies. The tota
Sq. Kms whi
eady under
ks are locate
hyber Pakhtu
of agreemen
vities in the
d provinces
ts in terms
the current fi
n spudded a
hough oil is
to continuou
oil in many
y supplies.
domestic re
e 55.6 trillion
ion cubic fe
duction and
was balance
d with domes
on J une 30,
et which rep
natural gas r
as productio
d last year i
%)
(-4.2%)
Feb
201213
3 billion wa
compared t
riod last yea
llenges invo
ude, the Gov
ore domestic
2014 the
petroleum
including bo
al area of the
ich is around
exploration.
ed in Baluch
unkhwa and
nts for these
country will
s will get
of social w
iscal year, 73
and 18 disco
efficient prim
us rise in its
y ways bein
ecoverable
n cubic feet
et (56 perce
24.7 trillion
e recoverabl
stic recovera
2012, these
present that
reserve are
on during J uly
is shown in
(-2.3%)
(0.5%
Mar April
3 201314
as spent on
to US $ 4.0
ar posting a
olved due to
vernment of
c resources.
government
exploration
oth local and
ese blocks is
d 38 percent
. Out of 50
histan, 15 in
6 in Sindh.
e blocks, the
l pick a new
immediate
welfares and
3 numbers of
overies have
mary energy
s prices, gas
g a cheaper
reserves of
on J une 30,
ent) was the
n cubic feet
le reserves.
able reserves
e were 56.0
0.38 trillion
depleted. A
y April for
Figure 14.4

%)
4
n
0
a
o
f
.
t
n
d
s
t
0
n
.
e
w
e
d
f
e
y
s
r
f
,
e
t
.
s
0
n
A
r
4
Energy
221

The worrisome factor is that our gas reserves are
depleting and if gas consumption grows annually
even at moderate rates, the present recoverable
reserve will largely be exhausted by 2025. As this
limit approaches the marginal cost of gas supplies
will rise.
To avoid such a situation we have two choices:
efficient use of gas and an increase in the gas
exploration rate along with diversification of energy
mix. Realizing this fact, the government is attracting
foreign investment to explore new fields. Although
exploring of natural gas is sub-component of mining
and quarrying, yet on a positive note it should be
noted that both private and public gross fixed capital
formation in mining and quarrying at basic prices of
2005-06 had shown positive growth of 25 percent in
FY 14 that earlier had declined to 14 percent in FY
13.
Increasing demand of natural gas with its limited
supply has made room for Liquefied Petroleum Gas
(LPG) which is also a primary source of energy.
Currently about 1000 tons/day LPG is being
produced domestically contributing less than 1
percent to the total energy supply mix. Because of
its characteristics LPG is fast becoming a fuel of
choice in the areas, where natural gas distribution
network is not available. Pakistan Petroleum
Limited (PPL) is the pioneer of the natural gas
industry in the country which operates six producing
fields in Sui, Kandhkot, Adhi, Mazarani, Chachar
and Hala while Oil and Gas Regulatory Authority
(OGRA) is empowered to regulate the LPG sector
under OGRA Ordinance 2002 and LPG (Production
& Distribution) Rules 2001 w.e.f 15th March, 2003.
OGRA has simplified the procedure for grant of
LPG license and the same is granted on fast track
basis once the requirements are met / compiled.
During J uly-Dec, 2013 two licenses for construction
of LPG storage and filling plants were issued. In
addition, OGRA has also issued 15 licenses for
construction of LPG auto refueling station. OGRA is
playing a vital role to increase private investment on
midstream and downstream petroleum industry,
During J uly- December, 2013 an investment of Rs.
0.264 billion has been made in LPG infrastructure
whereas total investment in the sector till end of this
fiscal year is estimated about Rs. 17.464 billion.
Natural gas and LPG are considered as cheaper than
oil but both are expensive than coal and fortunately
Pakistan has huge coal resources estimated to exceed
185 billion tons which generally ranks from lignite
to sub-bituminous. However, less focus has been
given to this cheaper primary energy supply.
14.2.3 Coal
The share of coal in energy supply is almost stagnant
to 6 percent since 1995. The federal and provisional
governments have started giving importance to coal
exploration and development activities. The federal
government has been striving hard for optimum
development and utilization of indigenous coal
resources and pursuing the policy of promoting coal
based power generation. A summary of the efforts
made in this regard is presented below:-
i. The federal government sponsored discovery
and evaluation of Thar coal deposits,
development of infrastructure in this coal-
field and studies to determine its mine ability
and for gasification incurring more than Rs
2.000 billion.
ii. Lakhra Coal Development Corporation has
been set up as a joint venture of Pakistan
Mineral Development Corporation, WAPDA
and Government of Sindh to fulfill coal
requirement of 150 MW Khanote Power
Plant.
iii. The Finance Division has sponsored under
PSDP a pilot project for Underground Coal
Gasification at Thar Coal Block- V.
iv. Federal Government is pursuing the policy of
promoting coal based power generation and
conversion of oil and gas-based power plants
to indigenous/imported coal that would later
on, be replaced by Thar coal depending upon
its availability.
Government of Sindh has leased out a coal block for
an integrated mining project and power generation to
increase the share of coal. The details are as under:-
a) Government of Sindh has entered into a joint
venture with M/s Engro Powergen (Pvt)
Limited for Coal Mining in Block-II and
established a Company under Companies Act,
1984 viz. Sindh Engro Coal Mining
Company for development of Coal Mine and
installation 600-1000 MW Power Plant.
b) M/s Cougar Energy UK limited has been
allocated Block-III in Thar coalfield for
extraction Underground Coal Gasification and
establishing 400 MW Power Plant.
c) M/s Bin Daen Group, UEA has been allocated
Block-IV in Thar coalfield for developing
Coal Mine and installing 1000 MW Power
Plant.
222
P

d) One
Comm
MW
Proje
conne
notifi
chairm
the pr
e) M/s
alloca
devel
Plant
f) M/s
Expo
condu
integr
plant
g) Gove
J .V w
alloca
devel
fired
It is expec
federal and
Private Pow
One Windo
the field o
Governmen
inception
addition of
of twenty
processing
Gas and Hy
(IPP) projec
8,835 MW
projects, fif
capacity of
the remaini
capacity of
M
W
F
Pakistan Eco
Block has
mission of P
based on Un
ect in Block
ection, the
ied Gover
manship of D
roject.
Oracle Co
ated Block
loping Coal
t of 300 MW
China Natio
ort Corpora
ucted feasib
rated coal m
at Sonda-J er
ernment of
with M/s Al-
ated area
loping Coal
Power Plant
cted that wi
d provincial
wer and Infra
ow facilitat
of power ge
nt of Pakist
has succe
around 8,65
nine (29)
nineteen (1
ydel) based I
cts with a cu
. Out of the
fteen (15) p
6,948 MW a
ng four (4) p
f 1,887 MW
(6.0%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Jul
Fig14.5:Com
Source: Ministry
onomic Surve
been alloca
Pakistan for
nderground C
k-V Thar c
Governmen
rning Bod
Dr. Samar M
alfield Plc,
VI in Th
Mine and
W extendable u
onal Machin
ation of
bility study
mining and
rrick in distr
Sindh enteri
Abbas Grou
in Badin
Mine and
t of 300-600
ith ongoing
governmen
astructure B
tor to the pri
eneration on
tan (GOP).
ssfully ma
7 MW throu
IPPs. PPI
9) multiple
Independent
umulative ca
ese nineteen
projects havi
are based on
projects hav
consist of tw
%)
(4.0%)
Aug
mparativeData
y of Water and Po
ey 2013-14
ated to Plan
r Plot Projec
Coal Gasific
coalfield. In
nt of Sindh
dy under
Mubarakman
UK has
har coalfield
installing P
up to 1000 M
nery Import
China (C
y for 400
coal-fired p
rict, Thatta.
ing into ano
up Company
coalfield
installing C
MW.
efforts of
nts, the shar
Board (PPIB)
ivate investo
n behalf of
PPIB, since
anaged cap
ugh establishm
IB is curr
fuel (Oil, C
t Power Prod
apacity of ar
n in process
ing a cumul
n hydro, whe
ving a cumul
wo (2) gas b
(13.0%)
(12.0
Sep Oct
aofElectricity
ower
nning
ct 50
ation
this
has
the
d for
been
d for
ower
MW.
and
CMC)
MW
ower
other
with
for
Coal-
both
re of
coal
lead
elect
14.2
Elec
obta
coal
was
as i
perc
PEP
hydr
750
for
3.3
WA
KES
one
almo
ineff
plan
elect
year

) is a
ors in
f the
e its
acity
ment
ently
Coal,
ducer
ound
s IPP
lative
ereas,
lative
based
proj
base
Gov
gene
ener
gove
for
regu
It is
will
vario
whic
next
belo

%)
(-1.0%)
Nov
yGeneration
l in primary
d to cheaper
tricity genera
2.4 Electrici
ctricity is a
ained by conv
l, nuclear pow
decline in s
t declined f
cent in 201
PCO system i
ro 6,773 MW
MW. Thus
29.7 percent
percent. O
APDA and ex
SC, 750 by
critical iss
ost fifty pe
fficient recov
nts and inapp
tricity gener
r and last yea
ects, one (1)
ed project.
vernment of
eration mix
rgy resource
ernment is c
these projec
ularly in orde
s expected th
be added i
ous resource
ch will redu
t four years.
ow:
(8.0%)
(4.0%
Dec Jan
JulyApril
2012
energy supp
r energy m
ation will red
ity
secondary e
verting prim
wer and othe
share of elec
from 15.5
13. The ins
is 22,812 MW
W, thermal 1
the hydrop
t, thermal 6
f this 11,4
x-WAPDA G
PAEC, and
ue is that
rcent of ins
very system,
propriate fue
ration during
ar is shown in
) oil based p
f Pakistan a
through dev
es particularl
ommitted to
cts and mon
er to comple
hat 16, 564
in the nation
es by comp
uce / elimina
. The detail
%)
(9.0%)
(
Feb M
213 201
ply will incre
mix which w
duce the cost
energy sour
mary sources
er natural so
ctricity in en
percent in
stalled capa
W as of J une
15,289 MW
power capaci
7.0 percent
93 MW is
GENCOs, 2,2
rest by IPP
electricity g
stalled capa
lack of wear
el mix. A co
g J uly Apri
n Figure 14.5
project and o
aims to ach
velopment of
ly hydel an
o arrange tim
nitor their d
ete them as p
MW power
nal grid syst
pleting the n
ate load shed
of the proj
(7%)
(11%)
Mar Apr
1314
ease and will
when use in
t.
ce which is
like gas, oil,
urces. There
nergy supply
1995to 12.9
acity in the
e 2013; with
and nuclear
ity accounts
and nuclear
owned by
216 MW by
s. However,
generated is
acity due to
r and tear of
omparison of
il for current
5below:

one (1) coal
hieve power
f indigenous
d coal. The
mely finances
development
per schedule.
r generation
tem through
new projects
dding during
ect is given
l
n
s
,
e
y
9
e
h
r
s
r
y
y
,
s
o
f
f
t
l
r
s
e
s
t
.
n
h
s
g
n

Table 14.1: N
Year
2014
2015
2016
2017
2018
Upto 2018 T
Source: Paki

After gene
Companies
supplying e
bills. So an
Another w
recommend
efficient DI
in order to
distribution
structure no
incentive a
inefficient D
government
F
G
M
Q
H
T
P
S
Fig
S
New Projects
Guddu-
Nandipu
Guddu-
Quaid-e
Quaid-e
Guddu
Quaid-e
Neelum
Golen G
Patrind
Terbela
Coal Pla
Coal Pla
Thar Co
Coal Pla
Gaddan
Total Generat
stan Electric P
eration of e
(DISCOS)
electricity to
nother critica
worrisome
ds a tariff
ISCOs and p
reduce their
losses. H
otified by th
as a result t
DISCOs hav
t. Thus ele
0%
IESCO
FESCO
GEPCO
LESCO
MEPCO
QESCO
HESCO
TESCO
PESCO
SEPCO
gure14.6:Co
ource: National E
s
Nam
1
ur Power Proj
2
e-Azam Solar
e-Azam Solar
Steam (3)
e-Azam Solar
m J helum Hyde
Gol
HPP
a 4th Extension
ant at Sahiwal
ant at Jamsho
oal Plant
ant Larkana
ni Power Park
tion Addition
Power Compa
electricity,
are mainly
o consumers
al point afte
factor is
structure w
unishment to
r respective
However, th
he governme
the combine
ve to be born
ectricity gen
5%
mparisonofT
Electric Power Re
e of Project
ject
Park (Phase-I
Park (Phase-I
Park (Phase-I
el
n
l
ro

n
any Ltd
the Distribu
y responsible
s and colle
er inefficienc
that NE
with incentiv
o inefficient
transmission
e unified t
ent disallows
ed losses of
ne by the fe
neration bec
10% 15
T&Dlossesa
egulatory Author
I)
II)
III)
ution
e for
cting
cy in
the g
perf
distr

EPRA
ve to
ones
n and
tariff
s this
f the
deral
come
over
to tr
cost
furn
therm
inter
bein
majo
circu
5% 20%
amongDISCO
rity
Capacity
(243 MW)
(425 MW)
(243 MW)
(100 MW)
(300 MW)
(261 MW)
(600 MW)
(969 MW)
(106 MW)
(147 MW)
(1410 MW
(1200 MW
(1320 MW
(1320 MW
(1320 MW
(6600 MW
16564 MW
generation st
form well
ribution (T &
r expensive o
ransmission
of generat
nace oil sub
mal power
rvenes throu
ng necessity
ority of peo
ular debt and
25%
s
A
G
G
G
G
W
W
W) W
W)
W) G
W) G
W) G
W) Pu
W
tage is that t
in terms
& D) losses.
one due to co
and distrib
tion coupled
bstantially h
generation.
gh subsidies
of life will
ople. Howev
d when the p
30%
2012 2
Energy
Agency
GENCOs
GENCOs
GENCOs
PPDB
PPDB
GENCOs
PPDB
WAPDA
WAPDA
PPDB
WAPDA
PPDB
GENCOs
GENCOs
GENCOs
ublic +Pvt

the main DIS
of transm
ostly input an
ution losses
d with rise
has raised t
The gover
s realizing th
become una
ver, this als
present gove
35% 40
2013 2014
y
223
Fuel
Gas
Oil
Gas
Solar
Solar
Gas
Solar
Hydel
Hydel
Hydel
Hydel
COAL
COAL
COAL
COAL
COAL
SCOs do not
mission and

nd other due
s. This high
in price of
the cost of
rnment thus
at the power
affordable to
o results in
ernment paid
0%
t
d
e
h
f
f
s
r
o
n
d
224
Pakistan Economic Survey 2013-14

the unsustainable level of circular debt there was
1752 MW increase in capacity utilization.
To diversify the primary energy supply in the
generation, Pakistan Atomic Energy Commission
(PAEC) produce electricity through nuclear plants.
By this time three nuclear power plants are
operational. The first nuclear power plant i.e.
Karachi Nuclear Power Plant (KANUPP) completed
its 30 years design life in 2002.
14.2.5 Nuclear Energy
Pakistan Atomic Energy Commission (PAEC) is
responsible for planning, construction and operation
of nuclear power plants in the country. PAEC is
currently operating three nuclear power plants
Karachi Nuclear Power Plant (KANUPP), Chashma
Nuclear Power Plant Unit-1 (C-1) and Unit-2 (C-2).
The construction of two more units C-3 and C-4 of
340 MW each is in progress. The second and third
nuclear power plants i.e., (C-1 and C-2) are
performing very well. Performance of all three
operating nuclear power plants is given in the
following Table 14.3:
Table 14.2: Electricity generation
S.No Source Capacity addition
(MW)
IPPS Fuel Operated Plants
1 KAPCO 282
2 HUBCO (RFO) 363
3 HUBCO Narowal
(RFO)
204
IPPS Gas Operated Plants
4 Liberty (Gas) 193
5 Saif Power (Gas &
HSD)
56
6 Halmore (Gas &
HSD)
48
GENCOs
7 J amshoro (RFO) 388
8 Guddu (Gas) 136
9 Muzaffargarh (RFO) 82
Total 1,752
Source: Ministry of Water and Power

Table 14.3: Performance of the Operating Nuclear Power Plants in Pakistan
Plants Gross Capacity (MW) Grid Connection Data Electricity sent to Grid (million KWh)
July 1, 2014 to
March 31, 2014
Lifetime upto March
31, 2014
KANUPP 100 18-Oct-71 291 13,004
C-1 325 13-Jun-00 1,840 26,781
C-2 330 14-Mar-11 1,866 6,096
Source: Pakistan Atomic Energy Commission

The construction of fourth and fifth nuclear plants,
Chashma Nuclear Power Plant unit 3 & 4 (C-3 and
C-4) at Chashma site, is ahead of the schedule. The
Domes on containment buildings of C-3 and C-4
were placed on the 6th March, 2013 and 2nd
J anuary, 2014, respectively. Status of under
construction nuclear power plant is given in the
following Table 14.4:
Table 14.4: Status of under construction nuclear
power plant
Plants Gross
Capacity
(MW)
First
Concrete
Pour Date
Target
Commercial
Operation
Date
C-1 340 4-Mar-11 30-Apr-16
C-2 340 18-Dec-11 31-Dec-16
Source: Pakistan Atomic Energy Commission

PAEC is implementing nuclear power program 2030
set by Energy Security Plan of the Government of
Pakistan. The ground breaking ceremony of Karachi
Coastal Power Project (K-2 and K-3) was held on
26th November, 2013. To meet the targets, sites are
being identified for more under power plants.
Technical and engineering infrastructure is in place
to provide technical support to existing under
construction and future nuclear power plants
One reason of energy crises is expensive input and if
timely efforts are not made for cheaper energy mix,
the problem can be more severe in future. The
government is committed to achieve less oil
dependent power generation mix through
development of indigenous energy resources
particularly hydel and coal. Recently, the Executive
Committee of the National Economic Council
(ECNEC) approved four development projects in
power sector having a combined generation capacity
of 3,511 MW. The approved projects include K-I
and K-II Nuclear Projects situated in Karachi
(Province of Sindh; generation capacity 2,200 MW),
Nandipur (Province Punjab; generation capacity 425
MW; cost Rs 57,380 million) and Neelum-J helum
hydroelectric project (AJ K; generation capacity 969
MW). Government of Pakistan is committed to
arrange timely finances for these projects and
monitor their development regularly in order to
complete them as per schedule. Also one other
Energy
225

diversification in using energy mix in the generation
of electricity is by producing electricity by Co-
Generation for which government is seriously
thinking. Co-Generation is a high efficiency energy
system that produces both electricity (and
mechanical power) and valuable heat from a single
fuel source. Pakistan being the fifth largest
sugarcane producer in the world has the potential to
generate electricity of almost 2,000 MW through
Co-Generation. Bagasse (process waste of sugar
industry) is a fibrous residue of cane stalk obtained
after crushing. When burned in quantity, bagasse
produces sufficient heat energy to supply all the
needs of a typical sugar mill, with energy to spare.
To this end, a secondary use of bagasse is in Co-
Generation. Development of Co-Generation plants
based on high pressure boilers is gaining momentum
worldwide. Thus Co-Generation by sugar mills by
utilizing bagasse and coal provides one of the most
economically viable options for thermal power
generation, earlier it remained unexploited in
Pakistan.
14.3.Energy Consumption
Energy consumption is the amount of energy left for
final use after subtracting energy lost in
transformation and distribution from primary energy
supplies. It is considered as the oxygen of an
economy and the lifeline of the economic growth
particularly in the industrialization stage of an
emerging economy. The importance of energy
consumption in the economic growth can be realized
from the fact that the excessive productivity
slowdown around the world in 1970s which was
primarily due to oil crises. Prior to 1970s, economic
growth and prosperity of a country in the long run
depends on the basic factors of production like labor,
capital and land. Economists mostly link the
relationship between these factors of production and
economic output through the production functions.
However, for considerable amount of time,
economists did not consider energy as a factor of
production and ignore its importance in the
production process. Arrows learning by doing and
Hicks induced innovation did not include resources
or energy explicitly in their models. However lately,
the geological economists have given energy a key
role in the production process. They placed huge
emphasis on the role of energy and its availability in
the production and growth processes. These models
have shown that scarcity of energy imposes a strong
hindrance in the economic growth of a country.
Similarly is the case of Pakistan. In past, Pakistani
policy maker and planners had given less importance
to energy in development plan. During period of
higher economic growth, failing to implement
proper energy plans for addressing future needs of
the country resulted in cyclical pattern in their
relationship. The fluctuation in energy consumption
affected the large scale manufacturing growth which
in turn affected the real GDP growth as shown in
figure below:

During FY 13 energy consumption was 40,185
million TOEs compared to 40,026 million TOEs in
FY 12 showing a growth of 0.4 percent. The current
fiscal year much improvement has been seen in
economic activity due to better available energy for
usage on account of relatively less losses in
transformation and distribution as compared to last
year.
Although by source gas has the major share in
energy consumption, however, since 2008 its share
is almost stagnant 43 to 44 percent and due to rise in
prices of oil there is decline in its share in energy
consumption.


-30
-20
-10
0
10
20
30
1
9
9
5
-
9
6
1
9
9
6
-
9
7
1
9
9
7
-
9
8
1
9
9
8
-
9
9
1
9
9
9
-
2
0
0
0
2
0
0
0
-
0
1
2
0
0
1
-
0
2
2
0
0
2
-
0
3
2
0
0
3
-
0
4
2
0
0
4
-
0
5
2
0
0
5
-
0
6
2
0
0
6
-
0
7
2
0
0
7
-
0
8
2
0
0
8
-
0
9
2
0
0
9
-
1
0
2
0
1
0
-
1
1
2
0
1
1
-
1
2
2
0
1
2
-
1
3
2
0
1
3
-
1
4
%
Years
Fig-14.7: Relationship between growth rate of Real GDP, LSM and Energy Consumption
GDP (fc)
LSM
Energy Consumption
Source: Pakistan Bureauof Statistics, EconomicAdviser's Wing, HDIP
226
P


14.3.1 Oil (
Transport a
sector in t
However, d
increase in
share increa
of oil in t
reason is th
Source: Hydr

During J uly
consumptio
while share
0.8 and 0.
compared th
During FY
was US $ 1
it was 19.
million met
million met
March FY
P
e
r
c
e
n
t
a
g
e
S
h
a
r
e
Power
41.1
Other Go
1.6
Sh
Pakistan Eco
(Petroleum P
and power s
he usage o
during last tw
the usage o
ases to 40.0
transport sec
hat majority
rocarbon Devel
y March F
on is increas
e of transpor
6 percentag
he same duri
13 the imp
14.9 billion. I
.2 million m
tric tons of
tric tons of p
14, the impo
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
P
e
r
c
e
n
t
a
g
e

S
h
a
r
e
Figure14.8
Source: Hydroca
Households
0.5
vt.
hare of sector
Oil/Pe
J uly-M
onomic Surve
Product)
sectors rema
f oil / petr
wo decade th
of oil in pow
percent in 2
ctor is almo
of commerc
Figure 14.9:
lopment Institut
FY 14, share
ed by 1.7 p
rt and indus
ge point, res
ing J uly M
port bill of
If to look int
metric tons
petroleum p
petroleum cru
ort bill of pe
2008
8:EnergyCons
arbon Developmen
rs in Consum
etroleum (%)
March FY 13
ey 2013-14
ained the hig
roleum prod
here is signif
wer sector a
2013 while u
ost stagnant,
cial transport
Share of sect
te of Pakistan
e of power i
percentage p
try decrease
spectively, w
arch FY 13.
petroleum g
to quantity t
including
products and
ude. During
etroleum post
2009
sumptionbyS
nt Institute of Pak
Industy
7.4
Agriculture
0.1
T
mption of
)
ghest
ducts.
ficant
s the
usage
, the
t still
use
whil
shift
oil i
decl
J uly
petro
corr
tors in consu
in oil
points
ed by
when
group
terms
12.3
d 6.9
J uly-
ted a
nega
of p
duri
billi
a ne
impo
as it
com
perio
quan
crud
main
2010
Years
Source
kistan
ransport
49.3
Powe
42.8
oil and the
le usage of o
t toward CN
in agricultur
line in activ
y-March FY
oleum prod
esponding p
mption of Oi
ative growth
petroleum pr
ng J uly-Mar
on during co
egative growt
ort of petrol
t was US $ 4
mpared to US
od last yea
ntities of bot
de (5.0 perce
n reason attri
2011
Oil
Coal
LPG
Hous
0
er
Other Govt.
1.6
Share of s
O
J
ere is neglig
oil in househo
NG from oil.
re and indu
vity due to p
14, the comp
duct is little
eriod last ye
il / Petroleum
h of 1.3 perce
roducts stoo
rch FY 14
orresponding
th of 5.6 per
leum crude i
4.3 billion du
S $ 4.1 billio
ar. There w
th petroleum
nt and 4.3 pe
ibuted to the
2012
G

seholds
0.4
sectors in Con
Oil/Petroleum
J uly-March FY 1
gible shift to
old decline th
The decline
stry could b
power short
position of u
e variant fr
ar as shown
m
ent. The valu
od at US $
compared to
g period last
rcent. Howev
increased by
uring J uly-M
on during co
was positive
m products an
ercent respec
e increase in
2013
Gas
Electricity
Industy
6.2
A
nsumption of
m (%)
4

oward CNG
hat show the
e in usage of
be linked to
tage. During
usage of oil /
rom that in
below:

ue of import
6.6 billion
o US $ 7.0
year posting
ver, value of
y 6.2 percent
March FY 14
orresponding
e growth in
nd petroleum
ctively). The
quantity and
Agriculture
0.2
Transport
48.7
f
G
e
f
o
g
/
n
t
n
0
g
f
t
4
g
n
m
e
d

decrease in
prices of p
was global
change in
which refle
product.
14.3.2 Natu
Pakistan is
households,
major end u
of consump
There was
fertilizer in
performanc
reason of ab
to frail func
confronting
Source: Hydro

14.3.3 Elect
The consum
and is the h
prime reaso
also broug
people. Th
economic g
Industry
22.6
Transport
(CNG)
8.2
Sha
value of pe
petroleum pr
increase in p
its consump
ect that petr
ural Gas
the larger
, power, fer
user of gas. In
ption of gas
sharp decl
ndustry whi
e of fertilize
bnormal redu
ctioning of SN
g the worst
ocarbon Develo
tricity
mption of ele
highest amon
on is techno
ght significa
here is cyc
growth and
Power
27.5
t
are of sectors
J u
-5
0
5
10
15
1
9
9
5
-
9
6
G
r
o
w
t
h

R
a
t
e

(
%
)
Fig-14.11
Source: HD
etroleum pro
roducts glob
price of petr
ption pattern
roleum crud
consumer o
rtilizer and
n last two de
among its u
line in gas
ich had neg
er sector. In
uction in gas
NGPL-based
gas crisis
Figure 1
opment Institute
ectricity has
ng all source
ological adv
ant change
clical relati
electricity
s in Consump
(%)
uly-MarchFY 13
1
9
9
6
-
9
7
1
9
9
7
-
9
8
1
9
9
8
-
9
9
1: Relationsh
and elect
DIP, PBS and EA
duct is decli
bally. Even t
roleum crude
n had been
e is an inel
of the gas.
industry are
ecades the pa
users is chan
consumptio
gatively affe
FY 13, the m
s supply was
d fertilizer pl
which caus
14.10: Share o
e of Pakistan
increased rap
es of energy.
vancement w
in lifestyle
ionship betw
consumptio
Households
23.2
Comm
3.3
Cem
0.
Fertilizer
15.2
ption of Gas
1
9
9
9
-
0
0
2
0
0
0
-
0
1
2
0
0
1
-
0
2
ip between gr
tricty consum
A Wing
ining
there
e, no
seen
lastic
The
e the
attern
nged.
on in
ected
main
s due
lants,
ed a
shar
ferti
Paka
Agri
shor
ferti
19 p
perio
com
hous
prio
indu
oil w
use
to l
pres
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cons
of sectors in c
pidly
One
which
e of
ween
n. It
impl
by h
whic
the
adva
grow
cons
ercial
3
ment
.1
Industry
21.7
2
0
0
2
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0
3
2
0
0
3
-
0
4
2
0
0
4
-
0
5
Year
rowth of GDP
mption
rp decline
ilizer plants
arab, Dawoo
itech, remai
rtages. Durin
ilizer industr
percent whic
od last fiscal
mmitment of
sehold, powe
rity basis. H
ustry is declin
with gas. Ti
of gas (CNG
load manag
scribed hours
sed decline
sumption as
consumption
lies that the
higher grow
ch is obviou
standard of
ance techno
wth of GDP
sumption of
Power
26.1
y
Transport
(CNG)
7.0
Share of se
2
0
0
5
-
0
6
2
0
0
6
-
0
7
2
0
0
7
-
0
8
2
0
0
8
0
9
rs
P (fc)
in the ov
on the SNG
od Hercules,
ined the ma
ng J uly-Mar
ry in gas co
ch was 15 p
l year. This m
the governm
er industry a
However, the
ning as powe
ll FY 13, th
G) as input in
gement in g
s / days for s
in the sha
shown below
of Gas
period of hi
wth rate of
us in the sens
f living or
ological go
will negativ
electricity as
ectors in Con
(%)
J uly-MarchFY
2
0
0
8
-
0
9
2
0
0
9
-
1
0
2
0
1
0
-
1
1
2
0
1
1
-
1
2
Electricity Con
GDP (fc)
Energy
erall produ
GPL networ
, Engro's ne
ain sufferers
rch FY 14, t
onsumption
percent in co
major upturn
ment to pro
and fertilizer
e usage of g
er industry ca
here was inc
n transport, h
gas sector
supplying CN
are of transp
w:
igher growth
electricity c
se that grow
production
oods. Likew
vely affect th
s shown belo

H
nsumption of
Y 14
2
0
1
2
-
1
3
2
0
1
3
-
1
4
nsumption
y
227
uction. Four
rk, including
w plant and
of the gas
the share of
increased to
orresponding
n was due to
ovide gas to
r industry on
gas in power
an substitute
crease in the
however due
there were
NG that had
port in gas
h is followed
consumption
wth improves
by utilizing
wise, lower
he growth of
ow:
ouseholds
23.2
Commercial
3.1
Cement
0.0
Fertilizer
19.0
f Gas
7
r
g
d
s
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o
g
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n
r
e
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d
s
d
n
s
g
r
f
228
P

The lower g
occurred du
growth in c
will lower t
Prior to un
sectors ex
consumptio
household.
percent in 1
industrial u
of load sh
home appli
made the sh
increased to
1993. In
consumptio
10 percent
transformat
industrial
agriculture
almost 26
significant
14.3.4 Coal
Pakistans c
bituminous.
2000. Abou
the country
and 56.1 p
decrease o
percent, res
has been s
hence utili
momentum
Pakistan ha
185 billion
identified at
The power
significance
Pakistan Eco
growth in el
ue to loss of g
consumption
the growth o
nbundling o
xhibit a ch
on pattern,
The share o
1993 to 29 p
units are usin
edding. Incr
iance due to
hare of reside
o 47 percent
case of ag
on decreased
t in 2013,
ion away
and servic
in real GDP
percent in
change in
l
coal generall
. Coal con
ut 39.1 perce
has been ut
percent by
of 3.46 perc
pectively. A
switched ove
ization of
.
s huge coal r
n tons; in
t Thar coal f
r project at
e due to
0
1993
1998
2003
2008
2013
Y
e
a
r
s
Fig14.12
Source: Hydr
onomic Surve
ectricity con
growth mom
n of electrici
of GDP in ne
of WAPDA
hange in
especially
f industry de
percent in 20
ng own capt
rease in usa
o technologic
ential electric
t in 2013 fro
griculture se
from 15 pe
this show
from agricu
es sector.
P declined to
1990s.Howe
the consum
ly ranks from
nsumption is
ent of total c
tilized by bri
cement fac
cent and in
Almost whole
er from furn
ingenious c
resources est
ncluding 17
fields (Sindh
Port Qasim
importance
% 1
2:Shareinele
rocarbonDevelop
ey 2013-14
nsumption ca
mentum and l
ity in one pe
ext period. P
A to present
their electr
industry
ecreased from
013 because
tive unit bec
age of elect
cal improvem
city consump
om 36 perce
ector, electr
ercent in 199
w the struc
ulture secto
The share
21 percent
ever, there i
mption patter
m lignite to
s varying s
coal consume
ick kilns indu
ctories, show
ncrease of
e cement indu
nace oil to
coal is gai
timated to ex
75 billion
Province) a
m had a sp
of Karach
10%
ectricityconsu
pment Institute of
an be
ower
eriod
olicy
mak
cons
high
dow
t, all
ricity
and
m 36
large
cause
trical
ment
ption
ent in
ricity
93 to
ctural
or to
e of
from
is no
rn of
com
com
almo
year
sub-
since
ed in
ustry
wing
1.83
ustry
coal
ining
xceed
tons,
lone.
pecial
hi in
Paki
the
prod
plan
a ca
Gad
6,60
14.4
The
poss
susta
gove
been
deve
(AR
Dev
20%
umption
f Pakistan
P
e
r
c
e
n
t
a
g
e

S
h
a
r
e

(
%
)
kers need p
sumption of
her growth i
wn the pace o
mmerce. How
mposition of
ost similar t
r as shown be
istan's econo
economic d
duction of el
nts is cheaper
apacity of 66
dani in Baluc
00 MW in the
4 Alternative
Governmen
sible measur
ainable dev
ernment in it
n giving d
elopment of
RE) resources
velopment Bo
30%
Agric
Com
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Household
Figure
plans to a
f electricity
in GDP whi
f growth in c
wever, during
share of ele
to that in co
elow:
omy and it c
development
lectricity fro
r, ten coal-fi
60 MW each
chistan, whic
e national gr
e Sources of
nt of Pakist
res to ensur
velopment
ts bid to dive
due attentio
f Alternative
s in the coun
oard (AEDB
40%
PercentageS
cultural I
mercial H
d Commercial
Secto
e 14.13: Shar
consump
J uly-Ma
address the
that will o
ich otherwis
coming years

g J uly-March
ectricity con
orresponding
an play a cr
of Pakistan
om the coal
red power p
h, are being
ch would ad
rid.
f Energy
tan (GoP) i
re energy s
in the co
ersify its ener
on towards
e / Renewa
ntry. Alterna
B) has been m
50%
Share(%)
ndustrial
Household
Industrial Agric
rs
re in electricty
tion
arch FY 13 J uly-M
growth in
ccur due to
se will slow
s.
h FY 14, the
nsumption is
g period last
rucial role in
n. Since the
fired power
rojects, with
g initiated at
dd a total of
s taking all
security and
ountry. The
rgy mix, has
fast track
able Energy
ative Energy
mandated to
cultural
y
March FY 14
n
o
w
e
s
t
n
e
r
h
t
f
l
d
e
s
k
y
y
o
Energy
229

act as a central agency for development and
promotion of Alternative & Renewable Energy
(ARE) technologies in the country and to facilitate
the private sector investment in this sector.
Steps Taken By AEDB to Attract Investment in
the Sector
AEDB has undertaken a number of supportive
measures in order to promote ARE technologies and
to attract private sector investments, which include;
Identification of new corridors for wind and solar
energy projects development. Resource
assessment of these corridors is underway.
National Grid Code for wind power projects has
been amended. Grid Integration Plan 2010 -2015
for wind power projects has been developed by
AEDB to support NTDC.
Local manufacturing of micro wind turbine has
been started. Manufacturing for large wind
turbines is also being encouraged. M/s DESCON
has setup a wind turbine tower manufacturing
facility and has provided towers for the first wind
project in Pakistan. M/s Three Gorges
Corporation / CWE (China) has also established a
tower manufacturing facility which will be
upgraded to wind turbine assembling facility in
future.
Issues related to financing of projects have been
resolved and now leading financing agencies like
International Finance Corporation (IFC), Asian
Development Bank (ADB), Overseas Private
Investment Corporation (OPIC), Economic
Cooperation Organization (ECO), Trade Bank
etc. are offering financing to wind power projects
in Pakistan.
14.4.1 Wind
Thirty five wind power IPPs holding LOIs issued
by AEDB are at various stages of project
development.
Operational (Achieved Commercial Operations
Date)
FFC Energy Limited: 49.5 MW wind project,
J hampir, Distt. Thatta, Sindh
Zorlu Enerji (Pvt.) Ltd. 56.4 MW wind
project, J hampir, Distt. Thatta, Sindh.
Under Construction
50 MW Three Gorges First Wind Farm
Pakistan (Pvt.) Ltd., J hampir Sindh
50 MW Foundation Wind Power I Ltd.
Khuttikun, Gharo, Sindh
50 MW Foundation Wind Power II (Pvt.)
Ltd., Khuttikun, Gharo, Sindh
Twelve projects with a cumulative capacity of
630 MW are expected to achieve Financial Close
by 2014.
NERPA announced a new upfront tariff of US
cents 13.5244 per kWh on 24th April 2013 for
500 MW wind power projects. The wind power
companies interested in opting Upfront Tariff
will have to achieve Financial Close of their
project by September 30, 2014.
14.4.2 Solar
In Solar Energy, 24 LOIs for cumulative capacity
of approximately 792.99 MW On-Grid Solar PV
power plants have been issued. Four (4)
companies have submitted the feasibility studies
of their projects and one feasibility study is
approved by AEDB. Other sponsors are at the
stage of preparation of feasibility studies
Solar Village Electrification Program was
initiated under PMs directive. 3000 Solar Home
Systems have been installed in 49 villages of
district Tharparkar, Sindh. Another 51 villages in
Sindh and 300 villages in Baluchistan have been
approved for electrification using solar energy
and will be implemented shortly.
AEDB in light of SRO 575(1)12006 issued duty
exemption certificates for a large number of solar
panels / solar modules to private sector
companies for installation / generation of almost
64.57MW of energy in the country. These solar
panels / solar modules are deployed all over the
country.
AEDB issued tax exemption certificate for
import of almost 16715 units of Solar Water
Heaters in the country. These heaters are
deployed all over the country especially in
Baluchistan, Gilgit-Baltistan, Khyber
Pakhtunkhwa and Northern Punjab.
AEDB also issued tax exemption certificate for
import of about 1429 units of Solar Water
Pumping System in the country. These water
pumping systems are installed for community
drinking and agriculture purpose all over
Pakistan.
14.4.3 Biomass / Waste-to-energy
Framework for power Co-Generation has been
approved by ECC for bagasse/biomass based sugar
industry projects. 1500-2000 MW of power is
expected to be generated in next 2-3 years. LOIs has
been issued to following investors / sugar mills
under this framework;
M/s J DW Sugar Mills Unit-II (26 MW), Rahim
Yar Khan, Punjab.
230
Pakistan Economic Survey 2013-14

M/s J DW Sugar Mills Unit-III, (26 MW),
Ghotki, Sindh.
M/s Hamza Sugar Mills Ltd., (15 MW)
M/s RYK Sugar Mills Ltd., (19 MW) Rahim
Yar Khan, Punjab.
M/s Chiniot Power Plant, (15 MW), Chiniot,
Punjab.
14.4.4 Small / Mini / Micro Hydro
Eight hydro projects have been initiated under the
Renewable Energy Development Sector
Investment Program (REDSIP) with the support
of Asian Development Bank (ADB). These
projects are being implemented in Khyber
Pakhtunkhwa and Punjab with an estimated cost
of US $ 290 Million.
Another 02 small hydro power projects have been
initiated under REDSIP. PC-I for these projects
have been approved. Loan approval from ADB is
awaited.
The Government of Punjab issued LOIs to
private investors for establishment of 10 small
hydro projects with a cumulative capacity of 142
MW at different location in Punjab.
AEDB is building capacities for private sector
investment in Khyber Pakhtunkhwa (22 projects
of cumulative 92 MW capacity through
Pakhtunkhwa Hydel Development Organization
(PHYDO) and Punjab (30 projects of cumulative
240 MW capacity through Energy Department /
Punjab Power Development Board (PPDB).
AEDB initiated a program with the assistance of
GIZ support to assist the provinces solicit private
investments in small hydro sector; under this
program Pre-Feasibility Studies for 25 hydro
sites in AJ K, Sindh, Punjab and Khyber
Pakhtunkhwa with the cumulative capacity of
284.14 MW have been completed.
Public sector Hydro power projects initiated in:
Khyber Pakhtunkhwa (worth U$ 150.99
Million, of 17.0MW, 36.6MW and 2.6 MW)
Punjab (worth U$ 138.74 Million, of
5.38MW, 4.04MW, 2.82MW, 4.16MW and
7.64MW)
Gilgit-Baltistan(worth U$ 71.12 Million, of
26MW and 4MW).
14.4.5 Clean Development Mechanism (CDM)
CDM is one of the instruments that developers of the
Alternative and Renewable Energy (ARE) Projects
pursue and earn financial returns by getting their
projects registered with CDM Executive Board and
selling the accrued Certified Emission Reduction
(CER) certificates in the international carbon
market.
Way Forward
Realizing the criticality of energy for economic
growth, it is the main focus of Pakistan Vision 2025.
The vision aims at ensuring uninterrupted access to
affordable and clean energy for all sections of the
population and aimed at resolving structural changes
within the energy sector are fundamental to future
economic prospects. The main elements of this
vision include:
1. Optimize energy supply mixeconomic,
scalable, indigenous by 2025
2. Reduce cost per unit
3. Reduce supply gap by 2018 and exceed demand
gap by 2025
4. Create and encourage culture of conservation
and efficiency in the usage of energy
Nonetheless, these projects have long digestion
period and would come in to system in few years. It
is also highlighted that through efficient reallocation
of natural gas based on economic sense is essential
to get best value for money.