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SHAHZAD SALIM ID: 2001-1-27-1859
INTRODUCTION Pakistan‘s economy has grown strongly over the past 3 years, at an average pace of 7%. Over the last 3 years ,improved business confidence and rising inflows of foreign direct investment (FDI) have buoyed private investment .Pakistan is currently facing electricity shortfall of around 1000MW. Everyone agree s that an essential precondition for industrial development is an uninterrupted supply of power. Although the installed capacity for generation of electricity in the country is 19439 megawatt, the actual production does not exceed 14000 megawatt as against the peak demand of 15000 megawatt. The demand for power will increase by 16548 MW by 2007 and 20584MW by 2010, according to PPIB source.
SOURCES OF ENERGY & POWER GENERATION
There are different natural sources for generating energy in a country. Such sources are thermal, Oil, gas, hydel, coal, solar and wind energy. According to reliable estimates , the total generation capacity of energy in Pakistan currently stands at 20,184MW, while total demand is calculated at 21,000MW and to reach 20,081MWby 2010. It seems that demand of energy is rising by 8% per year. Experts had warned last year that the country may be facing a shortage about 1000MW by 2007, which may rise to 5000MW by 2010 and 10000 MW by 2020. This phenomenon basically, forces the authority into load shedding on a large scale in the years to come. The per capita consumption of energy in Pakistan is only MBtu.It is as high as 165MBtu in UK. 92MBtu in Malaysia, 34MBtu in China, 18MBtu in India etc. Similarly, the consumption of energy by human being in kilowatts hour are :USA-11,753,Japan-6,165,Singapore -4,699,Malaysia-1,145,Iran-724, Thailand -635,Chaina -448,India-380 and Pakistan-340.It is an established fact that the per capita energy consumption reflects the industrial advancement of a country and the above energy consumption figures clearly indicate the level of development in these countries .
33% on hydro and remaining on coal’ nuclear and renewable electricity.33% on imported oil.Coal deposits in Thar were discovered in 1991.33% on imported oil.175 million tons (PPIB sources ) which is one of the largest coal reserves of the world whereas their utilization for electricity generation is barely one percent..Sindh accounts for 99. HYDRO POWER: Our first choice should be hydro power and then indigenous coal for power production but the biggest irony of Pakistan is that we have made our best hydro projects . Keeping in view the current power mix..e. we would be facing water crises as well and time will not allows us to go back to rectify . a balanced power profile would require a fair balance among various sources of power with no excessive reliance on any single source INDIGENOUS RESOURCES: N a tu r a H y d ro Pakistan is fortunate enough to have two cheap indigenous resources for power generation i.7% of Pakistan ‘s 185. Estimated coal reserves of Pakistan are around 185.175 million tons are located in Thar. With passage of time Oil plants efficiency is decreasing even through certain deficiencies are restored after annual outages or major service. since then it is evident that Pakistan ‘s electricity future lies in indigenous coal as well.Down the road. GAS: Currently about 30% of Pakistan’s power supply is based on natural gas.PAKISTAN POWER SUPPLY RESOURCES 33% Currently about 30% of Pakistan’s power supply is based on natural gas.33% on hydro and remaining on coal’ nuclear and renewable electricity.But since then for some unknown resources no progress has been made for the development of the Thar coal mines. which Pakistan has 33% 30% Im p o r t . An unbalanced power profile carries serious repercussion. it is essential to concentrate on indigenous and cost effective sources for power generation. But it is sheer bad luck that we have not been able to use both of these resources effectively. water and coal. Thus this leaves coal.
we would have got the international investor and by now we would have developed the coal mines as well.000c(27000. The area s suitable in Karachi is Hawke’s bay and National Highway for installing both solar and wind energy plants to produce electricity. Needless to say.1. The average distance from the earth to the sun is 93000. it was decided be economic coordination committee of government of Pakistan that only dual fuel plants i. The government has embarked on a well planned policy to generate more power through private investment. Since long an integrated coal based power plant is approved in the area. If we had taken a national decision of making indigenous power resources the prime source of the country’s power generation program. abundant supply of coal at home will greatly reduce pressure on imported oil. The sun is a big atomic . By weight .5% all other elements. It volume is big enough to hold 1.4 million earths in side it. The sun temperature is 6000c (10000f) at the surface and 13000. In this situation. The diameter of the sun is 870000 miles (1393000kilometers). WIND ENERGY Wind energy is an ideal renewable energy because it is a pollution –free.e. which gives it a competitive edge to utilize the priceless resource to overcome the problem or energy shortage. COAL: The discovery of sizable coal deposits in the province of sindh is of significance. it is 90% hydrogen . 8% helium.100 times larger than the earth . This is the time. It takes light eight minutes and eighteen second to travel from the sun to the earth.5%carbon.in abundance. as a safe . The Sun. It does not create green house gases and not produce toxic or radioactive waste .Pakistan lies in the region trade winds. Various power sector experts believe that under current circumstances this policy provides best possible incentives to investors. when we have to decide how we would like to see the future of Pakistan. it dose not require fuel and also is extremely green. infinitely sustainable from of energy. using natural gas and furnace oil simultaneously. it wouldn’t be wrong to say that 2002 power policy along with its amendments is one of the best power policies whereas it is fundamentally wrong to compare it with 1994 power policy. the only main source of light in this world is a ball of hot gases. It was speculation till 2004-05 but in early 2005-06 becomes obvious that Pakistan would be facing shortage of natural gas in year ahead which will certainly make it difficult to supply gas smoothly to new power plants and even would not be available for existing power plants.000 miles.000f)at the centre .cheap and reliable source to meet the power needs of the country for the foreseeable future. would be allowed to be installed for power generation. nitrogen and oxygen and 0.
Like other stars. Solar energy also absorbed by plants.furnace that works by converting hydrogen into helium . The sun energy out put is estimated to be 386billion megawatts. In15 minutes. which lifted into atmosphere. The sun generates energy in its core in a process called nuclear fusion.The energy comes from the sun it self . The sun has been producing energy for million of years. Holland and China plan to invest in Pakistan in wind energy project. The energy in fossil fuels(e. although the term usually refers to the visible light of the sun.China has already produced and installed 14 wind turbines of 30&500 watts capacity in coastal area of Sindh and Baluchistan Pakistan has planned to set up wind energy projects through the private sector to generate 700 megawatts by 2015 and 9700 mega watts by 2030. WIND ENERGY PROJECTS The govt. another 30% is used to evaporate water.Solar energy is any form of energy radiated by the sun including light . the lands and the oceans. Every day the sun radiates or sends out enormous amount of energy .In Pakistan the sun gives bright light from March to October every year. The sun contributes about 99. space heating and building .g.drying agricultural outputs buildings. Solar energy is energy that comes from the sun. Today people use solar energy to heat building s and water and to generate electricity and to evaporate the sea water for making salts . Difficulties with these fuels have led to the invention of devices that directly convert solar energy into usable forms of energy such as electricity Solar energy is used heating water for domestic use . . sunlight generates energy as all forms of sources on the earth generate energy in a whole year. About 15% of the sun energy that hits the energy is reflected back into space. The rest could be used to supply our everyday needs . main focus is to provide cheaper electricity to the people of remote village through wind and solar generating projects of these areas and 500-600MW power energy capacity installation planss are in contention.86%of the total mass of the entire solar system. Germany.radio waves and X-rays. Solar energy can be converted directly or indirectly into solar forms of energy such as heat and electricity . Solar energy is needed by green plants for the process of photosynthesis. there fore devices may be made to capture sunlight for making energy in country . coal and oil) and other organic fuels (wood) is derived from solar energy . dryings agricultural out puts and generating electrical energy electricity can be produce directly from solar energy photovoltaic device or directly from steam generation using solar thermal collections to heat different things. which is the ultimate source of all foods. the sun is a big gas ball made up mostly of hydrogen and helium. produces rain fall.
Presently. which can restore. along with the continuous hike in furnace oil prices which will make them unavailable in near future? Such an unbalanced power profile carries serious repercussion. o and m passage of time their efficiency is decreasing even Pakistan has lot of oil fired power G v r with n plants e n e t 8 % through certain deficiencies are restored after annual outages or major over hauls. a balanced power profile would require a fair balance among various sources of power with no excessive reliance on any single source one of the few matters which must be considered in establishing the power portfolio is that excessive reliance on any single source especially foreign sources on which we have no control over supply and price can make things miserable ant time. I d sra n uti l 3% 4 .USERS OF ENERGY A rc l ua gi ut r l 8 % IMBALANCE POWER PROFILE Looking at the power portfolio of Pakistan it looks as if we are living in an oil rich country. Beside permanent deficiency.
Natural gas and oil process are expected to remain volatile in coming years.S According to the well respected center for the environmental energy engineering (CEEE) study “the international oil outlook is just as discouraging as the US natural gas situation – production is peaking when demand is poised to rise rapidly”. such as: Rapidly rising oil demand in the developing countries specially china and India Under-investment in drilling and refining capacity Slow discovery of new reserves Shortage of refining capacity in the U. The OPEC report cited in the detailed report concurs with the threats to price stability while down-playing any major geo-political threat “uncertainties over future economic growth. We could see significant price increases and possibly shortage during periods when demand exceeds supply. On top of this. government policies and the rate of development and diffusion of newer technologies raise questions over the future scale of investment that will be required. coupled with long lead times. medium-term prospects suggest there is a need to ensure that the level of spare capacity is consistent with such stability…it is nevertheless considered a sound conclusion that the oil . These uncertainties. However it needs to be acknowledged that the timing and magnitude of these price/supply problems will be greatly affected by the factors that are difficult to predict including global level seems to be hovering around oil. implicitly or explicitly. inevitably complicate the task of maintaining market stability. which increases susceptibility to disruption and price volatility. Price spikes could be extremely high by historical standards because much of the demand is highly inelastic.GLOBAL OIL ORICES APPREHENSIONS KEY THREATS/ISSUES (RISK) Many of the factors behind the recent surge in prices are likely to persist. Another major concern is that the current lack of surplus production capacity.
gas. We should seriously understand our need and must have to decline our reliance on imported expensive fuel. as far as fuel for transportation is concerned the share of oil (petrol products and diesel) will continue to decline rapidly in favor of CNG/LPG. But the point of concern for Pakistan is that how its economy would absorb at least US $ 100 per barrel. nuclear and alternative sources thereby decreasing the market share of oil products over the medium term. Primary impact on Pakistan: in a continuous high price scenario the country will have no option but to accelerate the shift of coal. World has witnessed that oil prices reached new heights in resent UK sailors crises with Iran. In terms of power generation the share of oil is expected to decline from a current 33 percent to 24 percent by 2010.reserves are sufficient to satisfy world oil demand growth over the projection period (to 2025) …. EXCESSIVE RELIANCE ON OIL We are living in a highly volatile region of World and under current US and Iran crises.it is generally agreed that OPEC will increasingly be relied upon to supply the incremental barrel. Oil prices have been seesawing between US$60 and US& 70 per barrel while it is hard to forecast how international oil market reacts if US Iran relations get worse. KEY OPPORTUNITIES (UPSIDES) Although in absolute terms capacity expansions would still be required both at the production end (refineries and related facilities) as well as distribution/marketing end (petroleum marketing companies). Whatever be the US strategy for the middle East and Central Asia. Pakistan used billion of dollars its prestigious tax payer’s money for import of furnace oil for these power plant. which seems to Have no early solution. . no one is sure where oil prices will reach. During the last fiscal year.
2percent of the total energy consumption followed by the industrial sector 34.The acute shortage of electricity has resulted in load shedding during the current summer season. The gap between demand and supply of power and interrupted supply of power to industrial sector is retarding the country exports.5%.The share of commercial energy source during 2003-04was recorded as: natural gas 49.9% or 6.8 million toe . The total installed capacity of IPPs is 5859 MW (30.9%. The total installed capacity of WPADA was 11363 MW which accounts for 58% of the total capacity .It was 45. Exploration and utilization of alternate sources of energy has also stared in the country. Pakistan is now faced with a most serious energy short fall . plenty of sunshine throughout the year and includes a massive wind energy corridor in South. showing an increase of 56%. Due to its ideal geographic location. Pakistan has become the leading country in Asia and third largest user of CNG in the world after Argentina and Brazil. The velocity of wind in some of the coastal areas is strong enough to run turbines and generate power .The KESC 1758MW(9%)and nuclear power is 462WMor 2.8% and LPG 0.Of this. The total energy supplies measured in terms of ton s of oil equivalent (toe) stood at 50million toe in 2003-04.7%. By March 2006. hydro electricity 12. With this development s. coasting the economy million of rupees . increased by 4.1% or 4900MW.The total in stalled capacity of energy generation in recent year. the Chesham Nuclear power plant are the four main public sector organizations involved in energy power generation. and projected a total demand that stands at 21500 by the year 2010 and 36358 MW by 2025. about 700. The independent power projects are also involved in power generation.295million cubic feet per day in 2003-04. hydel accounts for 56. the commercial sector 5. transmission and distribution of the electricity in the country .ENERGY SECTOR OF PAKISTAN The energy sector of Pakistan comprises of Hyde power. oil. The primary energy supplies have been raising steadily over the last several years . gas petroleum.other the government sector 7.000 vehicle s during the same period last year.7% .4percent.4% .5% and street light 0.According to an official figure . remaining 20184MW.000 vehicles were converted to CNG as compared to 450. While following the traditional power resources one should look at . the household sector has been the largest consumer of energy accounting for 44. the agriculture sector 7.7%.Wpada .4% . Pakistan is blessed with un limited natural resources.4percent in 2002-03 and further grew by 8percent in 2003-04 to stand at 50.4% .The government is promoting the use of compressed natural gas (CNG) in a big way to reduce the pollution level being caused by vehicles using motor gasoline and to improve the ambient air quality .4% .817barrels per day. 2 million toe in 2001-02.coal 6. coal and nuclear . while natural gas production was 3.Electricity demand is increasing at national level at the rate of about 1000 MW per year. the KESC.463 MW and the thermal accounts for 43. Presently 900CNG station s is operational in the country while 200 are under construction. oil 29.1%).The average oil production was about 60. nuclear energy 0.The continuous power shortage is creating hurdles in the current paces of economic growth of the country . the KANUPP.
the problem doesn’t seem to resolve as since long fuel has been transporting from Karachi to rest of the country but now onward it might also be coming from Gawadar.The transportation system from this area needs a time test. Pakistan has abundant energy resources. like other developing countries of the world is facing a serious challenge of energy deficit. Renewable energy resources can play an important role in bridging this deficit. More importantly. The government has set out an action plan to achieve exploration and maximum utilization of indigenous resources like oil.fuel handling capacity in Karachi is reaching its maximum and with the constructions and operation of a new seaport at Gawadar. where it is needed most. ALTERNATE POSSIBILITIES FOR PAKISTAN The primary impediment in oil extraction has been that of the hard crusted of the nature of terrain and the resultant capital investment required make much of the country’s oil reserve largely inaccessible especially given preemptive prices of 30 -$35 per barrel. there are few reservation on this which can only be resolved with the passage of time.the situation also raises some new issued of the security of supplies . We must exploit these means to over come the energy shortage.Pakistan. Pakistan government is putting greater emphasis on renewable energy and has set a target of 19%renewable energy of 2710MW in the country’s energy by 2015. which needs to be harnessed through an institutionalized strategy for optimum utilization . In relative term the expected return to investor given low oil prices do not make the returns as attractive . expensive fuel is not the only issue . Holland and China plan to invest in Pakistan in wind energy project s foe a total capacity of about 1000MW . There are other alternative renewable energy sources such as wind and solar energy. INFRASTRUCTURAL ISSUES In additionally to the huge financial burden on the economy on the people .The govt. gas and coal and alternative sources like solar and wind energy. main focus is to provide cheaper electricity to the people of remote village through wind and solar generating projects of these areas and 500-600MW power energy capacity will be installed by 200.secondly.Germany. renewable energy can take electricity to remote rural areas.China has already produced and installed 14 wind turbines of 30&500 watts capacity in coastal area of Sindh and Baluchistan The of Pakistan has planned to set up wind energy projects through the private sector to generate 700 megawatts by 2015 and 9700 mega watts by 2030.Pakistan aims at its development requirements keeping in view the institutional trends in the energy sector and availability of resources. Wind and solar energy are producing electricity to 100 megawatts with the collaboration of Canada since 2006. As of now.the other alternate energy sources.
ash and moisture and therefore more detailed investigation and Pilot power plant is required before selecting the technology and module of commercial unit based on indigenous coal. The project is estimated to have an installed capacity of 969 MW and an annual energy generation capability of 5150 kWh. . Natural Gas is the obvious mix in Pakistan energy mix and plays the crucial role in the economy. since the coal has high amount of sulphur. meeting about the 44% of the country’s supply mix for commercial energy.4 billion and the total cost of the project has been estimated at $2. Pakistan coal reserves are fifth largest in the world but only 4 % of the electricity is generated by coal. Pakistan is the third largest user of the CNG in the world after Argentina and Brazil.The consumption of the gas has been growing at the rapid rate of nearly 7% over the past decade. Thar coal reserve has the potential to generate more then 100. Pakistan would have to forfeit its rights over River Neelum and allow India to use these waters for power generation. In the event of any further delay in the construction of the said project. The official explained that the cost of the project was estimated at $1.000 MV of electricity for next 30 years. In a nutshell barring major technology in successful ongoing commercialization. there already exist the country gas provide the country with a considerable buffer and alternative to absorb and tide over the expected shocks coming from the world oil prices that are likely in the near and medium term a potential large enough to make the country the envy of most developing countries of the world. Government of Pakistan has approached Kuwait Fund and French financers M/S BNP Paribas for arrangement of the foreign exchange component of $785 million. GOVERNMENT SET TO START 969MW HYDROELECTRIC PROJECT The government is all set to start physical work for the construction of much awaited $2. Thar coal reserve could face possible technology impediments in ongoing commercialization.The construction of Neelum Jhelum Hydroelectric Project would enable Pakistan to get water usage rights over River Neelum. said the official.14 billion Neelum Jhelum Hydroelectric Project in the next fiscal year 2007-08.14 billion.