FUEL AND ENERGY

Handouts

CURRENT BUSINESS AFFAIRS

Contents
Fuel.................................................................................................................................................................................... 2
Fuel ................................................................................................................................................................................ 2
Sources of Fuel .............................................................................................................................................................. 2
1. Solid Fuel ........................................................................................................................................................... 2
2. Liquid Fuels ....................................................................................................................................................... 2
3. Gaseous ............................................................................................................................................................. 3
Energy ............................................................................................................................................................................... 3
Energy ........................................................................................................................................................................... 3
1. Energy Crisis in Pakistan.................................................................................................................................... 3
2. Performance of Pakistan Power Sector Players ................................................................................................ 4
3. Oil (Petroleum Product) .................................................................................................................................... 6
Conclusion ..................................................................................................................................................................... 7

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 Fuel
Fuel
A fuel is any material that can be made to react with other substances so that it releases chemical or nuclear
energy as heat or to be used for work.

Sources of Fuel
Chemical fuels are substances that release energy by reacting with substances around them, most notably
by the process of combustion. Chemical fuels are divided in two ways:
 First, by their physical properties, as a solid, liquid or gas.
 Secondly, on the basis of their occurrence: primary (natural fuel) and secondary (artificial fuel).
Thus, a general classification of chemical fuels is:

PRIMARY (NATURAL) SECONDARY (ARTIFICIAL)

SOLID FUELS Wood, Coal, Peat, Dung Coke, Charcoal
etc.
LIQUID FUELS Petroleum Diesel, Gasoline, Kerosene, LPG, Ethanol etc.
GASEOUS FUELS Natural Gas Hydrogen, Propane, Methane, CNG, LNG etc.

1. Solid Fuel
Solid fuel refers to various types of solid material that are used as fuel to produce energy and provide
heating, usually released through combustion. Solid fuels include wood, charcoal, peat, coal, and pellets
made from wood, corn, wheat and other grains.
Solid fuels have been used by humanity for many years to create fire. Coal was the fuel source which enabled
the industrial revolution, from firing furnaces, to running steam engines. Wood was also extensively used to
run steam locomotives. Both peat and coal are still used in electricity generation today. The use of some
solid fuels (e.g. coal) is restricted or prohibited in some urban areas, due to unsafe levels of toxic emissions.
The use of other solid fuels such as wood is decreasing as heating technology and the availability of good
quality fuel improves.

2. Liquid Fuels
Liquid fuels are combustible or energy-generating molecules that can be harnessed to create mechanical
energy, usually producing kinetic energy; they also must take the shape of their container. It is the fumes of
liquid fuels that are flammable instead of the fluid.
Most liquid fuels in widespread use are derived from the fossilized remains of dead plants and animals by
exposure to heat and pressure in the Earth's crust. However, there are several types, such as hydrogen fuel
(for automotive uses), ethanol, jet fuel and biodiesel which are all categorized as a liquid fuel.
Some common properties of liquid fuels are that they are easy to transport, and can be handled with relative
ease. Also they are relatively easy to use for all engineering applications, and home use. Fuels like kerosene
are rationed in some countries, for example available in government subsidized shops in India for home use.

 Conventional diesel is similar to gasoline extracted from petroleum.

 Kerosene is used in kerosene lamps and as a fuel for cooking, heating, and small engines.
 Natural gas, composed chiefly of methane, can only exist as a liquid at very low temperatures
(regardless of pressure), which limits its direct use as a liquid fuel in most applications.
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  LP gas (LPG) is a mixture of propane and butane, both of which are easily compressible gases under
standard atmospheric conditions. It offers many of the advantages of compressed natural gas (CNG),
but is denser than air, does not burn as cleanly, and is much more easily compressed. Commonly
used for cooking and space heating, LP gas and compressed propane are seeing increased use in
motorized vehicles; propane is the third most commonly used motor fuel globally.

3. Gaseous
Fuel gas is any one of a number of fuels that under ordinary conditions are gaseous. Such gases are sources
of potential heat energy or light energy that can be readily transmitted and distributed through pipes from
the point of origin directly to the place of consumption.
Fuel gas is contrasted with liquid fuels and from solid fuels, though some fuel gases are liquefied for storage
or transport. While their gaseous nature can be advantageous, avoiding the difficulty of transporting solid
fuel and the dangers of spillage inherent in liquid fuels, it can also be dangerous.
It is possible for a fuel gas to be undetected and collect in certain areas, leading to the risk of a gas explosion.
For this reason, odorizes (smell, stink) are added to most fuel gases so that they may be detected by a distinct
smell. The most common type of fuel gas in current use is natural gas.

Energy
Energy
Energy is the property that must be transferred to an object in order to perform work on, or to heat, the
object.
According to physics there are numerous forms of energy, but our concern here in electrical energy.
Electrical energy is the energy derived from electric potential energy or kinetic energy. Electricity generation
is the process of generating electrical energy from other forms of energy.
Electricity is most often generated at a power station by electromechanical generators, primarily driven by
heat engines fueled by chemical combustion or nuclear fission but also by other means such as the kinetic
energy of flowing water and wind. There are many other technologies that can be and are used to generate
electricity such as solar photovoltaics (commonly known as solar energy).

1. Energy Crisis in Pakistan

The energy crisis start hitting in 2007 and was at peak during 2011-2012. Prior to the present government,
circular debt, weak financial position of energy companies, falling gas production, low exploitation of
indigenous coal and hydel resources, high dependence on oil/gas as power generation source and unutilized
power generation capacity were some of the significant constraints which caused severe energy shortages.
The “National Power Policy 2013” was approved by the Council of Common Interests (CCI) to address the
key challenges of the power sector and to achieve the long-term vision of the power sector. The policy
focused on short term, midterm and long term objectives to make the power sector sustainable.
In short run, two critical issues were addressed on fast track. One issue was inefficient recovery system while
the other was effective control of transmission and distribution losses. It is worth mentioning that Ministry
of Water and Power has shown significant improvement in both issues.

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In medium term, National Power Policy 2013 had also focused on reducing the price by introducing
generation on cheaper fuels. Altering the fuel mix towards less expensive fuels will lead to low cost energy.
In long term, the goal is to add sustainable and affordable power generation to the national grid by
constructing more dams. Energy imports of liquefied natural gas (LNG) and coal along with utilization of
domestic resources like construction of Thar coal mines, hydro power stations, nuclear power plants, as well
as several solar and wind farms will significantly reduce the country’s reliance on oil and improve the energy
mix.
The list of Power Plants which started operation along with their respective fuel type is given below in Table.

List of Power Plants Started Operations Since 2015

2015 2016 2017
Plant Fuel Installed Plant Fuel Installed Plant Fuel Installed
Name Type Capacity Name Type Capacity Name Type Capacity
(MW) (MW) (MW)
RYKML Bagasse 30 APOLO Solar 100 Fatima Coal 120
(Ethanol) SOLAR Bagasse
FWEL-I Wind 50 Best Solar 100 Hamza Bagasse 15
Green
Quaid e Solar 100 Crest Solar 100 Bhiki Gas 760
Azam Energy
Nandipur Furnace 425 Younas Wind 50 Dawood Wind 50
Oil Wind
Sapphire Wind 50 Metro Wind 50 Sachal Wind 50
Wind
Chiniot Bagasse 62 Tapal Wind 30 Total 995
(Ethanol)
Total 717 Master Wind 50
Tenaga Wind 50
Gul Ahmed Wind 50
Chashnupp Nuclear 340
III
Total 919
Source: Ministry of Water and Power, Pakistan.

2. Performance of Pakistan Power Sector Players

i. Pakistan Atomic Energy Commission (PAEC)
Pakistan Atomic Energy Commission (PAEC) has been actively engaged in harnessing nuclear power
technology. At present, four nuclear plant i.e. Karachi Nuclear Power Plant (KANUPP) at Karachi, Chashma
Nuclear Power Plant Unit-1, Unit-2 and Unit-3 (C-1, C-2 and C-3) at Chashma (Mianwali) are operating with
gross capacity of 1,090 MW.
KANUPP has now completed forty five years of safe and successful operation. C-1 and C-2 are amongst the
best performing power stations in the country. C-3 was formally inaugurated by the Prime Minister on
December 28, 2016. Some performance parameters of these operating plants is given in the Table.

Performance of the Operating Nuclear Power Plants in Pakistan

Plants Capacity (MW) Grid Connection Electricity sent to Grid (million KWh)
Gross Net Date July 1, 2016 to Lifetime upto
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 March 31, 2017 March 31, 2017
KANNUP 100 90 18-Oct-71 293 14026
C-1 325 300 13-Jun-00 1808 32885
C-2 325 300 14-Mar-11 1654 13000
C-3 340 315 15-Oct-16 966 966

The construction of fifth nuclear plants, Chashma Nuclear Power Plant unit-4 (C-4) at Chashma site is
underway. It is expected that C-4 will be connected to the national grid in May 2017. Pakistan Atomic Energy
Commission (PAEC) is planning to intensify its activities to amplify its role towards meeting the electricity
requirements of the country. Construction of K-2/K-3 is the first major step to achieve the target of 8,800
MW nuclear capacity by 2030.
ii. National Electric Power Regulatory Authority (NEPRA)
The National Electric Power Regulatory Authority (NEPRA) is responsible for regulating electric power
services and safeguarding the interests of investor and consumers. The main functions of NEPRA are:

 It grants licenses for generation, transmission and distribution of electric Power.

 It determines tariff rates, charges and other terms and condition for supply of electric Power.
 Prescribes and enforces performances Standard.
 Addresses complaints of electricity consumers.
 Give advice/recommendations to the concerned entities including the government on various power
sector issues.
iii. Private Power and Infrastructure Board (PPIB)
The Private Power and Infrastructure Board (PPIB) is a ‘One Window’ facilitator to the private investors in
the field of power generation on behalf of the Government of Pakistan (GOP). The main achievements are:

 Successfully managed to induct 31 independent private power projects totaling about 9071 MW.
 Attracted an investment of around US$ 9.4 billion.
 IPPs are around 50% of the country's present installed generation capacity.
 Attracted leading international / local investors and lenders to the Pakistan Power Sector.
 Contributed in development of domestic capital markets.
 Supported economic growth and enhanced power supply.
 84 MW New Bong Hydropower Project, the first hydro IPP in Pakistan/AJK Commissioned.
 870 MW Suki Kinari, Financing Agreements with the Lenders Signed.
 1320 MW PQEPCL started construction activities.
 1320 MW Sahiwal Power Project started construction activities at site from its equity.
 102 MW Gulpur Hydropower Project, Ground Breaking Ceremony held on 15-October-2015.
 660 MW Engro Powergen Thar Limited started construction activities.
iv. Alternative Energy Development Board (AEDB)
To diversify energy mix and ensure energy security, the Government of Pakistan has mandated Alternative
Energy Development Board (AEDB) to 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. The current and expected status of Renewable Energy power generation projects are as under:
Wind Power Projects
Twenty Four (28) wind power projects having a cumulative capacity of 1397.6 MW are at different stages of
development / operation. In 2016, five wind power projects by;
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  Yunus Energy Ltd (50 MW)
 Metro Power Company Ltd (50 MW)
 Tapal Wind Energy Private Ltd (30 MW)
 Master Wind Energy Private Ltd (528 MW)
 Gul Wind Energy Ltd (50 MW) are situated at Jhampir
 Tenaga Generasi Ltd (49.5 MW) is situated at Gharo
Till now, twelve wind power projects of 590.5 MW cumulative capacity have achieved commercial operation
and are supplying electricity to National Grid. Eight (08) projects with a cumulative capacity of 445 MW have
achieved financial close and are under construction and expected to be completed within 2018.
Solar Power Projects
 Four solar projects (100 MW each) named Quaid-e-Azam Solar Park, Bahawalpur with different
Independent Power Producers (IPPs) with cumulative capacity of 400 MW are operational.
 Out of four, three were completed in Aug 2016. Seven IPPs with a cumulative capacity of 72.52 MW
have obtained Letter of Support (LOS) from AEDB and are in the process of achieving Financial Closing
of their projects.
 Seventeen solar power projects of 484 MW cumulative capacity have obtained Letter of Intent (LOI)
from AEDB and are at different stages of project development and will be completed during 2018-
19.
Biomass / Waste-To-Energy
In order to tap the potential of electricity generation from the sugar mills in Pakistan, the Government of
Pakistan on recommendation of AEDB announced the Framework for Power Co-Generation 2013
(Baggase/Biomass) in 2013.
Twenty Four (24) companies / sugar mills of 817.5 MW cumulative capacity have been issued Letter of Intent
(LOI) from AEDB and are at different stages of project development and will be completed during 2018-19.

3. Oil (Petroleum Product)

Pakistan mainly depends upon oil and gas resources to fulfil energy requirements. The domestic resources
of oil are not enough to meet the energy needs of a growing economy. Pakistan has to import large quantity
of oil and oil based products from Middle East countries especially from Saudi Arabia.
Transport and power are the two major users of oil. Also gas being the cheaper source, there is continuous
shift of power sector from oil to gas. To enhance oil and gas reserves, the government is trying to attract
companies to undertake new exploration and production activities. Thus, it is expected the domestic
production of oil will improve and also with exploration of unconventional oil and gas resources.
i. Natural Gas
Natural Gas is a clean, safe, efficient and environment friendly fuel. It contributes about 46% of the total
primary energy supply mix in the country. Pakistan has an extensive gas network. Government of Pakistan is
pursuing its policies for enhancing indigenous gas production as well as imported gas to meet the increasing
demand of energy in the country.
Compressed Natural Gas (CNG)
Government of Pakistan initially encouraged use of Compressed Natural Gas (CNG) as an alternate fuel for
auto-motives in order to control environmental degradation, reduce foreign exchange expenditure on
import of liquid fuel and generate employment.

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Pursuant to government’s investor friendly initiatives, Pakistan has become the world leading CNG user
country with more than 3 Million NGVs (Natural Gas Vehicles) plying on the roads. Currently more than 3,416
CNG stations have the CNG marketing licenses in the country.
However, keeping in view the mushroom growth of CNG stations in the country resulted in depletion of
natural gas reserves, Government has imposed a ban on establishment of new CNG stations in the country
w.e.f. 07.02.2008.
Government has approved provision of LNG to this sector with fiscal incentives and Sales Tax at the rate of
five %.
ii. Liquefied Natural Gas
To meet the growing energy needs of the country government largely is focusing on the alternative sources
of energy. The first LNG re-gasification Terminal was commissioned on 27th March 2015 in a record time of
less than 11 months. Since March 2015, 83 LNG Cargoes have been handled at the LNG Terminal.
iii. Coal
Constitutionally, minerals other than mineral oil, natural gas & nuclear minerals can be explored by Provincial
governments. The authority for coal exploration and development and regulation of coal sector rests with
the Provinces. Federal Government is mandated with geological surveys (that help identification of potential
mineral bearing areas), national policies/plans formulation and coordination at national and international
levels.
Federal Government has been playing facilitation role for development of coal sector as per its mandate.
Since its inception, Geological Survey of Pakistan (GSP) has been working for exploration of mineral resources
including coal as a routine job on regular basis.
So far, nineteen coalfields have been discovered in the country with total coal resource potential estimated
to exceed 186 billion tons; of which more than 185 billion tons are located in Sindh Province and over 175
billion tons in Thar Coalfield alone.
All power generation projects including those based on coal (indigenous or imported) are dealt by the
Ministry of Water & Power and Private Power & Infrastructure Board (PPIB). As per PPIB six power
generation projects based on indigenous coal with cumulative capacity of 4,290 MW and seven power
projects based on imported coal with cumulative capacity of 5,201 MW are presently under process at
various stages to be completed between 2017 - 2021.

Conclusion
The government is making all efforts to increase and diversify its energy supply with long-term vision of the
power sector to meet Pakistan’s energy needs in a sustainable manner. Pakistan has embarked on a wide-
ranging initiatives. Till now government remained successful in attracting foreign companies to undertake
new exploration and production activities. The China-Pakistan Economic Corridor (CPEC) will also become a
source of coordination for developing energy related projects through indigenous energy resources such as
coal, hydro and renewable sources.

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