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December 26, 2009 Dear Students, My name is Saqib M. Hasan lecturer of business communication at Bahria University, authorize you to prepare a report on the Energy Crisis in Pakistan. You are being asked to perform a detailed analysis on energy crisis with a specific focus on energy crisis and their solutions. The due date to submit the report is December 29, 2009. The purpose of this assignment is to integrate the material and to create an opportunity for students to utilize their professional written business communication skills. Your analysis report must be submitted in printed form and report should include the reasons of energy crisis, recommendations and conclusion. The information should represent reality and based on real facts and figures. You are free to gather information from any resource. You will therefore want to present a carefully researched, thoughtfully written, and comprehensive formal report. Use a formal report structure for the report. Be creative and complete in your analysis and presentation. You should gather and include any analysis necessary to appropriately convey an understanding of the new protocol and its impact on energy. I wish you all the best for the completion of this report.
Sincerely, Saqib M. Hasan Lecturer of Business Communication BIMCS.
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2009 Saqib M Hassan Lecturer of Business communication. Sincerely. In the end we are thankful to Allah Almighty for giving us the ability to make this report and we are also thankful to our teacher for giving us the opportunity to work on this issue.Letter of Transmittal December 26. We hope that our recommendations will be helpful and will play a key role in this case. "Energy crisis in Pakistan” This report examines energy crisis in Pakistan. alternatives and it also contains the findings and recommendations of energy crisis in Pakistan. The purpose of the report is to highlight energy crisis. We have collected information from different sources and we look forward to discuss this report with you. Energy Alternatives in Pakistan is part of our report and this is more interesting because we have prepared this portion according to our country and based on real data. Bahria University: Karachi Campus. Our group has completed the report and presentation which you had authorized us and we are pleased to present our final report. Respected Sir. Muhammad Zahid Iqbal Syed Muhammad Bilal MBA-1A Evening Bahria University Acknowledgement Page 2 of 14 .
we offer our regards and blessings to all of those who supported us in any respect during the completion of the report. We want to thank our classmates for their help. Muhammad Zahid Iqbal. Saqib Mehmood. Lastly. support. interest and valuable hints. Mr. guidance and support from the initial to the final level enabled us to develop an understanding of the subject. whose encouragement.We are heartily thankful to our Lecturer. Introduction Energy Crisis and Pakistan Page 3 of 14 . Syed Muhammad Bilal.
leading to reduced consumer confidence and spending. the production costs of electricity rise. It usually refers to the shortage of oil and additionally to electricity or other natural resources. Background Energy Crisis In Pakistan Page 4 of 14 . which raises manufacturing costs. the price of gasoline (petrol) and diesel for cars and other vehicles rises. The crisis often has effects on the rest of the economy. with many recessions being caused by an energy crisis in some form. In particular. For the consumer. higher transportation costs and general price rising.An energy crisis is any great shortfall (or price rise) in the supply of energy resources to an economy.
buses and trucks. By 2030. alternate methods like solar. Pakistan’s economy is performing at a very high note with GDP growing at an exceptional rate. For 2004-05.In its history of 58 years. the government is targeting GDP growth rate above 6%. biogas and other methods are being tried for mere survival. terrorist issues in Nigeria and high economic growth in China & India and their ever rising energy requirements. On the other hand. with every news directly or indirectly affecting the black gold industry. Pakistan’s energy requirements are fulfilled with more than 80% of energy resources through imports (Humanyun p14). Nations of the world which have their own reserves are not supplying energy resources anymore. only the old contracts made decades ago are active. international oil prices have not only broken all records but are touching new highs.Energy resources have depleted! Whatever resources are available are simply too expensive to buy or already acquired by countries which had planned and acted long time ago. Airplanes. Pakistan’s energy requirements are expected to double in the next few years. But are we doing anything about it? Lets have a look at the current energy situation of Pakistan and the world (Humayun p14). kerosene and other oil products in Pakistan? When will the nation have “load shedding free” electric supply? Have we been able to make long term contracts with the Page 5 of 14 . Moreover. all modes of transportation are coming to a stand still. trains. At domestic level. cars. Price of oil has gone above the ceiling. Many industries have closed due to insufficient power supply. and our energy requirements by 2015 is likely to cross 120MTOE. touching 8. The energy consumption is expected to grow at double digit if the overall economy sustains the targeted GDP growth rate of 6% by the government. motorbikes. oil prices don’t see any another way but to shoot upwards (Humanyun p14).5 MTOE (Million Tons of Oil Equivalent). The above is a likely scenario of Pakistan and around the globe after 25 years. the nation’s requirement will be 7 times the current requirement reaching 361MTOE. there has been only a few golden years where the economy grew above 7%. With economy growing at such a pace. With concerns over Iran’s nuclear program. Pakistan’s energy consumption touched 55. Delayed efforts in the exploration sector have not been able to find sufficient amounts of energy resources. but realistic enough to think about and plan for the future. For the coming years. the energy requirements are likely to increase with a similar rate. speculators all around the world expect oil prices to touch $100 per barrel in the coming years. What is the government doing to ensure a sustainable supply of energy resources for economic growth? What strategic steps are being taken to acquire energy resources in future? Is private sector willing to invest in Pakistan’s oil industry? What are the incentives being offered to the foreign players to continue working in the exploration sector? What hurdles are stopping other big players around the world to enter Pakistan? What is the role of gas distribution companies so far? Are the citizens of Pakistan being robbed by energy giants with ever rising utility bills? What should be the real price of petroleum. A pessimistic view.35% in 2004-05.
6 per cent during first three-quarter of last fiscal year. However. a top level WAPDA Page 6 of 14 .countries to provide uninterrupted supply of energy resources? Will the government be able to provide enough sources to the citizens for a sustainable economic growth? Have we lost the race for acquiring maximum energy resources for future survival? Current Energy Crisis in Pakistan As per Pakistan Economic Survey 2003-04. electricity consumption has increased by 8.
4 per cent. The country needs a quantum jump in electricity generation in medium-term scenario to revert the possibilities of loadshedding in future due to shrinking gap between demand and supply of electricity at peak hours. The report maintained that the difference between firm supply and peak demand is estimated at 5.457 MW) during the financial year 200809 (Energy Bulletin p14).1 per cent. Giving details of projects. According to an official report.529 MW by the year 2009-10 when firm electricity supply will stand at 15.5 per cent and street light 0.3 per cent. The survey said household sector has been the largest consumer of electricity accounting for 44. Khan Khwar (72MW). therefore scheduled loadshedding have started and will remain for the coming years (Energy Bulletin p14). Duber Khwar (130MW) and Kayal Khwar (130MW) are expected to be completed in 2009 Page 7 of 14 . commercial 5.official maintained that electricity demand surged up to 13 per cent during last quarter (Energy Bulletin p14).478 MW to meet 15.2 per cent of total electricity consumption followed by industries 31. Keeping in view the past trend and the future development. otherwise the gap between firm supply and peak demand will remain on the rise (Energy Bulletin p14).7 per cent (Energy Bulletin p14). They said the power generation projects.055 MW against peak demand of 20. Even the revised load forecast has also failed all assessments due to which Authority has left no other option but to start load management. which are due to commission in coming years are of low capacity and will not be able to exceed the surging demand of the electricity. the gap between firm supply and peak hours demand was to shrunk to three digit (440 MW) during 2005-6 and then slip into negative columns in 2006-7 (-441 MW) and further intensify to (-1. The experts say it could only be possible through a mega project of hydropower generation. the sources said Malakand-lll (81MW). They say no power generation project will commission during this fiscal year and the total installed capacity of electricity generation will remain 19. Chairman WAPDA Tariq Hamid at a Press conference early this year warned about the possible energy crisis and stressed the need for ‘quantum jump’ in power generation. Besides this. Mangla Dam raising project have also added 150 MW capacity to the national grid since June 2007. Pehur (18MW) and combined cycle power plant at Faisalabad (450MW) were commissioned during the year 2007. agriculture 14. other government sector 7. Allai Khwar (121MW).584 MW(Energy Bulletin p14).082 MW firm supply and 14. WAPDA has also revised its load forecast to eight per cent per annum as against previous estimates of five per cent on average.642 MW peak demand (Energy Bulletin p14).
In addition of these. efforts are also under way with China National Nuclear Corporation for the construction of a third nuclear power plant with a gross capacity of 325 MW at Chashma. Sources say WAPDA has also planned to install a high efficiency combined cycle power plant at Baloki (450MW). sources said. When contacted.” he disclosed (Energy Bulletin p14). Matiltan (84MW). “We have been negotiating Rs 9 billion loan with a consortium of local banks to upgrade and augment the power transmission system. Wapda makes us believe that water and power are inseparable and that the present energy crisis in the country is because we have failed to build large dams. they added (Energy Bulletin p14). which is expected to be completed by 2010. Moreover. Energy Alternatives in Pakistan Water and Power are no more synonymous.along with Golan Gol (106MW) and Jinnah (96MW). About the system augmentation to bring down line losses. the official said the Authority would spend Rs 3. However. power plant 1 & 2 of 300 MW each at Thar Coal with the assistance of China are also planned for commissioning in 2009-10. New Bong Escape (79MW) and Rajdhani (132MW) are expected by 2009-10 while Taunsa (120MW) is likely to be completed by 2010 (Energy Bulletin p). Page 8 of 14 . Moreover. Wapda and the proponents of big dams use this argument in favour of building Kalabagh and other large dams (Humanyun p14).5 billion on augmentation of distribution lines this fiscal while another Rs 5 billion will be consumed on transmission lines. a WAPDA official admitted that the shortage started to occur in the year 2007 and onward and said the Authority will utilise all options including running of IPPs plant at full capacity to avert any possible crisis (Energy Bulletin p14).
India’s civilian nuclear cooperation agreement with the United States results in the development of its nuclear capability for power generation and economic development. There has been a global trend to shift away from oil because of its rising price expected to reach $100 a barrel by the end of this year depending on the international geopolitical situation.500 MW of electric power. in terms of nuclear power production (Humanyun p14).000 MW (Humanyun p14). Pakistan is a nuclear technologically advanced country with capabilities to produce fuel. and so on. the world average for nuclear energy is 16 per cent and for coal 40 per cent (Humanyun p14). Page 9 of 14 . Despite the lowest cost of hydroelectric power.We need to look at the larger picture and think out of the box.750 MW. France 78 per cent with 59 reactors. On the other hand. Let us first consider these two potential sources of electric power production for Pakistan. nuclear 16 per cent. and coal 0. Today.363 MW. as per the World Bank. or 58 per cent of this. there have been environmental. The remaining power is supplied by the KESC. This leaves the possibility of exploring nuclear. nuclear power plants have average capacities of 600 — 1. Iran and Central Asia. and the country is now looking at the option of importing gas from Qatar. yet falls behind most other countries. ecological and geopolitical concerns over the building of large dams (Humanyun p14). The US obtains 20 per cent of its electric power from nuclear energy with 104 reactors. hydro 16 per cent. Pakistan only produces two per cent of its power through two reactors (Karachi and Chashma at 137 MW and 300 MW respectively). Electricity demand is expected to grow by eight per cent a year during the period 2005 — 2015. The worldwide electricity production. including India. nuclear two per cent. The new agreement will further boost the nuclear power generating capacity of India. coal and other alternative energy sources (Humanyun p14). nuclear and IPPs. The supply of natural gas in Pakistan has been depleting over the years.2 per cent (Humanyun p14).340 MW are under construction and should be completed in the coming years (Humanyun p14). Nuclear energy and coal form the lowest source of power production in Pakistan. oil 16 per cent. Wapda provides about 11. Pakistan’s power production is gas 48 per cent. gas 19 per cent. There is currently loadshedding of up to 700 MW a day because of shortage and poor transmission capabilities. and another six with a capacity of 3. is as follows: coal: 40 per cent. the UK 23 per cent with 31 reactors. requiring an annual installation capacity of about 2000 MW for the next 10 years (Humanyun p14). hydro 33 per cent. It has currently six reactors in operation with a capacity of 3. Japan 24 per cent with 54 reactors. oil seven per cent. Pakistan produces about 19.
In the 1980s. the source of acid rain).Regarding coal power generation. Total installed capacity worldwide is 60. making wind energy very feasible as compared to other sources of power.5 million tons per year. Coal-fired power plants of 500 MW are the norm today and many are currently under construction around the world. UK 35 per cent. South Africa 94 per cent. The largest coal-fired plant in the world today is at Nanticoke. The total coal reserve in Pakistan is about 175 billion tons (Humanyun p14). In Pakistan. India last year alone set up 1. The current coal production is only 3. Wind energy is the fastest growing energy source in the world.00 for fossil fuel) and therefore it is growing very rapidly. technologies are available to minimise all of these. Canada.2 per cent of its power through coal (Humanyun p14). carbon dioxide emission (contributing to global warming) and high moisture content (Humanyun p14). Poland 96 per cent. In addition to the option of using nuclear plants and coal for power production. Denmark is obtaining 15 per cent of its electric power needs from windmills and it is Page 10 of 14 .40 per unit as compared to Rs. Australia 77 per cent. Spain 10.150 MW and India 4. In the US. alternative energy sources are also available.000 MW of wind power.100 MW.000 MW. China will set up plants of over 5.430 MW of wind power plants and is expected to add another 5. today it is only four c/kwh (Rs 2. India 68 per cent. Israel 77 per cent. while Pakistan produces only 0. Ecological issues continue to be addressed for large wind farms (Humanyun p14). The world’s two largest growing economies — China and India — are capitalising on wind capability. the cost of wind energy production was 40 c/kwh. the US produces 51 per cent of its power using coal. However. It grew at an astonishing 43 per cent in the last one year alone. after the recent discoveries in Thar. including wind and solar. Conversion technologies are currently under development to convert coal into environmentally-friendly methanol and hydrogen gas to be used as clean fuel. The Indian government is envisaging a capacity addition of 5. with a capacity of 3900 MW. There is large-scale application of coal for power generation around the world.000 MW by 2012. The world’s largest producers of wind energy today are Germany at 18. Pakistan has the world’s seventh largest reserves of coal.000 MW of wind power by 2012 by extending major financial incentives to the wind energy sector (Humanyun p14). The US is working on a major initiative called future gen to produce “zero emission” power plants of the future (Humanyun p14). which is mostly used for the brick and cement industry. By 2010. China 79 per cent. Japan 28 per cent. 4. such as a high sulphur content (it produces sulphur dioxide. there are plans to build only two 300 MW coal-fired plants at Thar (Humanyun p14).440 MW (equal to Pakistan’s total power output). Coal has typical problems. the US 9.430 MW (at number four). mineral matter content (leading to ash and pollution problems). which is the largest consumer of coal-generated power the power plant at Coal Creek has a capacity of 1.000 MW. Technologies have greatly improved in the last two decades.
expected to grow to 50 per cent by 2012. Japan is the leader in solar PV power plants with over 1. cutting down on the cost of power transmission and distribution networks. ecological and geopolitical issues are settled with a consensus among all four provinces. The best options available today are nuclear and coal. Even though the accepted standard is 1. while an under-construction 520 MW capacity in Ireland will be the world’s largest. followed by Germany (794 MW). The Sindh government has recently announced plans to build a 50 MW wind farm in the vicinity in the coastal region at Gharo (Humanyun p14).000 MW of Page 11 of 14 . Thermal-based solar power plants using reflectors are also in use today. and in desert. such as the ones at Gharo. China has announced that it plans to build a 1000 MW wind farm in Hebi by 2012 (Humanyun p14). The world’s largest PV solar power plants are in Germany and Portugal with a capacity of 10 MW and spread over 62 acres. delivers an average of only 19-56W/m2. Solar plants are generally used in cases where smaller amounts of power are required at remote locations. like other types of solar power options. however. France. wind farms and solar plants in the next 10 years to generate about 20. PV is also the most expensive of all options making it less attractive (Humanyun p14). very clear from the above that Pakistan needs to aggressively pursue ways to increase its power-generating capacity to reduce its energy crisis. costs have halved in the last five years because of better production technology and growing demand. A typical solar power plant today will pay for itself in five to 10 years. an average solar panel (or photovoltaic — PV — panel). the US (365 MW) and India (86 MW). Ireland and Canada are countries which are rapidly expanding their wind energy potential. Britain. where SZABIST set up an experimental research station many years ago. However. Typical solar (PV) power generating stations are in the 300 — 600 KW capacity. These are. It is. Large-scale wind farms today include a 300 MW plant in Oregon-Washington. Solar power (photovoltaic or thermal) is another alternative energy source option that is generally considered feasible for tropical and equatorial countries. Pakistan needs to set up at least a dozen nuclear power plants. followed by wind and solar. Israel announced the building of a 100 MW solar power plant (Humanyun p14). Smaller windmills are also very feasible for remote villages. Hydroelectricity can only be pursued after all environmental. mountainous and coastal regions. they have been successfully used for decades in the United States and Europe. not very popular. therefore. large coal fired plants. In remote farmlands. In 2005.200 MW of installed capacity. In Pakistan. the largest of these in California with a capacity of 350 MW. smaller windmills are now visible.000 W/m2 of peak power at sea level.
electricity. We need to cut back on non-development expenditures by at least one billion dollars a year to invest in energy needs (Humanyun p14). elimination of unemployment and poverty. coal. greater manufacturing and exports. Industrialisation around the world has taken place because of the abundance of reliable and cheap electrical power (infrastructure. wind and solar technology. creation of jobs. Reliable and cheap availability of electric power in Pakistan will lead to largescale investment in industry. It will lead to a prosperous Pakistan. trade surplus and the reduction of deficits. We need to invest at least a billion dollars a year in developing the infrastructure and establishing power plants using nuclear. human resource and government incentives follow). Conclusion Page 12 of 14 .
still the prices of power is increasing. but Pakistan is the country which is heavily affected by it. Therefore Pakistan’s government need to take some steps. Recently it was announced that there is going to be an increase of more than twelve percent in electricity bills from January 2010 and this increase of rates will continue to another 6months. it should build more dams by taking all the provinces in confidence and Pakistan should also try to use its other resources like coal and nuclear energy to decrease this gap between the production and consumption of energy and minimizes its energy crisis. This increase in energy prices result in the increase transportation prices and other general prices. “Energy Crisis in Pakistan. There is constant increase in the fuel prices in Pakistan and with the shortage of Power and continuous loadshedding. <http://ammar360. References Humanyun.com/2009/01/23/energy-crisis-and-pakistan/> Page 13 of 14 .Energy crisis is now a world problem and every country is facing it.” 23 January 2009.
www. <http://www. “Future and alternative sources of energy. <http://ammar360.enerybulletin. “Energy Crisis Feared.” 2 July 2004.net.net/node/883> Humanyun.energybulletin.” 23 January 2009.com/2009/01/23/energy-crisis-and-pakistan/> Page 14 of 14 .
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