THE ENERGY CRISIS

Dr M. Asif is the author of Energy Crisis in Pakistan: Origins, Challenges and Sustainable Solutions.

Emerging in 2006-07, Pakistan’s energy crisis still haunts the country — be it lengthy
load-shedding, the growing demand-supply gap, energy insecurity, increasing reliance
on imports and circular debt. In recent years, it has become more complicated both in
dimension and intensity.
Has there been any effort to determine what went wrong? Apparently not. The energy
crisis did not take us by surprise; from a surplus of power in 2001 to a deficiency in
2006, the period was long enough for us to have taken action. The crisis has been
cultivated by years of negligence and wrongdoing. Senior Wapda officials were raising
the alarm as early as 2003, only to be snubbed by key decision-makers. The Nandipur
power project is a classic example, speaking volumes for how successive regimes since
2007, when the project that was set to become operational, have jeopardised it.
Has there been any effort to evaluate the impact of the energy crisis on Pakistan’s GDP
and macro-economy? It does not seem so. The energy crisis has cost the national
economy dearly, not only the loss to GDP in terms of missing energy due to the
demand-supply gap but also the loss to industrial and commercial activities due to
load-shedding and flight of capital from the country. Safe estimates suggest that it has
cost the national economy over $100 billion.
Has there been any account produced to determine the consequent deindustrialisation
and flight of capital? Again, no. The crisis has played havoc with our industrial activities.
In industrial cities such as Karachi, Lahore, Gujranwala and Faisalabad, thousands of

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factories have shut down or are operating at the bare minimum level, which has
resulted in huge flight of capital as investments have shifted elsewhere. What a shame
that it was not just more advanced countries like Canada, Malaysia and UAE that saw a
major influx of Pakistani investors, but countries such as Bangladesh and Sri Lanka too.
Ten years on, are we any closer to solving the issue? Has there been any effort to analyse
the impact on micro-level socio-economics? No. The crisis has heavily dented the
socioeconomic fabric of society, reportedly resulting in the loss of thousands of jobs
mainly due to skewed industrial and commercial activities. With those affected often
being the sole breadwinners of their households, the situation has led to dire
socioeconomic implications for millions of people. In the absence of any social welfare
support, being pushed towards crime and other forms of moral corruption has been the
unfortunate, inevitable outcome for many.

Have lessons been learned? No. With vision and commitment, challenges can be turned
into opportunities. And opportunities have definitely arisen, but only for certain
individuals rather than the masses or the country at large. Many who have been
observing closely argue that the energy crisis is another example of how crises are
crafted to serve vested interests.
The entire energy sector, in terms of administration and functions, needed to be
overhauled; malpractices and wrongdoings that caused the crisis to be corrected; and
projects and deals transparently handled. But the state of affairs shows that little has
changed; in fact, strong efforts are needed to ensure transparency and merit. Moreover,
reckless decision-making must be avoided. It is unfortunate that powerful lobbies still
appear to be dictating key energy decisions.
Has any goal-oriented policy and road map been developed to drive Pakistan towards a
sustainable energy future? Efforts here too have been sparse. The diverse and
complicated nature of the crisis demanded a paradigm shift in the modus operandi: a
holistic and coherent energy policy, a goal-oriented approach and an implementation
road map. But the situation is without direction. Various ministries, departments and
cells still work haphazardly without any meaningful coordination. No value-engineering
behind the projects is emerging. Important issues — an imbalance in the energy fuel mix,
addressing our energy security by lowering the reliance on imports, and the lack of
utilisation of cheap and indigenous hydropower and renewable resources — do not
appear to be challenges that cause concern to the authorities.
But the energy crisis can be resolved. Pakistan has the potential, capacity and
opportunity to overcome this challenge. Our existing power plants, currently
underperforming for a wide range of administrative and technical reasons, need to run
optimally. Vast, untapped indigenous resources including hydropower, renewables and
fossil fuels can help with energy security and affordability.
Energy conservation, the cornerstone of energy strategies across the world, has to be
embedded in the national energy fabric, not just in letter but also in spirit. Our human

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resources are competent enough to rise to the occasion. What is really missing is the
combination of vision, strategy and commitment on the part of policymakers.

DEATH OF RENEWABLE ENERGY IN PAKISTAN

Raashid Wali Janjua, January 29, 2018

There is no gainsaying the fact that the death of the renewable energy is the death of our
national energy dream.

The government’s recent policy changes on renewable energy development have dealt a
grievous blow to a sector that had promised a new dawn of clean and cheap power for
an energy starved Pakistan. While the rest of the world gallops ahead embracing wind
and solar energy, our energy mandarins have thought otherwise. While the advanced
industrial nations like Germany and Denmark produce 42 percent and 14 percent of
their electricity by wind alone, we are stuck at less than 1 percent. 27 percent of
Germany’s electric power is being produced from renewables and they intend to
increase that percentage to 80 percent by 2050.

In USA, the contribution of wind power to national grid is 82183 megawatts which is
approximately 6 percent of total electricity production of the country. China has the
world’s largest installed capacity of hydel, wind and solar power that accounts for 24
percent of its electricity generation. It produces 63 percent of the total world production
of photovoltaic cells.

Even in a Pakistan’s per capita electricity consumption of 540 kwh is one of the lowest
in the world, a fact that highlights the gulf that separates the rest of the world from
Pakistan. The national energy mix ratio that should be an ideal balance between the
renewable and the fossil fuel based power generation sources is an accurate reflection
of a country’s energy scene. An energy mix skewed in favour of fossil fuels for an oil and
gas importing country prognosticates energy crisis showcasing high cost of electricity
for end consumers and high import bill. Pakistan’s energy mix that features 64 percent
thermal, 30 percent hydel, 3 percent nuclear and less for wind, solar, and coal cries out
for a review. With the present share of wind and solar power of 640 and 400 MW in
national grid which is less than 1 percent of national electricity generation, one would
have expected that the government would go all-out to enhance that percentage closer
to global averages of 15-20 percent. No such luck here in Pakistan where the LNG and
coal lobbies have elbowed out the wind and solar to the margins through mercurial
policies and delaying tactics inimical to the interests of the potential investors.

At a time when the government should be offering attractive terms to investors interested
in solar and wind projects, it is doing exactly the opposite.

Initially in 2012, the government showed some interest in wind projects considering the
mouth watering potential of the 43000MW of wind power in Gharo-Jhimpir Wind

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Corridor. With wind risk granted to the investors in the first three wind projects i.e.
Jhimpir, and Foundation Wind I and II the stage was set for an expansion of the wind
farms in the entire corridor. After initial cost plus based projects with wind risk
coverage, the government graduated towards upfront tariff withdrawing the wind risk.
With a Return on Investment (ROI) of 17 percent, the projects were still lucrative for
investors and one expected that the government would persist with these policies for
some time till the share of wind in national energy mix exceeded at least 3-5 percent. No
such luck in Pakistan. Not only did the Ministry of Energy lean upon NEPRA to do away
with the upfront tariff it created ambiguity by indicating the reduction of the concession
periods from 25 to 15 years and doing away of the investor friendly ‘take or pay’
provision. By indicating a reference tariff of Rs 6.7/Kwh initially in 2017 and then
creating further confusion about the competitive bidding, a large number of willing
investors were actively discouraged from charting a course in the terra incognita of
constant policy shifts. Several investors who had acquired ‘Letters of Intent’ (LOI) for
the wind projects based upon cost plus tariffs, concession periods of 25 years and ‘Take
or Pay’ provision eying ROIs of 15-17 percent were forced to abandon their projects
having invested heavily in project feasibility and development.

Why is the government moving the goal posts for the wind and solar projects
continually? It is a question that begs a frank answer considering the undue concessions
being offered to the coal and the LNG power project developers. Why would the
government not encourage clean and cheap wind and solar power generation despite
being beset with crippling energy shortages.

Interestingly, the ‘good Samaritan’ reasons adduced in support of the government’s

chameleon like policy shifts are reduction in the power generation costs for end
consumers and elimination of burdensome capacity charges. Amazingly, the capacity
charges are being reduced for renewables whereas the fuel guzzling old plants being run
by public sector are being munificently accommodated.

There is a need to declare a national energy emergency with immediate

announcement of a national energy mix policy having a minimum of 20
percent of wind and solar share with a clear road map to achieve the targets
within stipulated timelines. NEPRA and AEDB should also be allowed to work
independently and freely

The present opacity in the policies considering wind and solar energy are sounding the
death knell for the nascent industry, which promised cheap and environmentally clean
energy without a dependence on imported fuel. In 2006, the government had
announced an increase in the share of wind energy in the national energy mix to five
percent by 2030. With the present resort to competitive bidding and curtailed
concession periods that objective appears unachievable now. The Alternative Energy
Board (AEDB), a one stop window for wind, solar, and biogas power projects, has been
ordered to be merged into PPIB, another indication of the government’s lack of

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seriousness in encouraging the renewable energy. AEDB being the sole representing
agency of the federal government that was established in May 2003 with the main
objective to facilitate, promote and encourage the development of renewable projects in
the country has been put into a limbo, effectively stifling the development of wind and
solar projects.

The reliance yet again on imported fossil fuels like LNG that are being touted as the
panacea to our energy woes is highly risky considering the volatile nature of the oil
prices in international market with whom the LNG price is pegged. At a time when the
government should be offering attractive terms to investors interested in solar and wind
projects, it is doing exactly the opposite. Instead of improving the power evacuation grid
and minimising the transmission losses and power thefts, the government is imposing
further burden on the grid by allowing inefficient public sector power plants to consume
a portion of grid at high cost to national exchequer and public. Considering the inability
of National Transmission and Distribution Company to evacuate the generated power a
‘national grid overhaul emergency’ would have been declared in any other country.
While the electricity evacuation problems elsewhere trouble the government, it does not
show the alacrity to maximise grid evacuation advantages where conditions permit.

A classic example is the unutilised grid capacity of 50 MW wind farms in Jhimpir and
Gharo. Due to technology compulsions of 30 percent efficiency wind turbines only
30MW of the power is generated out of an installed capacity of 50MW. The remaining 20
MW could be ideally generated by integrating solar energy. The government is not
encouraging even this easily doable innovation that could utilise 20 percent of its
unutilised grid capacity on wind farms.

There is a need to declare a national energy emergency with immediate announcement

of a national energy mix policy having a minimum of 20 percent of wind and solar share
with a clear road map to achieve the targets within stipulated timelines. NEPRA and
AEDB should also be allowed to work independently and freely. Along with an active
encouragement of the renewable energy sector, with the wind and solar in the lead role,
an urgent overhaul of the national power evacuation and distribution grid is de rigueur.
There is no gainsaying the fact that the death of the renewable energy is the death of our
national energy dream.

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 ENERGY: WILL 2018 BE A COSTLY END TO DARKNESS?
Khaleeq Kiani, January 01, 2018
Pakistan will begin 2018 with expensive energy prices and breakeven supplies.
While the year is estimated to conclude with a bit of electricity surplus after 13
years, gas shortages are unlikely to end by December 2018.
The decade of darkness is likely to come to an end during the year, though at a cost. The
consumer is set to pay a remarkably higher price for the inability of the policy makers to
reform any of the electricity, gas and oil sectors. With induction of fresh gas and
electricity supplies, the major constraint of industrial and business sectors would stand
removed.
While the input prices would walk a downward curve because of expansion in global
renewable energy sector and the United States entering Liquefied Natural Gas (LNG)
market with a bang in 2018; the PML-N government would enter the new year, and an
election year on top, with a decision for an almost 25-30pc increase in average
consumer-end electricity tariff.

While the consumer is set to pay a remarkably higher price for the inability of the policy
makers to reform the energy sector; with induction of fresh supplies, a major industrial
and business sector constraint will stand removed
In fact, the electricity regulator — National Electric Power Regulatory Authority (Nepra)
—only recently gave in to government demands, after five years of resistance, to allow
building higher system losses and lower recoveries in the tariff, besides a quantum jump
in Net Hydel Profit payments to provinces — from around Rs1.10 per unit to almost Rs5
per unit (kwh).
And the pattern will go on
with average gas rates, oil
prices and electricity costs.
This emanates from the
fact that there are no
indications that a decline
in transmission and
distribution losses in the
electricity and gas sector
is on the horizon to take
root in 12 months from
now. Also, public sector
entities have been
struggling to sustain a
higher recovery rate or inculcate efficiency patterns in the system.

Study Notes by Aamir Mahar 6

 Renewable producer
tariffs have been falling
drastically over the
past few years and are
forecast to maintain
that trend. Having said
that, the renewable
market, particularly
small hydro, wind and
solar resources, in
Pakistan is already
hitting a road block.
For small hydro projects, the government has announced not to guarantee their power
procurement, practically making them irrelevant going forward. For solar and wind, the
government would hold competitive bidding with a cap of 400MW and 600MW
respectively for the next year.
This is despite the fact that large power projects on imported fuels, particularly LNG and
coal, would continue to be operated on ‘must-run’ basis to ensure their economic
viability at the cost of foreign exchange.
That should in a sense be a critical point that will shift individual consumers towards
self-reliance through alternate sources, and drive them away from the national grid as
the price of storage equipment (batteries and cells) starts falling drastically in the
international market.
With nominal increases forecast for global oil prices in near future, Qatar appears to be
loosening its grip over the LNG market with major output originating from Australia and
the US put together. That would also shift producer prices from traditional crude to
significantly lower levels based on Henry-Hub dimensions.
The government would need to keep pace with changing LNG prices after having
entered into long term supply contracts with Qatar, Gunvor and ENI at a higher base,
owing to security of supply, and move towards creating a basket price to take advantage
of the upcoming Australian and US supply influx.
On top of that, the price differential between
domestically produced gas at about Rs600 per unit
and imported price of LNG at Rs1,100-1,200 per unit
would continue to cost heavily on the competitiveness
of the manufacturing sector, not only with
international competitors but also among those
stationed in different provinces.

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At the close of 2017, the PML-N government is estimated to have added around
6,000MW to the generation capacity since it came to power in 2013 and was able to
deliver about 19,000MW to consumers in peak summer of 2017.
About 4,000MW of electricity generation is estimated will be added during 2018 with
completion of three LNG projects of 1,200-1,300MW each (total 3,600MW) in Punjab
besides the 1,400MW Tarbela fourth extension, 969MW Neelum-Jhelum Hydropower
project and completion of Port Qasim Coal based project of 1,320MW among the major
sources. The LNG projects at Balloki, Bhikki and Haveli Bahadurshah are currently
running at half capacity.
On the other hand, the new year begins with completion of the second LNG processing
terminal that puts total gas imports at 1.2 billion cubic feet per day (BCFD) against a
decade long gap of about 2BCFD. In the oil sector, there is no major capacity addition
lined up for 2018 except for laying of a pipeline for transportation of petroleum
products to reduce reliance on road network.
Because of higher LNG imports, the dependence on furnace oil would come down
significantly, from about 9.5 million tonnes per annum to somewhere between 6 -7
million tonnes during the year, down by almost 30pc.
That would mean furnace oil based generation, historically above 30pc of average
power supply, would be partially replaced by relatively cheaper and efficient LNG based
power generation, particularly with the commercial operations of three public sector
run LNG projects in Punjab (having better fuel efficiency) to be followed by some
smaller independent power producers.
With induction of almost 4,000MW during 2018, the power sector is poised to touch
generation capacity of around 25,000MW to breakeven demand, without any spinning
reserve to adjust for emergency breakdown, from less than 15,000MW about five years
ago.
At the end of the year, the country would be entering an era of capacity trap unless the
economy enters the much desired 7-8pc growth rate per annum.

PAKISTAN’S ENERGY STRATEGY

Prof. Atta-ur-Rahman, October 29, 2018

The world energy scenario is in a flux. The oil prices have seen major changes during the
last two decades, forcing economies around the world to adopt to these up and down
movements. However there are significant developments taking place in solar cell
technologies, and the prices of solar based installations have dropped to about half of
what they were about 3 years ago. Moreoverthere have been exciting developments in
alternative sources of energy which promise to change the way our world will be
generating energy 30 years from now. These include the development of more efficient
wind turbines, use of biofuels, the generation of hydrogen as a fuel from water by

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catalytic cleavage of the hydrogen-oxygen bonds and the possibility of nuclear fusion
finally becoming possible after decades of frustrating research.

Pakistan is blessed withthe 5th largest river system in the world, and the hydropower
potential of Pakistan is estimated to be 46,000 MW, although we have been able to
exploit only about 14% of this potential. About 4500 MW of power can be generated by
the installation of low cost hydel plants on the riverheads in Punjab. These can produce
electricity at very low rates of US $ 0.02 / kWh. The energy sector presents a sad state of
massive and rampant corruption by those in power for the last 30 years. In 1984 about
59.3% of Pakistan’s electricity was produced by hydroelectric power plants. This should
have been expanded as it is the cheapest source of electricity. However corrupt leaders
with vested interests came in the way and decided to import expensive oil-based plants.
By 1990, the share of electricity generated from hydroelectric power dropped to 45%,
and the continued corruption subsequently has further reduced it so that it now stands
at only about 29.3% of the total energy mix. In contrast oil has grown to 37.8% and gas
stands at about 30%.

The massive construction of dams and reservoirs was deferred repeatedly and
expensive oil based power plants, often obsolete, were imported, thereby bringing the
industrial sector to its knees because of the high cost of power generation. Inspite of
having one of the largest coal reserves in the world, we ignored the use of coal for
electricity production, although in India, 55% of the energy requirements are met by
coal, while in China this stands at 67%.We were nudged in this wrong direction by
certain world financial agencies including the World Bank and the Asian Development
Bank, that made loans readily available for oil based power plants but discouraged
governments from investing in coal as a source of energy.
Under a highly biased power policy that was steeped in corruption, a major crime
against the nation was committed in 1994 when independent power producers (IPPs)
were allowed to set up operations in Pakistan. The policy was promoted by the World
Bank,. Low efficiency and obsolete single cycle generation plants were established by
IPPs as they were guaranteed costs plus 15% profit. It was shocking that the IPPs were
guaranteed a return on costs, however high they may be. The Rental Power Plants
present an even more shameful story of corruption.

The World Bank played a very negative role in leading Pakistan in a wrong direction in
the energy generation sector and many have accused this organization of being a
criminal partner with corrupt governments, eventually bringing Pakistan to its knees
economically. In an article by Fahd Ali and Fatima Beg it is stated, and I quote:
“Declaring itself one of the Government’s main advisors in power policy matters
((World Bank. May 11, 2001. Implementation Completion Report – On a Loan in the
Amount of US $150 million to the Islamic Republic of Pakistan for a Private Sector
Energy Development Project (staff assessment report)), the World Bank is also partly
responsible for the IPP debacle. For example, it should have strongly advised the
Government to lower the offered tariff as soon as it became clear that too many IPPs
were being accepted. The World Bank also admits to some of these errors (World bank

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2011, above full reference). It criticizes its own preparation of PSEDP 1 and 2and states
that the long-term credit fund (LTFC) and its future were not given adequate thought. It
goes on to say that the Bank should have ensured the NDFC was able to manage this
fund (Dawn. July 9, 2001. NDFC insolvent, says WB report). The Bank’s Implementation
Completion Report (2001) states: “Insufficient attention was devoted during appraisal
of PSEDP 2 to the affordability of private power in Pakistan”.
(https://www.sdpi.org/publications/files/A106-A.pdf). A judicial investigation into this
national disaster is warranted, and if the World Bank is found to be guilty in this debacle,
then the organization should be banned from ever operating in Pakistan again.

It is notable that hydel power has a relatively lowproduction cost which varies between
Rs. 1.18 to Rs. 4.00 per unit. The cost of electricity production from coal is also quite low,
about Rs.6 to Rs. 7 per unit. However with thermal power plants, the cost can vary and it
can be as high as Rs. 25 per unit and since these have been running well below their
capacity, the cost can often exceeds Rs. 50 per unit. The agreements with the IPPs forces
the government to pay a certain amount irrespective of production! WAPDA was
officially forbidden from building thermal power plants so that our leaders could get
huge kick-backs by opening the doors to foreign imports of obsolete and inefficient
power plants — a criminal act that has doomed the nation for decades to come.

Pakistan has coal reserves that are estimated to be about 186 billion tons. The proven
reserves are about 579 million tons, which should last for 180 years. The Thar coal
fields can produce about 50,000 MW of electricity and 100 million barrels of oil each
year for the next 500 years! However instead of properly using this huge wealth, our
corrupt leaders, obtained huge kick-backs and piled up billions of dollars abroad by
opting for expensive imported power plants based on oil. Today coal contributes only
0.1% for electricity production in Pakistan. There are also large unused gas reserves in
Pakistan. The Tal Block near Kohathas estimated gas reserves that are comparable to
those in Sui which need to be exploited immediately. There is also huge scope for
renewable sources of energy — wind, solar, biomass, algae — that need to be exploited.
When I was the Federal Minister of Science and Technology in 2001, I had funded a
project for the wind mapping of Pakistan. The data collected at different heights across
the country over a two year period by the Pakistan Meteorological Department revealed
an extraordinary fact: there was a potential of up to 50,000 Megawatts of electricity
generation from wind power alone in the area in the coastal areas of Sind and
Baluchistan, particularly in the region between KatiBandar, Gharo and Hyderabad. We
should establish plants to make wind turbines within the country, as is being done in
India and China, and manufacture our own wind mills ain order to utilize this huge
potential. Nuclear power plants, are also an excellent option, though their installation
has been opposed by certain foreign agents and vested interests in Pakistan.

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PAKISTAN CAN PRODUCE RENEWABLE ENERGY. SO WHY
DO WE CONTINUE TO IMPORT PRICEY FOSSIL FUELS?
Babar Raza, September 13, 2018
Pakistan’s power sector is in an eternal state of crisis.
From chronic load shedding to electricity theft, heavy transmission and distribution
losses to massive non-payment of built-up dues, the sector is prone to every problem
imaginable despite attempts by various governments over the years to fix the system
and provide some relief to the populace. The issues, however, are severer than the
consistent, yet occasional, hours spent at the mercy of the urban heat without the relief
of fans or air conditioners.

Pakistan's electricity woes adversely affect the competitiveness of the country's

industry, lower the standard of living by creating an artificially low demand due to
excessive prices and cost the national exchequer billions in the form of subsidies and
import bills.

High costs: Most problems arise simply due to an unreasonably high cost of electricity
for the average consumer. Fix that, and most issues will dissipate automatically in due
course. According to the most recent State of the Industry report issued by the National
Electric Power Regulatory Authority (Nepra), the billing price of electricity throughout
Pakistan averages to around Rs13/KWh consumed. At US¢10.7/KWh, it fares on the
lower end of the global electricity prices spectrum, significantly lower than that of
developed economies such as the United States (at US¢21/KWh) or Germany (at
US¢33/KWh), though above that of regional economies such as India (at US¢8/KWh)
and China (at US¢9/KWh).

Related: Pakistan's electricity generation has increased over time. So why do we still
not have uninterrupted supply? But adjust that against income of an average individual
in Pakistan, and the real cost balloons. Assuming a high gross national income per capita
of $1,580 and the global average of just over 3,000 KWh consumed per individual each
year, approximately 20 per cent of a Pakistani individual’s income would be spent on
paying electricity bills. The same percentage is 1.1pc for the US, 2.3pc for Germany, 13pc
for India, and 3.1pc for China. It’s no wonder that Pakistan ranks amongst the countries
with the lowest per capita consumption of electricity. Those with enough means can
enjoy an air conditioner in every room while many wouldn’t dare leave the television on
for longer than absolutely necessary.

Self-perpetuating cycle: The high cost of a core necessity in today’s environment

prompts those living on an edge to seek cost-efficient alternatives even if they are illegal,
such as kundas. These losses prompt the distribution companies to resort to systemic
load shedding while the government is left to pick the tab via subsidies to the power
distributors. Lack of maintenance and upgrade of the national transmission
infrastructure leads to further losses and bottlenecks throughout. The high expenses

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passed on to the consumer, coupled with unsteady supply, raise cost of doing business
in Pakistan and is partially responsible for the country losing export competitiveness.
Some may call for the government to increase its contributions to the power sector to
aid the people, but that doesn't shift or reduce the burden — it merely realigns it from
energy bills to tax bills. Others may call for privatisation of the energy supply chain, and
although private markets may do wonders for an ailing and inefficient sector, it
wouldn’t be enough. While a privately-run power distributor may be able to invest in
and maintain an efficient transmission infrastructure, it cannot magically force its
customers to pay their dues on time. K-Electric is a prime example, for its distribution
losses run far higher than those of state-owned electricity distribution companies. And if
the regulator eases the burden on the power distributors by allowing for passing of the
heavy losses and non-collection to the paying customer via increased energy tariffs, a
whole new swathe of people may be priced out of the market, exacerbating the issue in
the first place.

What's the remedy? The only long-term, sustainable solution to all these chronic
problems is to reduce the cost of generation. Unfortunately, precious little has been
done in recent years to that affect. Large hydropower plants operated by the Water and
Power Development Authority are the country’s cheapest source of power and imported
fossil fuel-based thermal generation companies some of its most expensive. And yet
recent major additions in power generation have been regasified liquefied natural
gas-powered stations that add to the country’s import bill and produce power that is
subject to international commodity price fluctuations and currency devaluation, as well
as the decades-late introduction of coal-fired plants. And though Thar coal may be a
small blessing — if one ignores the effect on an already deteriorating environment —
some of the coal-fired plants being built run on imported fuel.

Hardly on the right path: Nepra's forecasts of Pakistan’s energy generation mix by
2025 is a small, but unrealistic, step towards the right direction. Although the share of
renewable wind and solar (which can offer non-fuel based clean energy at attractive
rates once the initial payback period runs its course) will still be abysmally low, that of
hydropower is expected to increase to 32pc from 26pc in 2017, with no further addition
to non-coal based thermal generation beyond 2018. But that includes large additions in
capacity from uncertain projects such as the Diamer-Bhasha dam, which has so far been
restricted to crowdfunding due to judicial activism rather than an attempt at
professional planning and project financing. If they don’t materialise on time and
demand continues to march ahead, the government will then be forced to resort to the
relatively quick-to-set-up thermal generation. In short, nothing would change seven
years down the line. Unless our public planners start working towards better ten to
15-year goals that address core issues in a sustainable way, we would be stuck
implementing short-term measures that simply delay the problems than fix them.

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PAKISTAN'S FIRST WASTE-TO-ENERGY PLANT GETS LICENCE
Dawn Newspaper. Published on July 16, 2018.

In line with efforts to promote renewable and domestic resources of energy, the
National Electric Power Regulatory Authority (Nepra) has approved the grant of power
generation licence to Lahore Xingzhong Renewable Energy Company Limited.
The company will set up Pakistan’s first waste-to-energy plant with 40-megawatt
production capacity in Lakhodair, Lahore district. It will deploy a state-of-the-art
incineration-type generation facility and the most suitable waste-to-energy technology.
“The project will reduce the city’s municipal solid waste by 2,000 tons a day to
generate electricity and is seen as a silver bullet to address the municipality’s waste
issue and meet energy needs,” said a statement issued on Monday.
In this regard, Nepra has already announced an upfront tariff of 10.007 US cents per
kilowatt-hour for waste-to-energy projects based on an operational period of 25 years
with overall capacity cap of 250MW. The share of each province and the federal
territory has been kept at 50MW each. “A successful implementation of the project will
pave the way for other such initiatives to solve pressing waste disposal problems and
address challenges of limited space for landfills and gas emissions, resulting in cleaner
cities and a healthy life,” the statement said. A 24-month construction period has been
fixed for such power plants. For protection from environmental hazards, power
producers will obtain necessary approval from relevant government agencies.
In Pakistan, more than 20 million tons of municipal solid waste is generated with
annual growth of 2.4%. All major cities – Islamabad, Lahore, Karachi, Peshawar, Quetta,
etc – are facing enormous challenges in tackling the problem of urban waste.
Thousands of people die every year due to waste-related diseases. Considering the
environmental issues, most of the countries in the region have already announced the
tariff for municipal waste power plants and they are getting dual benefits ie disposing
of the garbage and generation of electricity.

ENERGY SECTOR — GETTING HOUSE IN ORDER

Dr M Asif, Published: November 1, 2018
With the new government in office well into its third month, the energy sector remains
awaiting meaningful measures for its woes to be addressed. Although it’s too short a
time to imagine things turning around, at least future directions are expected to be
made clear pretty soon.

The over a decade-long energy crisis is still very much alive. Despite the last
government’s acclaimed installed capacity of 28,000MW, electricity load-shedding has
not vanished. Gas load-shedding is also there with warning shots being called for it to
get intense in winter. A substantial proportion of energy supplies are lost in
transmission & distribution. Above all, the ever escalating circular debt has been
reported to have reached Rs1,300 billion. The energy crisis is actually far deeper than
these apparent dimensions. Besides these issues, acute dependence on imports,

Study Notes by Aamir Mahar 13

detrimental energy mix and dearth of management capacity are areas of further
concern. As a matter of fact the latter set of problems, which is hardly under the radar,
underpin the state of affairs. The initiatives taken to address the crisis over the last
decade or so have been segmented, shortsighted and often counter-productive,
consequently the problem still stands tall. Any sustainable and meaningful solution to
the crisis requires a visionary, comprehensive and cohesive approach strategically
targeting all problem areas.

Pakistan’s energy crisis can be attributed to bad governance more than anything else.
It is simply a result of decades of compromised policy and decision making, and vested
interests. As Einstein famously said: ‘We can’t solve problems by using the same kind
of thinking we used when we created them’, good governance would be imperative for
addressing the energy crisis. Colossal losses in the energy sector are a wee example of
the bad governance in the energy sector. The present government has announced a
crackdown on electricity theft, which is a commendable step. The transmission and
distribution system has been one of the weakest links in the whole energy equation,
thanks to years of negligence. The system is insufficient, weak and has tremendous
leaks. The system is reported to be incapable of distributing more than 19,500MW of
electricity as against the installed capacity of 28,000MW. The fragility of the system is
evident from a number of national level transmission failures — including the one in
2015 that plunged over 80% of the country into darkness for hours — as well as
instances of over 200 feeder trips in a single day in Lahore. The losses in the
transmission and distribution system — predominantly thefts and non-payment of
bills — are reported by Nepra to be 18% though actual figures are understood to be
considerably greater as the trend of overbilling to adjust higher losses is quite common.
The recent case of late Habib Jalib’s daughter is a wee example here. Losses are also
rife in the gas sector, generally termed as unaccounted for gas (UFG,). Over the last
decade UFG has almost doubled, reaching to a level of over 15%, thanks to rampant
theft. UFG, typically in a range of 2-3% in the developed countries, should be below 5%
for a country like Pakistan.

The control of losses requires improvement both on the technical and governance end.
Technical solutions need to be deployed to curtail thefts. The Minister for Energy has
discussed plans for using special cables that would resist illegal connections. Prepaid
electricity metering is another effective solution that has been successfully tried across
the world, both in the developed and developing countries, to control losses and
increase revenues. Besides the technical measures, widespread corruption in the
utilities needs to be sorted out. Mostly, thefts are patronised by the utilities staff or are
given a blind eye in case of influential perpetrators. The theft facilitators in utilities,
that include low ranked staff such as meter readers and linesmen as well as top
officials, need to be tamed to find a permanent solution.

Let’s not forget crack down on electricity theft is not a new idea; such moves have been
announced in the past well but only to quickly erode away without any tangible results.
It’s all summed up by a last year’s news report that the State Minister for Water and

Study Notes by Aamir Mahar 14

Power came to attend an executive meeting of Multan Electric Power Company
(MEPCO) in the company of a person who was prime suspect in a Rs600 million power
theft case being probed by the National Accountability Bureau (NAB). The present
crackdown on theft should not be momentary as has been the case in history, it should
aim to address the issue for good with clear key performance indicators. There should
also be proportionate focus on all nine DISCOS as per their losses bearing in mind that
three of them have the figures over 30%. It is also pragmatic to revisit the
Center-Provincial stakeholder-ship on issue of losses.

Over the years the energy sector has seen tons of initiatives. Everything that exists in
the concerned dictionary — ie policy reforms, road maps, organisational
restructurings, working groups, task committees and bailout packages — have been
tried only not to deliver. Nothing has worked simply because there was no will. Let’s
hope the new government is sincere in its promises. Intention alone however cannot
deliver unless it is backed by sound strategy and commitment. Improvement in
governance is thus imperative for the success and sustainability of any remedial
measures in the energy sector. Things will not improve without getting the house in
order.

INEFFICIENCIES IN POWER SECTOR COST PAKISTAN $18B

Shahbaz Rana, Published: December 13, 2018
Pakistan’s economy sustained $18 billion losses due to inefficiencies of the power
sector, finds a new report of the World Bank and urges the policymakers to avoid
increasing electricity tariffs as a solution to the sector’s fiscal problems.
“Reforms must go beyond liberalising energy prices to address several aspects of the
power sector distortions,” stated the report titled “In the Dark: How Much Do Power
Sector Distortions Cost South Asia”. The World Bank launched the report on
Wednesday at its local country office and recommended prioritising gas allocation for
efficient power generation and adopting tariff mechanisms that encourage
performance as solutions to the problem.

The findings that the power tariff increase would not address Pakistan’s fiscal woes
would strengthen the Pakistan Tehreek-e-Insaf’s (PTI) power sector policy. Against the
International Monetary Fund’s (IMF) demand to fully pass on the increase in the
electricity prices to the end consumers, the government has decided to adopt a
three-pronged strategy. Besides increasing the tariffs, it has also launched a crackdown
against theft and given targets to the power distribution companies to improve their
recoveries of the bills. The report argues that reforms that focus solely on liberalising
energy prices would lead to an excessively high cost of electricity because of
inefficiencies in the system, negatively impacting the poor and vulnerable.
Interestingly, the IMF, World Bank and Asian Development Bank (ADB) have been
pursuing the policy of increasing tariffs to end energy sector’s woes.

Study Notes by Aamir Mahar 15

On the long-term basis, the increase in tariffs alone would not address the problems
but in the short-term it can solve the fiscal problems, said Rikard Liden, the lead
energy specialist of the World Bank. He said it was important to focus on revenue side
but it was equally important to look at the generation side to address the sector’s
problems.

The report stated that for the benefit of consumers, energy sector reforms should focus
on rationalising consumer prices for electricity and gas to reflect supply costs and
social assistance to help vulnerable populations cope with increased energy prices.
Increased access to reliable power must be made a priority, it added.
The report noted that the cost of inefficiencies in the power sector to Pakistan’s
economy was $18 billion or 6.5% of gross domestic product (GDP) three years ago.
Although the supply side problems are less than they were three years ago, market
distortions still remained underpinning high losses even today, said Fan Zhang, senior
economist and author of the report.

The World Bank report stated that the power sector reforms could save Pakistan’s
economy by $8.4 billion in business losses and could increase total household incomes
by at least $4.5 billion a year. In manufacturing and services combined, total losses in
annual output attributable to power shortages amounted to $8.4 billion in Pakistan in
fiscal year 2015. In Pakistan, the impact of lack of reliable access to electricity on
households and firms is the largest source costing roughly $12.9 billion a year, it
added.

A government official, present at the launching ceremony, questioned the

Washington-based lender’s claim that demand for electricity will increase 64% from
2018-2025. He cited the study of the National Electric Power Regulatory Authority
(Nepra) that has projected 34% increase in demand during this period.
Up to 50 million people still do not have access to grid electricity and frequent
load-shedding damages businesses and health and living standards of consumers,
according to the report. The report also contests the government’s claim that in
Pakistan 99% of the population has access to the grid electricity. The census data and
the number of connections reported by utilities suggest that the access to grid
electricity was only about 74% in 2016, it added.

Pakistan can boost economic growth and job creation by overcoming inefficiencies in
its power sector,” says World Bank Country Director for Pakistan Illango Patchamuthu.
Reforms that address these distortions can make better use of existing facilities. These
need to focus on eliminating waste, promoting the shift towards cleaner energy and
attracting private investments, he added.

Almost a fifth of electricity generated is lost through poor infrastructure, faulty

metering and theft. Load-shedding is caused by high cost, losses and subsidies, which
compromise investments and the ability to procure fuel.

Study Notes by Aamir Mahar 16

Power sector reform should be a top priority, as few other reforms could yield
economic gains of a similar magnitude so quickly, based on findings from this report,
says Fan Zhang. In India and Pakistan, hefty losses of electricity in distribution, along
with poor recovery of overdue electricity bills, have given rise to alarming levels of
debt in the sector and prompted repeated government bailouts.

Pakistan has a two-tier gas market. Imported LNG is broadly charged at the full cost to
consumers, but domestic gas was priced at roughly 36% of the international
benchmark in fiscal 2016.

PAKISTAN, RUSSIA SIGN $10BN ENERGY DEAL

Pakistan will receive 500mn to 1bn cubic feet of gas on a daily basis once the
project is completed. Pakistan and Russia have formally signed a Memorandum of
Understanding (MoU) in Moscow for the construction of an offshore gas pipeline and the
supply of gas to Pakistan.

Reportedly, after signing of MoU, Pakistan will receive 500 million to 1 billion cubic feet
of gas on a daily basis once the project is completed and Russia’s Public Joint Stock
Company Gazprom will work with Pakistan’s state-owned Inter State Gas Systems (ISGS)
together on the $10 billion project which is aimed at fulfilling Pakistan’s gas needs.

Russian energy giant Gazprom will conduct a feasibility study of the project and after
conducting the feasibility study, the final cost of the gas supply project will be assessed
by Gazprom while the project will be constructed by Russia on a build, own, operate and
transfer basis.

Sources at the petroleum division informed that it is expected that the pipeline will be
completed in three to four years starting from March 2019.

They added that this gas pipeline deal between the two countries will serve
China Pakistan Economic Corridor (CPEC), which is now in its industrialization phase
and is in need of gas for its Special Economic Zones (SEZs).

It was also learnt from sources that after the construction of the gas pipeline, Russia will
initially supply 500 million to 1.5 billion cubic feet per day to Pakistan while in future,
Russia will also be able to supply gas to India via Pakistan through land or sea routes.
They added that Russia will also sell Turkmenistan’s and Iran’s gas to Pakistan and India
via Iran at cheap rates in comparison to the price of Liquefied Natural Gas (LNG).

It is relevant to mention that former federal cabinet under the chairmanship of former
prime minister Shahid Khaqqan Abbasi had already given the go-ahead to formally sign
an agreement with Russia for the supply of gas and construction of an offshore gas
pipeline.

Study Notes by Aamir Mahar 17

Similarly, Pakistan’s federal cabinet had also allowed Gazprom to conduct a feasibility
study at its own cost and risk and Russia had already shown willingness to finance the
feasibility study of the project and nominated Gazprom to implement the project.

Likewise, Pakistan and Russia had already reached an understanding on signing the
offshore gas pipeline deal during former prime minister Shahid Khaqan Abbasi’s visit to
Sochi, Russia. And, so far, the two sides remained poised to ink a memorandum of
understanding (MoU) for the offshore pipeline

After the signing of the MoU between the two countries, Russia, which controls and
manages huge gas reserves in energy-rich Iran, and Turkmenistan, will provide gas
to Pakistan via Iran and Russian Gazprom will construct the gas pipeline inside Iran
and Pakistan. They said though Iran has no objection with the Pak-Russia gas deal,
however, Pakistanwill have to revive Gwadar-Nawabshah gas pipeline project to get
Russian gas via Iran and for ensuring energy security of the country, said sources.

At present, Russia has also been a prominent gas exporter to the European Union (EU)
countries and Turkey despite US sanctions as the European bloc continued to make
imports to meet its energy needs.

However, due to the Crimea stand-off, Moscow is, to some extent, under the pressure
and fears that it may lose energy consumers in Europe. Considering Pakistan and India
as alternate markets, Russia is now making efforts to capture these markets since Russia
has shown readiness to export gas by laying an offshore pipeline through the Gwadar
Port to Pakistan and India.

FROM ONE POWER POLICY TO ANOTHER

Ameer Hamza, Published: May 9, 2018
Twenty-four years ago, in March 1994, Pakistan’s first formal power policy was
introduced. With 40% of the population having access to electricity in 1994, the
installed capacity of Pakistan stood at 10,800MW and the country faced a maximum
shortage of 2,000MW depending on weather conditions. Since 60% of this installed
capacity was based on hydel power generation, load-shedding during the summer was
relatively in check due to availability of water in the rivers.

The power policy “conservatively” estimated an 8% annual increase in electricity

demand meaning that a total of 64,000MW would be needed by the year 2018. To date
the installed capacity is not even half of this conservatively estimated number,
showing a stunted economic growth. As per International Energy Agency’s World
Energy Statistics of 2017 Pakistan’s per capita energy consumption is 488kWh against
a world average of 3,052kWh/per capita (roughly one-sixth of the world average).

Study Notes by Aamir Mahar 18

It is baffling how a country gifted with an abundance of natural resources has failed to
alleviate this crippling energy crisis despite the passage of about three decades. Why
have several democratic governments and a dictatorship since this first power policy
failed to deliver the masses from this predicament? Myopia is a condition
characterised by close objects looking clear but distant ones seeming blurred
(commonly known as short-sightedness).

Myopic policy making has done more damage to Pakistan’s energy sector than any
other attributable factor. The aforementioned first power policy of Pakistan
introduced by the then incumbent government of the Pakistan Peoples Party dealt
such a blow to the energy sector that it is reeling from its effects. In a bid to encourage
foreign investment in Build-Own-Operate mode, the policy dished out extremely
lucrative incentives to investors, including but not limited to an upfront tariff of US
cents 6.5/kWh, GoP sovereign guarantees for payment and 18% internal rate of return.
Investors could use any imported fuel of their liking and this was a pass-through cost
and subject to escalation.

Further, this entire process was not at all competitive in nature and any investor with
any technology or proposed fuel who fell within this tariff range was allowed to
become an independent power producer (IPP). Some 3,000MW were added to the
national grid due to this power policy. However, the fallout of this power policy
became evident when petroleum prices skyrocketed in the international market, rupee
depreciated because of political uncertainties and the government ended up paying
heavy capacity payments to the IPPs for electricity that was not even being consumed.

Wapda found itself entangled in a plethora of litigations once it tried to coerce the IPPs
into accepting downward revised tariffs. Learning from the West, it was then decided
to unbundle the power sector into corporate entities serving specific purposes;
generation, transmission and distribution. The next power policy initiated this process
which has failed to achieve the essence of the scheme, that was to reduce inefficiencies
and losses, improve accountability and promote sustainable growth. Even though
distribution companies or discos & generation companies or gencos have been carved
out of Wapda as corporate entities; corruption, red tape and irregularities are rampant.
Attempts at privatising these companies have been futile due to stiff resistance by the
unions compounded with a lack of will on the part of the senior management of these
organisations. Learning from the multitude of power policies since 1994, the power
policy of 2013 is a very comprehensive policy which encompassed more than just ways
to attract investment. For the first time transmission, distribution, governance and
conservation strategies have been a part of a power policy.

However, without proper implementation in letter and in spirit the policy would be
nothing but the musings of an ambitious mind. Further, the power policy of 2015 has
tried to coax interest of investors in the hydel potential of Pakistan which largely
remains untapped.

Study Notes by Aamir Mahar 19

Owing to the politically-motivated policies, the energy mix of the country has flipped to
70% being contributed by thermal and only 30% of electricity being generated from
hydel. This has increased the country’s petroleum import manifold and has exposed
the country to severe petroleum market volatility. An extreme example of this
shortsighted policy-making has been the callous use of indigenous natural gas as CNG
to power the transport industry. In a desperate attempt to provide any relief to the
hard-pressed masses, the last dictatorial regime significantly depleted the precious
natural resource by promoting CNG as an alternative fuel. Now there are around 2.5
million CNG fitted cars on the road but little or no CNG for them.

It is about time that populist policies might be dropped in favour of sustainable ones.
There is a desperate need to exploit the indigenous resources such as coal (Pakistan
has 7th biggest coal reserves in the world) and hydel (45,000MW potential) for meeting
the shortfall in base-load demand and renewable resources (solar & wind) need to be
utilised for meeting peaking electric load demand. Furthermore, there is a dire need to
invest in the human resource development of the energy sector. Competence in energy
management and policymaking needs to be improved to promote the formulation of
sustainable policies in the future. Unless concrete and earnest steps are taken to
address the energy crisis issue in the long run, remedial measures by governments
would be synonymous to administering low potency pain killers to a cancer patient.

UNDERSTANDING GLOBAL ENERGY CRISIS & RENEWABLE

RESOURCES (Asad Hussain)
In Pakistan the energy crisis is the concern that global demands on limited natural
resources that are used to stimulate industrial society are diminishing as demand grows.
These natural resources have a limited supply. Although they occur naturally, it can take
hundreds of thousands of years to replenish stores. Governments and stakeholders are
working to make the use of renewable resources as priority and to reduce the
irresponsible use of natural resources through greater conservation.

Pakistan has been confronted with severe and looming energy crisis since its inception,
as far as a nation, what we can contribute globally to address this emerging issue? Most
people do not feel connected to their reality unless the price of gas in the pump goes up
or there are lines at the gas station. The energy crisis is something that continues and
worsens, despite many efforts. The reason is that there is no broad understanding of the
causes and complex solutions of the energy crisis that will allow an effort to solve it.

As "real" the energy crisis is in the world, not only in Pakistan. Some will always say that
it is based on faulty science and politics; the other will argue its discoveries on
undesirable scientific and political interests. The best way to summarize the reality of
the energy crisis is that it cannot have increasing demands for limited resources without
finally running out of resources. It's just common sense. What is really at stake in the
discussion of the reality of the energy crisis is the perception of responsibility for the
future. There is no real energy crisis if you are not worried about life after your time on

Study Notes by Aamir Mahar 20

Earth. There is a real energy crisis if you care about the future that future generations
will inherit.

There are many causes of the energy crisis and when there is some cause; solution is
also running behind. It would be easy to point a finger at a practice or industry and
blame the entire energy crisis on its door, but it would be a very naive and unrealistic
interpretation of the cause of the crisis. The energy crisis is the result of many different
tensions in our natural resources, not just one. There is pressure on fossil fuels such as
oil, gas and coal because of excessive consumption, which in turn can put pressure on
our water and oxygen resources by causing pollution.

Another cause of the crisis has been the steady increase in the global population and its
fuel and product needs. Regardless of the type of foods or products you choose to use,
from fair trade and organic to those made from petroleum products in a mill, none of
them are manufactured or transported without expense important for our energy
resources.

The aging infrastructure of power generation equipment is yet another potential reason
for energy shortages. Most energy companies continue to use obsolete equipment that
limits energy production. It is the responsibility of the departments to continue to
update the infrastructure and establish a high level of performance.

Renewable resources are still not used in most countries. Most of the energy comes from
non-renewable sources such as coal. Though, it's always the best option to produce
energy but if we do not think seriously about renewable energy, the problem of the
energy crisis cannot be solved. Renewable energy sources can reduce our dependence
on fossil fuels and also help reduce greenhouse gas emissions.

In some countries, including Pakistan there is a significant delay in the commissioning of

new plants that can bridge the gap between demand and energy supply. The result is
that old plants are under great stress to meet the daily demand for energy. When the
supply does not match the demand, load-shedding and failure occurs.

In most parts of the world, including Pakistan, people do not realize the importance of
energy conservation. It is limited to books, the internet, newspaper ads, lip service and
seminars. Unless you think seriously, things will not change soon. Simple things like
turning off fans and lights when not in use, using maximum daylight, walking instead of
driving short distances, using CFL instead of traditional bulbs. 'Read here about 151
ways to save energy'. Frequent travel and outages are the result of a poor distribution
system. Serious accidents such as gusty winds and natural disasters - the volcanic
eruptions, floods and earthquakes like 2008 earthquake in Pakistan can also lead to
interruptions in energy supply. The huge gap between supply and demand for energy
can drive up the price of essential items that can lead to inflation.

Inter-country wars can also hinder the supply of energy, especially if it occurs in Middle

Study Notes by Aamir Mahar 21

Eastern countries such as Saudi Arabia, Iraq, Iran, Kuwait, United Arab Emirates or
Qatar. This occurred during the 1990 Gulf War, when the price of oil reached its peak,
causing global shortages and creating a major problem for energy consumers. Tax
increases, strikes, military coup, political events, hot and harsh summers or cold winters
can also cause a sudden increase in energy demand and can stifle offer. A labor strike in
an oil company can certainly cause an energy crisis and all these causes extend a hard
blow to energy supplies.

Now this is our national liability to find out the possible solutions to the energy crisis.
Today there are many possible solutions, but they have not been widely adopted in
developed as well as underdeveloped underdeveloped countries like Pakistan. The best
solution is to reduce the world's dependence on non-renewable resources and improve
overall conservation efforts. Much of the industrial era was created using fossil fuels, but
technology is also known that uses other types of renewable energy, such as steam,
solar and wind. The main concern is not so much that we run out of gas or oil, but the
use of coal will continue to pollute the atmosphere and destroy other natural resources
in the process of coal extraction. It must be replaced as a source of energy. This is not
easy because many of the big industries use coal, not gas or oil, as the main source of
energy for manufacturing.

By replacing traditional bulbs with compact fluorescent and LED bulbs are effective
response to energy crisis. They use less watts of electricity and last longer. If millions of
people around the world use LED and compact fluorescent lamps for residential and
commercial purposes, the demand for energy can decrease and an energy crisis can be
avoided exterminated. There are number of new technologies that make lighting
controls much more attractive and save a lot of energy and money in the long term.
Pre-set lighting controls, slide lighting, touch attenuators and integrated lighting
controls are just some of the lighting controls that can help save energy and reduce
lighting costs.

Energy simulation software can be used by large companies to redesign the construction
unit and reduce the current energy cost of the company. Engineers, architects and
designers could use this design to build an energy efficient building and reduce the
carbon footprint. The energy audit is a process that helps you identify the areas where
your home or office is losing energy and the steps you can take to improve energy
efficiency. An energy audit conducted by professionals can help reduce energy loss and
can also be beneficial in saving money and redressing energy crisis.

Developed and developing countries should adopt a common position on climate change.
They should focus on reducing greenhouse gas emissions through an effective
cross-border mechanism. With the current population growth and excessive
consumption of resources, the consequences of global warming and climate change
cannot be excluded. Developed and developing countries should focus on reducing
emissions in order to reduce their emission levels to half of current levels by 2050.

Study Notes by Aamir Mahar 22

There are many global initiatives to address the energy crisis. This took the form of
greater regulation and restrictions on carbon emissions, the promotion of greener
construction and manufacturing projects, financing for hybrid technology research and
more sustainable technologies, among others. Locally, more communities are seeing
more trash and recognizing that the way the community uses its local resources is also
important. More and more community gardens, parks and farmers markets are
emerging not only as a means to introduce more sustainable elements into the
population, but also as an important part of educating the public about the importance
of resources.

POWER PRODUCERS PLAN $200MLN INVESTMENT IN

RENEWABLE ENERGY PROJECTS
Javed Mirza, December 15, 2018
At least four new companies have planned more than $200 million worth of investment
to cumulatively set up 154 megawatts of renewable energy projects in Sindh and
Khyber Pakhtunkhwa. The investors sought generation licences from the National
Electric Power Regulatory Authority, a document showed. Sino Well (Private) Limited
planned to set up a 50 megawatts of wind power plant in the wind corridor of Jhimpir in
Sindh with an estimated investment of $85.4 million. The proposed project is expected
to achieve commercial operation by June 2020. Shafi Energy (Private) Limited planned
to set up a 50MW wind power plant in Thatta, Sindh with an estimated investment of
$75.07 million. The proposed project is expected to achieve commercial operation by
June 2021. Javed Solar Park (Private) Limited also intended to set up a 49.5MW solar
power plant in Dera Ismail Khan in Khyber Pakhtunkhwa with an estimated investment
of $49.27 million. The proposed project is expected to achieve commercial operation by
December 2019. Similarly, Grid Edge (Private) Limited sought licence to set up a two
megawatt of solar power facility in Port Qasim with an estimated investment of
Rs168.12 million, while the company also intended to develop a 2.67MW solar
generation plant in Lahore with an investment of Rs250 million. Demand for electricity
continues to outpace growth rate of the economy. Power shortfall at times crosses
6,000MW. The shortfall in supply could be the major cause of a stunted growth in the
industrial sector in the country. The industry, having capacity of self- generation on gas,
has a suspended supply of gas for two to three days a week during winters. Major
electricity sources at present are thermal and hydro generation, meeting approximately
97 percent of the country's annual electricity demand. The primary thermal generation
fuels are furnace oil and gas. While gas is produced domestically, its demand has
outstripped supply by a considerable amount. Oil imports are exerting a significant
burden on national exchequer and the increasing import bill continues to weigh down
foreign exchange reserves. Securing alternative fuels and the technical management
should be strengthened to solve problems and wind power can play a very important
role in overcoming the growing energy crisis. Power sector’s inefficiencies cost the

Study Notes by Aamir Mahar 23

Pakistan’s economy $17.7 billion (6.5 percent of GDP) during the fiscal year of 2014/15,
a latest World Bank’s report said, underscoring need to focus on reforms, eliminating
waste, promoting the shift towards cleaner energy and attracting private investments.

TIMELINE OF PAKISTAN'S ENERGY CRISIS

1952: The first oil field in Pakistan was discovered in the province of Balochistan
near a Sui gas field. During the same time period, Sui gas field, which remains the
biggest natural gas field in Pakistan, was discovered.
1955: Commercial drilling and exploring of Sui gas fields was started. Sui gas field
contributes substantially to fulfil Pakistan’s fuel requirements and have a daily
production of approximately 550 MMscf. Pakistan Petroleum Limited (PPL)
discovered gas reserves at Uch gas field.
1964: The Toot Oilfields, located in the Potwar region of Punjab were found.
During Ayub Khan’s regime Pakistan Petroleum and Pakistan Oilfields explored
and drilled the first well. Toot Oilfields have an approximate capacity to produce
60 million barrels of oil.
1967: The commercial production from Toot Oilfields started in 1967.
1976: Dhodak gas field was discovered in the province of Punjab.
1981: Union Texas Pakistan discovered an oil field in lower Sindh.
1983: Dakni gas field, located about 135 Kms in the south-west of Islamabad, was
discovered in 1983.
1984: Tando Adam oil field, located in Hyderabad, was drilled and completed.
1986: The year witnessed the peak in oil production from Toot Oilfields which
was 2,400 barrels per day. Moreover, Chak Naurang field located 90 kms away
from Islamabad was discovered in the June of 1986.
1989: Dakni gas field started commercial production in December 1989.
1990: Qadirpur gas field was discovered in the province of Sindh. It remains the
third largest gas field in Pakistan
1994: Rajjan oil field, located in Gujjar Khan, was discovered.
1998-1999: The oil fields owned by Union Texas Pakistan were producing more
oil than the Potwar wells.
2000: Balochistan Liberation Army allegedly bombed one of the minor pipelines
transmitting gas from Sui gas fields.
2004: Chanda oil fields located in Khyber Pakhtunkhwa started oil production.
2005: International Sovereign Energy, a Canadian company, signed an MoU with
Oil and Gas Development Company Limited. The memorandum entailed further
development of Toot Oil Fields. Pakistan was hit by one of its most devastating
earthquakes which resulted in a vast damage to the infrastructural capital
responsible for transmitting/transferring fuel. In the December of 2005, Karachi
electric Supply Company, one of the largest vertically integrated power supply
company in Pakistan was privatised.
2006: Mela oil fields were discovered in the area of Kohat located in the province
of Khyber Pakhtunkhwa.
2007: Pakistan faced one of its biggest power failures after Bhutto’s assassination
in which production fell by 6,000 MW.

Study Notes by Aamir Mahar 24

 2008: The demand and supply gap pertaining to electricity in Pakistan increased
by 15 per cent.The major load shedding crisis also commenced in the same year
with power outages extending up to 16 hours a day in many cities of the
country.
2009: NASHPA oil fields were discovered in Karak district of Kyber Pakhtunkhwa.
In the same year, Karachi faced one of its most crucial power breakdowns on June
17 in which the entire city was without power for 21 hours and more.Moreover,
the country faced a power shortfall of 4,500 MW in the same year with the
domestic demand rising up to 11,000 MW. However only 6,500 MW of generated
power was catering to the entire demand.
2010: Sheikhan gas field, which is located in Kohat, Kyber Pakhtunkhwa, was
discovered. Moreover, the torrential rainfall in the year resulted in floods which
caused much damage to the existing infrastructure transmitting/transferring
energy and fuel. Towards the end of the year, country’s first rental power plant
(RPP), with the capacity of 232 MW was inaugurated in Karachi.
2011: The year started with the shut down of Uch power plant producing 585MW
of electricity, as one of the pipelines providing fuel was blown up in the district of
Jaffarabad. Pakistan faced one of its most crucial gas crises, with the shortfall
rising up to 1.8 billion cubic feet (bcf). The year also experienced the worst CNG
load shedding resulting in losses and problems for the consumers. However OGRA
increased the gas tariff by 14 per cent in the beginning of the year which was one
of the biggest tariff hikes in the history of Pakistan. Moreover, the energy shortfall
reached up to 2,700 MW.

Study Notes by Aamir Mahar

Study Notes by Aamir Mahar 25