Energy Problems and their

Effects
 Outline
• Introduction
• History of energy generation in Pakistan
• Different sectors of energy generation
• Effects of energy crisis
• How to tackle it
• Conclusion
 Introduction
• During the last few years Pakistan is facing
energy crises despite efforts by the successive
government to solve this problem but has not
been resolved so far.
• Energy crisis mean shortage of electricity and
gas.
• Pakistan’s energy shortage is between 3000 MW
to 500 MW depending up on the weather
conditions.
 Introduction
• Pakistan’s energy generation on average is
around 16,000 MW and its requirement is
close to 19,000 MW.
• Our capacity to generate electricity is more
than 20,000 MW but due to one reason or the
other we are not working on our full capacity.
 Introduction
• Reason’s for energy crises are many such as
lack of planning for future, line losses, theft,
circular debt, and lack of conservation of
energy.
• Similarly there is a gap between demand and
supply in gas also.
• The demand is 4,000 MMCFD and supply is
3,000 MMCFD.
 Introduction
• 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.
 Introduction
• 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.
 Introduction
• The PML(N) government had promised that
by 2018 energy crises would be over.
• Such a promise was also made by previous
government but failed to fulfill it.
• The PML(N) government appeared to be more
confident due to CPEC as one of its
component is energy projects which would
generate energy up to 10,000 MW.
 Introduction
• The government focused on producing energy from
various sources including solar, hydro and wind
resources as well as LNG and coal-based power
projects to overcome the ongoing energy crisis in the
country.
• Pakistan had been suffering a multi-dimensional
energy crisis for the past one decade. “Power
shortages coupled with high electricity costs have
had a very negative impact on the economy and on
public welfare”.
 Introduction
• While inflow of new investments was hampered by
the precarious security situation, production from
existing units was seriously affected by electricity
and gas load-shedding.
• As a result, the growth rate slowed down to an
average of 3% between 2006 and 2013.
• The most important thrust of this effort was the
CPEC energy package, which would add 17,000
megawatts to the existing installed capacity of about
20,000MW.
 History of energy generation in Pakistan

• Historically Pakistan was dependent to

generate electricity from hydro projects.
• Ayub Khan’s period is considered to be a
golden period for economic development.
• In 1960 Warsak Dam in Khyber Pakhtunkhwa
was inaugurated.
• Mangla dam was completed in 1966 and
Tarbela dam was completed in 1976.
 History of energy generation in Pakistan

• In Zia ul Haq’s period, the idea of constructing

another dam to be known as Kalabagh dam was
floated.
• The World Bank agreed to finance this huge project
involving billions of rupees over a period of 20 years.
• However from the outset Kalabagh dam became
controversial due to resistance from smaller
provinces of KPK, Sindh and Baluchistan.
• It is technical issue which has been politicized.
 History of energy generation in Pakistan

• In 1990’s during Benazir Bhutto’s period energy

crises increased in the country and IPP (Independent
Power Producers) projects were initiated.
• Through these projects energy could be produced in
a shortest possible time but at the same time it’s
costly compared to hydro projects.
• If the cost of per unit is one rupees in case of Hydro
projects, the cost of IPP was 6 rupee per unit.
 History of energy generation in Pakistan

• Another effort to overcome energy crises was made

during Nawaz Shareef period when nuclear projects
were initiated with Chinese assistance.
• Those projects are known as CHASNUP (Chasma
Nuclear Power Projects).
• Four such projects have been completed and one is in
the pipeline.
• These projects are also costly and its capacity to
generate electricity is very low. The capacity of each
project is 300 MW only.
 History of energy generation in Pakistan

• During previous PPP’s government another

effort was made to overcome this crises and
this time projects were known as Rental Power
Projects (RPP).
• These projects were very expensive and the
cost of it would have increased to 18 rupees.
• These projects couldn’t materialize due to
corruption and court cases.
 Different sectors of energy generation

• PML(N) government was working on different

projects and exploring different options.
• Different sources of energy such as Coal,
Wind, Solar, Hydro, Oil and Gas, Nuclear etc
have been explored.
• There is an improvement over the previous
year's.
 Different sectors of energy generation
• CPEC is one of the greatest opportunity to
overcome this crises.
• Under this project 10,000 MW would be
generated by the end of 2018 and another 7,000
MW would be produced up to 2021.
• The current shortfall can be easily overcome but
while planning for the future it should be
remembered that our energy requirement
increases by 8-10 percent annually.
 Different sectors – Hydel
• Hydel is cheep and its cost is around Rs 2 per
unit, long term and capital intensive projects.
• Its world average is 15% and in Pakistan its
contribution has been more, upto 30%.
• Production from the cheapest and
environment-friendly source – hydel – also fell
to 19.44% from 23.40% in February, 2018.
Different sectors – Hydel
 Different sectors – Hydel
• Pakistan could store only 10% of its annual
river flows against the world average of 40%.
• Per capita water availability had decreased in
Pakistan due to rapid growth in population and
depleting water storage capacity of the
reservoirs because of the natural phenomenon
of sedimentation.
 Different sectors – Hydel
• Key Projects are;
i. Neelum-Jhelum Hydropower project 969MW
ii. Tarbela extension projects 1,410MW
iii. Golen Gol Hydropower Project 108 MW
iv. Diamer Basha dam 4500 MW
v. Mohmand Dam Hydropower Project
vi. Kurram Tangi Dam (stage-I)
vii. Naulong Dam
 Projects completed in 2018
• The Neelum Jhelum , was inaugurated in the
middle April, 2018.
• Golen Gol was inaugurated in January and
• Tarbela 4th Extension Hydropower Project in
February this year.
• These three projects have added 2,487
megawatts of low-cost hydel electricity to the
national grid.
 Construction started in 2018
• Diamer-Bhasha Dam,
• Mohmand Dam, 
• Kurram Tangi Dam (stage-I) and 
• Naulong Dam were ready for construction.
• These dams have total storage capacity of
more than 8 million acre feet (maf) and will
produce about 5,000 megawatts of cheap hydel
electricity. 
 Diamer-Bhasha Dam – Hydel
• The Council of Common Interests –the highest
constitutional body dealing with Centre and
provinces issues, unanimously approved the
Diamer-Basha Dam project in July 2010.
• The total cumulative cost of Diamer-Basha
Dam will be minimum Rs1.4 trillion both for
water reservoir and power generation facilities.
• Will be completed in 9 years.
 Diamer-Bhasha Dam – Hydel
• The project has been divided into two parts to
reduce the size of the project and financing
requirements after World Bank, Asian
Development Bank and China refused to fund
the project.
• Pakistan has been struggling to raise money
from international institutions amid Indian
opposition to the project.
 Diamer-Bhasha Dam – Hydel
• The project will contribute to the alleviation of acute
water shortages in the Indus Basin Irrigation System
caused by progressive siltation of existing reserves.
• After the completion of the dam, the storage
capability of Pakistan will increase from 30 days to
48 days.
• The powerhouse, when completed, is expected to
add 4,500 megawatts of electricity generation
capacity.
 Mohmand Dam – Hydel
• The Mohmand Dam project will have power
generation capacity of 800 megawatts, at a cost
of Rs303 billion.
• These projects will help the country address two
serious issues – water shortage and power
generation. 
• Pakistan has not built any major water reservoir
since Tarbela Dam and Mangla Dam were built
in the 1960s.
 Different sectors – Oil
• As per government’s plans, power production
through furnace oil fell to 8.33% (581.39
GWh) in February 2018 compared to 26.28%
(1,667.53 GWh) in February 2017.
• Along with this, production from the most
expensive source – diesel – dropped next to
zero at 0.01% (0.77 GWh) at Rs14.18 per unit
in February 2018 from 0.09% (5.95 GWh) in
the same month of previous year.
 Different sectors – Coal
• Coal is yet another option we have large
reservoirs of coal and the energy produced
would be relatively cheaper but unfortunately
our coal is not of very high quality.
• Of three coal-based power plants, the
governmet completed only one -- 1,350MW
Sahiwal power plant -- in May 2018 under the
umbrella of the CPEC.
 Sahiwal Coal Power Project
• It is the first energy sector’s initiative under
multibillion dollars CPEC, was built with the cost
of $1.6 billion.
• Construction on the project started in March 2015.
• The first generating unit of the Sahiwal power
plant was inaugurated in May last.
• The second unit was put online in late 2017.
• The project was completed in a record period of
22 months.
 Sahiwal Coal Power Project
• A joint-venture of China’s state-owned
Huaneng Shandong Electricity Limited
(owning 51 percent of stake) and textile firm
Shandong Ruyi Group (holding 49 percent
stake) built the project on a build, operate and
transfer basis.
• The plant’s ownership will be transferred to the
government of Punjab after 30 years of
operation.
 Different sectors – Coal
• February 2018 saw power production from coal
at 15.79% (1,102.03 GWh) of the energy mix at
a tariff of Rs5.81 per unit.
• Coal-based production was standing at a meager
0.07% (4.62 GWh) in February 2017.
• The surge in production became possible after
two coal-fired power projects of cumulative
capacity of over 2,600 megawatts came on line
– one in Punjab and the other in Sindh.
 Different sectors - Wind
• Wind energy has a potential in Sind and
Baluchistan but this potential has not been
properly utilized.
• Pakistan’s big business houses are diversifying
their investments into the renewable energy
source due to the incentives being offered,
including high and guaranteed rate of return in
euro and dollar parity.
 Different sectors - Wind
• The share of wind power in the country’s
energy mix increased 0.46 percentage point to
1.23% in September 2017, which indicates the
country is well on track to achieve the target of
increased production from the renewable
energy source in the long run.
• In 2006, the then government had set the target
of increasing the share of wind energy to 5% in
the total energy mix by 2030.
 Different sectors - Wind
• Nine projects with cumulative generation
capacity of 445MW are in various stages of
construction at present.
• The Government is working on development
of another 10 wind energy projects in the
province (Sindh) having expected cumulative
capacity of 1,200MW, which would be
constructed by 2019-20.
 Different sectors- Gas
• From oil to gas.
• Currently, the government targeted plant
conversions (including conversion of Guddu
and Nandipur to gas) and
• three gas-fired plants in Bhikki, Haveli,
Bahadur Shah and Balloki,
• Bhikki Power Plant capacity is1180 MW
 Different sectors- Gas
• Pakistan succeeded in achieving a record high
power production from environment-friendly
sources – gas and re-gasified liquefied natural
gas (RLNG) – in February 2018 after launching
LNG-based projects and enhancing supply of
imported gas in the country.
• Electricity production from the locally
produced gas and imported LNG increased to
43.17% of total production in February 2018.
 Different sectors- Gas
• The jump in power production from clean
sources became possible primarily due to the
launch of three RLNG-based power projects in
Punjab that had cumulative production capacity
of 3,600 megawatts.
• Breakdown of the data shows Pakistan
produced 19.20% (1,340.07 GWh) of
electricity from RLNG and 23.97% (1,672.87
GWh) from locally produced gas.
 Different sectors- Gas
• However, electricity production from the
imported gas has not proved cheap when
compared to the locally produced gas.
• The tariff for RLNG-based electricity was
almost equal to the cost of power produced
with the help of expensive furnace oil.
• The government is gradually abandoning the
consumption of furnace oil in power plants.
 Different sectors- Gas
• RLNG-based power tariff was estimated at
Rs9.02 per unit, which was almost double the
tariff for electricity produced from local gas at
Rs4.71 per unit.
• The tariff for furnace oil-based electricity was
Rs10.17 per unit, according to Nepra.
Different sectors - Nuclear Energy
• Pakistan generates five percent of its electricity
from four small 300MW Chinese reactors at the
Chashma plant and wants to boost nuclear capacity
to 8,800 MW, or about 20 percent of power
generation capacity, by 2030.
• China is already building two Hualong One
reactors with a capacity of 1,100MW each near the
port city of Karachi, which are expected to become
operational in 2020 and 2021 respectively.
Different sectors - Nuclear Energy
• It would take Pakistan´s nuclear capacity to about
5,000MW when it is finished.
• Pakistan wanted to build at least 3-4 more big nuclear
reactors by 2030.
• Imported oil is the main fuel for power generation in
Pakistan, where one quarter of the population has no
access to electricity.
• China has signed a deal to build a third large nuclear
reactor in Pakistan, which wants to get a fifth of its
electricity from nuclear plants by 2030.
Different sectors - Nuclear Energy
• For Pakistan, after hydropower, nuclear is the
chief and the most sustainable solution to the
country’s energy woes.
• Other alternatives can be mainstreamed into
the country’s overall energy mix as it stabilizes
in the energy domain.
 Different sectors – Solar
• Quaid-e-Azam solar project of 100MW.
• Established by Quaid-e-Azam Solar Power
(Pvt.) Limited (QASPL).
• Which is a state-owned for-profit company
established by the government of Punjab.
• As the first ever utility scale solar power plant.
• The project commenced commercial operation
in 2015. Is in process of privatization.
 Causes of Energy Crises

• Lack of planning: 8-10 percent increase in

demand annually, therefore we have been
facing this curse due to absence of planning in
the past.
• Line losses: Our system of transmission is
very old which require an immediate
replacement, Losses in this regard are almost
20 percent.
 Causes of Energy Crises

• Theft: This is also one of the reason of energy

problem as some are using energy without
paying their dues/bills. Such people are also
misusing it.
• The government, in order to reduce theft, is
resorting to more load shedding where there is
less recovery and in areas where there is higher
recovery, load shedding is relatively of shorter
period.
 Causes of Energy Crises

• Circular Debt: The difference of dues collected and

its cost for the government results in circular debt.
• There is higher cost and low recovery and this low
recovery is due to its misuse, line losses and theft et.
• The government is responsible to pay the difference
between cost and recovery, and this debt is almost 25
percent if you are spending 100 you recover 75, so
this difference would accumulate in circular debt.
 Causes of Energy Crises

• The current government initially paid 500

billion rupees to the IPP’S. Without addressing
the causes, this problem would reemerge and
presently it’s estimated that circular debt has
reached 300 billion rupees.
 Causes of Energy Crises

• Lack of conservation of Energy: As a nation

we are in the habit of misusing this energy
despite the fact that it is in short supply. Such
misuse can be found at the individual level as
well as at the national level. It can be seen on
national days and religiously celebrated days.
 Effects of energy crisis

• The energy crisis has cost the national economy

dearly,
• Loss to GDP in terms of missing energy due to
the demand-supply gap
• 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.
 Effects of energy crisis

• The crisis has played havoc with our industrial

activities.
• In industrial cities such as Karachi, Lahore,
Gujranwala and Faisalabad, thousands of
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.
 Effects of energy crisis

• 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.
• 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.
 Effects of energy crisis

• 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.
 How to tackle it

• 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.
 Conclusion

• It is concluded that Pakistan has suffered due to energy

crisis in the past and continue to suffer at the moment.
• This was not only a challenge for the pervious
government but also for the current one.
• The PML(N) government has premised to overcome it
by 2018 which is also election year.
• Let us hope that PTI Government overcome it with
better management.