With only 2.5-4 percent GDP growth, Pakistan would
need at least 40,000MW of electricity. According to the Energy Expert Group of
Pakistan Business Council, at present, the country is getting 43.7 percent of
its electricity using gas, 29 percent by burning furnace oil. This brings
thermal production (the most expensive) to 72.7 percent of total electricity
generation in country. Of the remaining 27.3 percent, 15 percent is hydel power
while 10.4 percent is coal power. Continued heavy reliance on furnace oil and
gas will see the import bill for meeting our energy requirements go up — from
USD 12 billion in 2007-08 to USD 62 billion — based on the crude oil price of
USD 100 per barrel.
However, according to the Expert Group, projections made by Goldman Sachs,
Morgan Stanley and others have indicated that the price of crude oil will be
closer to USD 200 per barrel by the year 2020 which will increase the import
bill for Pakistan to USD 124 billion under the ‘business as usual’ scenario.
Experts believe that Pakistan has a greater potential for producing electricity
from its indigenous cheaper sources like water and coal. “Pakistan has the
potential to produce more than 50,000MW hydel power,” says Tahir Dhindsa, an
energy expert affiliated with Sustainable Development Policy Institute (SDPI),
Islamabad. “Presently, the total installed capacity of hydel power is less than
6500MW. It is the cheapest form of electricity and costs less than Rs1.5 per
unit while the power generated by burning furnace oil costs around Rs13 per
unit and the burning gas costs Rs5.5 per unit.
“Coal is also a very cheap and readily available source of energy in Pakistan,”
he adds. “We need to shift our [energy] requirements on water and coal from
thermal sources. It is only because of the high rates of furnace oil and the
unavailability of gas that Pakistan hardly runs the total capacity of 8,295MW
of Independent Private Power Producers (IPPs).”
Natural resources are depleting while the demand continues to rise. “The
existing demand for Natural Gas is 4.5 billion cubic feet per day (BCFD) and,
if no change is brought in the policies, will go up to 10 BCFD by the year
2020,” says Dhindsa.
“The supply, on the other hand, is expected to drop down to 2.17 BCFD from the
current 3.9 during the same time period.”
He suggests that Pakistan should start working on importing gas from Iran and
Central Asian states as soon as possible if it means to meet energy demands.
Integrated Energy Plan 2009-2022, completed by the ministry of finance,
strongly calls for moving towards indigenous power sources. According to this
plan, Pakistan needs to induct 18,000MW hydel power at any cost to the national
grid by 2022. Additionally, it needs to induct a minimum of 10,000MW power
generation on local coal, during the same period of time, to half the import
bill of hydrocarbons in the power sector. The Medium Term Development Framework
(MTDF) 2005-10 and Vision 2030 also call for similar actions.
Things may look perfect in the book as far as capacity and policies to overcome
power crisis are concerned. In Pakistan’s latest power policy (2002), it is
clearly mentioned that the country would start facing electricity shortage by
2005. The same is described in so many papers and reports of planning
commissions and Wapda but nothing has been done to overcome the crisis.
“Hydro Potential of Pakistan”, a document produced by Wapda in 2011, mentions
Pakistan having a hydropower potential of over 100,000MW with identified sites
of 59,000MW. According to the same document, present estimates suggest that the
185 billion tonnes of coal which are equivalent to around 617 billion barrels
of crude oil, if estimated at USD50 per barrel, is an asset worth USD30
trillion. These coal reserves are enough to provide over 20,000MW of
electricity for a period of 40 years.
Another document by the same ministry says that these coal reserves would be
sufficient for generating 100,000MW of electricity for 30 years as energy
contents of these resources are more than those of Saudi Arabia and Iran’s oil
resources put together.
An official of Energy section of Planning Commission of Pakistan says that coal
is highly underutilized: “The average share of coal in world energy mix is 40
percent whereas in our country it is around 7 percent (local coal). We are
hoping to increase its share in our national energy mix by at least 20 percent
by 2030.”
Ironically, no private local or foreign firm has showed interest in developing
an integrated local coal based project. “I hope in the next few years, many
coal based power generation projects will start at least in Sindh,” he says.
“Dr Samar Mand Mubarak has already started a pilot project of 100MW electricity
generation from Thar Coal. The cost per unit of electricity produced from Thar
coal has been calculated at Rs3.59. In the next phase, 500-1,000MW power plants
will be installed to generate power through coal gasification. We should be
able to install our first 1,000MW power plant in Thar over the next three
years.
“Coal is the answer to our future energy needs. At present, India is producing
51 percent of its electricity from coal while China is producing 67 percent.
Pakistan can take a cue from its neighbours in this regard.”
The situation is more or less the same in the hydropower sector. Pakistan,
though it hopes to induct at least 18,000MW hydel power in the next 10 years,
is rapidly depleting its water storage capacity due to sedimentation.
“Currently, we can only store up to 13 percent of the annual flow of our
rivers,” the official says. “The storage is fast depleting due to sedimentation
which has not only reduced the power generation capacity of our dams but also
proved detrimental to the country’s agriculture. For example, over the last 30
years, the storage capacity of Tarbela has been reduced by 27 percent due to
silting. The studies under way include Diamer Basha (4,500MW), Bunji (7,100MW)
and Kohala (1,100MW) amongst others. Although Hydel power is the cheapest, it
is the most controversial because the construction of dams involves a lot of
investment and also displacement of natives. Last week, the residents of Swat
filed a petition against the Daral Khawr Hydropower Project which is a
run-of-the-river dam with an estimated capacity of 36MW and can easily fulfil
the electricity demands of the whole district.
“The situation is not too good with big projects such as Bhasha-Diamir,
Neelam-Jhelum and Bunji dams and none of them are likely to be completed in the
given time frame,” he says.
Small hydro projects are also very important as Pakistan has a great potential
in this sector. At present, some 300 small and mini hydropower plants, installed
by the private and public sector in the northern hilly areas, are supplying
electricity to these areas.
So far, we have failed to make full use of the potential in small dams as well.
In June 2011, President Asif Zardari inaugurated a project for the construction
of 12 small dams in different parts of the country by 2013. Work on not a
single dam has commenced as of now. “It is true that we have huge electricity
generation capacity in hydro and coal sectors but no big project has been
completed in the last three decades,” says Syed Tanzim Naqvi, ex-member Power,
Wapda.
“Electricity generation projects, both hydel and coal, take many years to
complete, so the government instead of waiting for recommendations from
national and international energy experts should focus on setting up new
projects. Otherwise we will hit the worst electricity crisis five years down
the line.”
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