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Pressing energy requirement in Pakistan – A key visit to China

Last week, Prime Minister Imran Khan paid an important visit to China at a time when Pakistan is facing multi-facet challenges on economic front. Pakistan’s energy challenge still poses risks to the country’s economic growth and expansion. The country still faces power shortages due to rapid growth in demand for electricity. The country is largely dependent on oil imports. Owing to unstable prices and supply of oil and gas across the globe, the visiting Prime Minister needs to discuss and seek Chinese cooperation and expertise to develop the country’s renewable energy resources in a big way.

Time has come to shift towards country’s renewable energy resources such as water, wind and sunlight and reduce the dependency on conventional thermal based generation facility. Pakistan meets around 50 percent of its energy need with the indigenous gas production and 29 percent with domestic and imported oil and 11 percent with hydro-electricity. The country’s annual energy requirements are expected to more than double to 177 million tons of oil equivalent by the year 2020.The country has an installed refining capacity of 12.82 million tons a year from its five refineries. Pakistan’s consumption of petroleum products currently stands at about 21 million tons, of which about 85 percent was met through imports. The country meets only 15 percent of the consumption from indigenous crude production, while 30 percent crude and 55 percent refined products are imported. With a refining capacity of 13 million tons, Pakistan meets only half of its annual requirements. The country’s demand for petrol is likely to increase in the coming years. The demand for petrol will cross 8m tons by 2019-20 from the current 4.73m tons, according to one estimate.

If the new PTI government raises prices of petroleum products in a move to pass on the full impact of international oil prices to domestic consumers, it is bound to spark inflation and affect industry in the country. The inflation goes up due to increase in petroleum products prices, electricity and gas prices. The government will not be able to afford subsidizing petroleum products for longer. It has no choice but to continue taxing petroleum, as it faces rising fiscal deficit, which will have to be made up for by printing money through the State Bank, itself the single biggest cause of soaring inflation in the country. Hike in fuel prices drives up inflation in the country by increasing transportation costs. Inflation pushes more people below poverty line with the onset of high oil prices and continues to increase food prices.

Existing projects

China has already invested in solar and wind projects in Pakistan. China-aided energy projects from renewable sources as water, solar, hydel and wind would be started in all the provinces, including FATA and Azad Kashmir. The completion of energy projects initiated with China’s cooperation would produce thousands of mega-watts of additional electricity. Sindh has already allotted 680 acres of land to Sachal Energy (Pvt) Ltd for a period of 30 years to establish 49.5MW wind energy project at Jhimpir, Sindh. The cost of the project is $133 million. M/S Sachal Energy (Pvt) Limited is establishing a 49.5MW Wind Energy project at Jhimpir, district Thatta. It has awarded the EPC contract to M/s Hyro China Xiebi, a Chinese Company engaged in the wind power development. Under the deal, the company would supply 49.5MW power to the national grid for a period of 30 years up to 2044 and will provide 136 Gega watt Hours to the national grid. The project will contribute international commitments of the government to reduce the environmental degradation of the region. The project is included as one of top priority project for Pakistan China Economic Corridor. The Industrial and Commercial Bank of China (ICBC) is financing the project.

 

In Punjab, the first phase of Bahawalpur 100MW solar power project has been completed, while the second phase of 900MW solar project has been launched. Dawood 50MW and Sachal 50MW wind farms have also been launched.

At least 100 wind power turbines may be installed in the remote coastal areas of Sindh and Balochistan provinces. Sindh has a great potential in the field of wind energy and up to now 50,000MW has been identified in the Jhimpir Gharo Wind Corridor.

More than 40 companies are actively engaged in the province to develop 3000MW power through wind.

In April 2011, the state-owned China Three Gorges Project Corporation (CTGPC) signed an agreement for the construction of a 720MW hydropower project at Karot bordering Punjab and Azad Kashmir at a cost of $1.2 billion. Karot Dam site is located on Kahuta-Kotli Road, nearly 68 Km from Rawalpindi in Punjab province. The project has been proposed on the River Jhelum, 74 Km upstream of Mangla Dam. The CTGPC is the operator of Three Gorges dam on Yangtze River, which is one of the biggest hydropower-complex projects in the world.

Benefits of renewable resources

Hydroelectric power is a renewable form of energy, as clean electricity can be generated constantly so long as sufficient water is available. Pakistan has a hydropower potential of more than 40,000MW, while it has managed to tap only 6,500MW.

Most of the wind resources are located either along the sea coast lines or on the mountains. Windmill is the latest technology of producing low cost electricity. Windmills can be used to pump water for irrigation and grinding grain in agricultural fields. Windmills prove cheaper source of energy than coal and thermal based sources of electricity. Wind power system is currently in operation in China.

Solar thermal power plants produce electricity in much the same way as conventional power station. The difference is that they obtain their energy input by concentrating solar radiation and converting it to high temperature steam or gas to drive a turbine or engine. Solar power plants can simultaneously produce electricity, provide cooling by means of an absorption chiller, generate industrial processing steam and produce drinking water with a sea water desalination plant. From economic point of view, the solar thermal power plants will reduce the dependency on fossil fuels in remote areas. The operation and maintenance cost is nominal, compared to conventional power plants. Moreover, these plants will also avoid the risk of future electricity cost escalation. They are not only emissions-free in nature, but are ideally suited to reduce green house gases and other pollutants.

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