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Short, medium and long term solutions for energy problems

Dealing with the current difficult situation of energy supply-demand gap and for uniformity in the management system this scribe has some suggestions and solutions in the major sectors which are mean for support power sector growth and development in the country, these solutions are:

Natural gas
  1. Increase the tariff for slabs consuming gas greater than 3.55 million cubic feet per month, in order to discourage the excessive and misuse of gas
  2. Promote the use of solar water heaters and solar geysers
  3. In the power sector, energy conservation and good practices will have to manage demand side issues.

The industry should be prioritized for the availability of gas. In case of cement industry, the use of waste to energy should be promoted further in order to spare the gas for other manufacturing industries. The gas relieved from cement industry and inefficient thermal power plants should be allocated to fertilizer. Hence the order of priority in allocating gas is as follows:

  1. Industry
  2. Power (Efficient thermal Power Plants)
  3. Agriculture
  4. Domestic (cooking only)
  5. Commercial
Electricity

The priority should be given to the industries producing export quality products. While the other industries which are not involved in export or producing substandard products should be confined to single shift only thus conserving the electricity for prioritized industries. Some priorities include:

  1. Generation of electricity through renewable resources especially hydropower with a gradual cut back on thermal based plants.
  2. Installation of solar panels on rooftops of villages not connected to the grid to ensure maximum penetration of electricity in the country.
  3. Increase in efficiency of Coal based plants in order to curtail environmental footprint and ensure maximum utilization of fuel. The recommendation is to move towards higher efficiency and lower emissions (HELE), and ultra-super critical power plants would be the way forward.

The practice of closing the business activities by 8:00 pm needs to be replicated again in order to cut down the electricity usage and spare it for domestic and industrial usage. It is common practice that most of the streetlights are kept on even during daytime, therefore, they needs to be managed appropriately.

 

In long term in order to manage the demand side issues in electricity following measures should be taken:

  1. The houses should be designed in a way to minimize the usage of electricity at-least during daytime.
  2. The industries should also be designed in a way to maximize the usage of day light and reduce the electricity consumption at-least during daytime. In addition to this there should be annual energy audits of all industries to avoid the wastage of electricity.
  3. The streetlights in long term should be converted to LEDs to minimize the electricity consumption.
Transport

In short term, the transport sector is prioritized for use of fuel oil and discourages the use of gas. Promotion on the use of public transport for optimizing the use of fuel in transport sector. In addition to this, the hybrid cars should be introduced on gradual basis in this sector to reduce the expensive oil consumption and relieve the burden on national exchequer.

Power
  1. Allocation of gas to the most efficient thermal power plants on immediate basis to optimize the utilization of this resource and spare the gas for industrial use.
  2. Re-negotiation of the price of LNG with Qatar as the current price of imported gas is estimated around $19/mmbtu (incl. CIF, shipping costs etc.). Moreover, Pakistan will have to explore import options with other natural-gas rich countries, to have a better bargaining position. Considering the Shale Gas revolution’s impact on natural gas pricing, the trend is of lower prices in LNG deals. For example, Cheniere made a deal with Gail India from 10.5/mmbtu. There is also the phenomenon of delinking of oil and gas prices, and countries will have to rethink linking LNG prices to oil-indices.
  3. Energy renovation and modernization of thermal power plants to enhance the fuel efficiency and optimize the gas usage.
  4. Gradual shift of power generation from thermal to hydro resources.
Oil Monitoring

Real time monitoring of quality and quantity of imported fuel oil through web-based procurement system Inclusion of contract performance clauses addressing the specification i.e. sulphur content, basic sediment and water and specific gravity, of procured fuel oils in sales/purchase agreement. These clauses, if present in contract would help to monitor the quality and quantity of procured fuel oil. As any deviation in the aforementioned specification would be subjected to the price variation accordingly. The real time monitoring and presence of these performance-based clauses if included would optimize the cost of generation thus having direct impact on end user tariff. Moreover, this step would also provide a relief to the circular debt as import bill is one of prime components of this debt.

Promotion of Biogas buses in order to reduce the dependence of oil in transport sector. It is estimated Pakistan is the 13th largest country in cattle production can produce biogas with high concentration of methane required in biogas buses. Thus, this increased amount of waste shouldn’t be wasted and utilize to reduce the dependence on oil. In addition to this, the usage of petroleum products in transport can be reduced through modernization of railway system and shift both passenger and cargo trains from diesel to electricity, as practiced in India. It is estimated that around 1000MW of electricity would be required in modernizing the whole railway track which if implemented would play a pivotal role in reducing the burden of import component in circular debt.

The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan

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