POWER OUTAGE BADLY HIT INDUSTRIAL, TRADE ACTIVITIES

RENDERING THOUSANDS OF WORKERS JOBLESS

KANWAL SALEEM, LAHORE
Jan 21 - 27, 2008

The prolonged power outage has not only badly affected the industrial and trade activities in the country but also caused huge production losses to industrial units particularly the textile processing, pharmaceutical and leather industries.

Due to ongoing electricity crisis in the country, different industries have discontinued the services of a good number of laborers pushing the graphs of unemployment and lawlessness on upward directions.

Sources in the textile industry told Pakistan and Gulf Economist (PAGE) that textile processing industry is a value addition industry, which needed uninterrupted electricity supply but unannounced load shedding not only damaged and defaced under process cloth but also destroyed the costly industrial machinery as well as quality of products.

According to industry sources, if all the generation and T&D plants do functions, there will be still a 3000 MW supply-demand gap in the country. Even if every thing is done as planned by the government, there will be a 1500 MW shortage of power in the country in 2010.

The government is urgently required to immediately work for generation of 2500 MW additional power to avoid more difficult situation, they said, adding that the government should chalk out an emergent plan to meet the present and future power requirements.

They further said that Karachi is also heading towards more serious power crisis this year due to gap in demand and supply of electricity. In 2008, minimum demand of electricity in Karachi is expected to have around 2640 MW against supply of around 1810 MW. The government should focus on power production through hydro-power or coal-fired plants based on Thar coals apart from generation through nuclear power, they added.

Sources in power sector told PAGE that an additional 2376 MW power would be generated with the start of 12 thermal power plants in private sector by 2010.

Major thermal power projects to be completed in two years included 235 MW Muridke (Shapphire) power project, 225 MW Orient Thermal power plants, 225 MW Atlas power and 225 MW Hallmore Power project Bhikki. Similarly, 516 MW power will also be generated during two years with start of six hydel power plants in private and pubic sector with major 130 MW Duber Khwar and 121 MW Allai Khwar.

According to the sources, the government has evolved a strategy to reduce power supply deficit within two year, which will help saving 750 MW from crises management and 100 MW from load management by December 2008 with total 2000 MW through crisis management by 2010. Similarly, 1750 MW will be saved by 2010 through short-term measures included 1250 MW through supply side management, 300 MW through load management and 200 through energy conservation.

On the other hand, sources in Wapda, the government expects that a total of 22 projects -- both in public and private sector -- would start production during September 2008 to June 2009 to enhance generation capacity by 4700MW that would take total installed capacity to 22400MW. Therefore, November and December of financial year 2008-09 would be the only time when there will be no power shortfall. However, in January 2009 there will again be a shortfall of 1520MW that will subside to 330MW in June 2009. These projections suggest that there will be no shortage during July 2010 to June 2011 because of about seven projects with a generation capacity of 1180MW would come into commercial production during September 2009 to June 2010. However, there would again be major energy shortfalls -- rising from 600MW in July 2011 to 2000MW in July 2013 and staying there throughout the financial year 2013-14, the sources said.

According to the sources, the government expects that a 1000MW project based on imported coal would come into production in June 2012, followed by Kalabagh dam that would start producing about 2400 MW of electricity in July 2014. Among the major projects, Kalabagh dam will be followed by 969 MW Neelum-Jhelum Project in July 2015 and then 2250MW of Bhasha dam in January 2016. Bunji power project with an expected capacity of 2700MW would come on stream in December 2016. By December 2016, Pakistan's total generation capacity would reach 43,300MW and the country will have a surplus capacity of more than 3000MW provided all the plans envisaged for completion in the next 10 years are expected to be materialized, the sources added.

The government has also evolved energy loss reduction plan that would save 300 MW through system reinforcement. Under the plan, the use of energy savers bulb will help save 50 MW in first phase while in second phase 200 MW power could be saved. Moreover, around 150 MW will be saved with the success of automated meter reading project for domestic, industrial and commercial areas, the sources pointed out.

The sources further said the Ministry of Water and Power has constituted two committees on the directives of energy task force to take short term operational measures and medium to long term development plans to redress the power crises resulting from demand and supply gap. All the concerned stakeholders including IRSA, oil and gas companies, PEPCO, NTDC, and PPIB are the members of these two committees to look into specific operational and planning issues.

The sources said the draft of long term load forecast up to 2030 will be prepared by February 7 and final load forecast by March 7 this year. The load forecast and the integrated power plan to be prepared will be reviewed and updated on year-by-year rolling basis. The power distribution companies (Discos) will also initiate a similar planning process to form the input for the integrated power planning of the country. PPIB will strictly ensure timely completion of those power projects for which LOI and LOS have been issued and Financial Close has been achieved, they added.

To promote energy saving in all segments of society PEPCO has devised an ambitious plan to distribute 5 million energy saver bulbs to across country hospitals, charitable organizations, schools and small clients of less than 100 units per month consumption. As many as 100,000 additional energy savers have already been provided to nine electricity distribution companies for onward distribution among schools, charitable institutions and small consumers free of cost. Those electricity consumers having used less than 100 units per month would be provided one energy saver free of cost. Industrialists have also been asked to replace decade's old machinery with energy efficient latest machinery to save energy and contain bills, the sources said.

Pakistan Standards and Quality Control Authority was preparing a draft law to ensure sale/import of only energy efficient electronic appliances as quality gadgets can save plenty of electricity, the sources said, adding that around 10 million electric appliances were bought by people of Pakistan during 2007.

Caretaker Prime Minister Mohammed Mian Soomro chaired a special meeting called to review the energy situation in the country and reviewed measures for the conservation of electricity, gas and fuel. He appealed to the nation to participate in the national energy conservation efforts to help confront the challenge of energy shortage.

The meeting agreed upon some of the immediate measures as well as some long-term decisions to help overcome the situation. It was reiterated that the shopping centers throughout the country would close down by 1930 hours in the evening and the electricity and gas thus saved could be utilized both by the domestic consumers and the industrial sector. The load-shedding would be managed in such a manner that the domestic consumers could contribute their share during the daylight and the electricity thus saved could be diverted to the agricultural sector, institutions as well as industry.

Moreover, the Punjab government is also going to establish a corporate body, Punjab Power Development Company Limited (PPDCL) to function as a capacity building body like WAPDA. The projects are being financed by Asian Development Bank which holds authority to approve firms for pre-qualifications and technical proposals.

Similarly, the Punjab government had invited Expression of Interest (EoI) for the installation of hydro power plants on the barrages of canals and rivers in March 2007. As many as 41 sponsors sought registration and 14 private investors submitted statements of qualification for eleven raw sites with a total potential for the production of 140 megawatts. Seven of the pre-qualified sponsors will carry out feasibility studies within a year's time after their approval by the Planning and Development Board.