SHAMSUL GHANI (shams_ghani@hotmail.com)
Sep 21 - Oct 04, 2009

We should prepare ourselves for enduring another round of power crisis, this time because of low water levels and restricted gas supply. The perpetual nuisance, likewise a virus, has penetrated deep in our social and economic setups. From economic angle, the power crisis throughout the country, has assumed horrific proportions giving rise to reduced industrial outputs and job losses.

Our lives are so dependent on electricity that prolonged outages literally damage the very fiber of our psyche. Besides being already in chronic short supply, water becomes more scarce owing to the monster of load-shedding. The frequent and prolonged breakdowns render the suction pumps and overhead machines inoperative making the lives of housewives miserable. The summer heat takes its toll on the body and mind of every individual, be it student, an ailing elder, or a babbling infant. The small-scale manufacturers with no stand-bye arrangement for power are hard hit by the frequent breakdown of manufacturing operations making their business an unviable proposition in an already recessionary market. The labors working in such enterprises are kept on tenterhooks as the outages make heavy dents on their daily earnings based on job completion. The overall economic impact of the prevailing power crisis should not be difficult to measure for someone having a little knowledge of arithmetic.

Punjab and NWFP seem to be the most hard hit economic zones. According to the Punjab APTMA president's statement a month ago, the energy crisis is adding substantially to the cost of doing business and rendering textile sector uncompetitive in the international market. While comparing the energy situation in Punjab and NWFP with that in Sindh, he is reported to have said: "The energy situation there is much better; there is no gas shortage management in Sindh during the winters. Barring disruption in the KESC's system on account of technical failures or rains, the industries in Sindh do not have to face regular load-shedding. That puts the industrial units in Karachi and elsewhere in that province in an advantageous position as compared to the manufacturers in Punjab or in the NWFP."

One may argue that the entire country is in the grip of power crisis with some zonal variations. Karachi is still being subjected to an eight hour unannounced daily load-shedding. KESC facing shortfall of 300-380 MW seems to be grappling with the issue in a 'blow hot and cold' manner.

The projected figures released by PPIB have proven to be realistic as during the summer we were struggling with a demand supply gap of 3,500-4,000 MW.

2003 13,071 14,336 1,265
2004 13,831 15,046 1,215
2005 14,642 15,082 440
2006 15,483 15,072 (411)
2007 16,548 15,091 (1,457)
2008 17,689 15,055 (2,634)
2009 19,080 15,055 (4,025)
2010 20,584 15,055 (5,529)

During peak demand periods, this gap further expanded to 5,000 MW. Presently, electricity outputs during summer season touch high mark of 15,000 MW, whereas during winter season the outputs come down to around 11,000 MW. We had surplus until 2005 but the absence of a proper planning resulted in gigantic deficits. The delayed rearguard action energy projects are expected to go in to production in a reasonably distant future. In response to the countrywide violent protests, the government has come up with a stopgap arrangement in the shape of rental power projects.

Rental power plants are like floating barges carrying large generators each with generating capacity in the range of 100 200 MW. The PEPCO MD foresees a total investment of $2 billion in RPPs (Rental Power Plants). Commissioning of these plants will add another 2,250 MW of power to the national grid during the current fiscal. According to him, nine of the said RPPs with an output of 1,675 MW are expected to be commissioned by December 2009. While two of these plants Atlas Power, 213 MW and Attock Generation, 156 MW have already started generation, the remaining seven would start functioning by the end of December 2009. These include Nishat, 196 MW; Engro, 203 MW; Saif Power, 213 MW; Fauji Foundation, 176 MW; Sapphire Electric, 213 MW; and Orient Power, 213 MW. According to an analysis, even after the completion of RPP projects, we will have shortfall of 2,500 MW in 2010.

While the short term measures taken by the government augur well for the people of this country in general and the industry in particular, yet the limitations of such measures need to be kept in mind and the work on the ongoing long term energy projects must not be slackened. Technical experts who are of the view that RPPs take 6 to 8 months for commissioning, have seriously questioned government's optimism about RPPs functioning by December 2009.

The relevant government authorities need to clarify this point. The issue of transparency also carries weight as the present PPP setup have been subjected to severe criticism on IPPs issue in the past. True that IPPs contributed a lot towards lessening of power crisis, but the dubious terms of agreements still haunt the analysts. The government, therefore, needs to be very careful this time.

It is heartening to note that the much delayed Thar Coal 1,000 MW project has at last seen the light of the day. The Sindh government has signed an agreement with Engro for carrying out the $3.3 billion project on public-private partnership basis. Out of the total project cost, $1.1 billion will be spent on mining and the rest $2.2 billion on power generation. Feasibility report on the project will take two years to be completed.

The successful completion of this project will open doors to power self-sufficiency. What is needed is that long-term energy goals are not lost sight of. RPPs are expensive stopgap arrangement and should be treated as such. Coal and hydro energy is our future and we should keep focus on that. If we do that, today's load shedding stories will be remembered only as a nightmare.