Apr 07 - 13, 2008

As per Private Power Infrastructure Board, during 2008 Pakistan would be short of electricity supply to the tune of 1,457 MWH. This situation will be aggravated in the peak consumption hours and supply gap will worsen getting well beyond 1,457 MWH. Keeping in view this shortfall, and few choices for plugging this gap with indigenous energy resources, the planned and projected growth in GDP appears highly unlikely. Pakistan being an oil-consuming country is suffering due to the consistently rising demand-driven cost of energy. The domestic energy generation sources are restricted to hydropower, oil and gas, and insubstantial use of coal as the input for power generation.

Utilization of renewable energy resources is becoming a widely employed mode of electricity production. During 2004 around 1% of global primary energy came from renewable sources such as photovoltaic, solar thermal, wind power, small-scale hydropower, geothermal, biogas and new biomass. Pakistan is also gradually moving forward in the alternative energy sector. In this regard, the Alternative Energy Development Board (AEDB) was established on April 20, 2005 as an autonomous body for the purpose of implementation of various policies, programs and projects in the field of Alternative or Renewable Energy Technologies while supplying wind, solar and mini/small hydropower generated electricity in remote regions of Pakistan. AEDB is also responsible for developing the country's medium- and long-term promotion policy for renewable energy sources. There is rising need for alternate and renewable sources of energy world wide so as in Pakistan. Thus the need to develop alternate energy resources has become inevitable. The oldest and most widely used renewable energy resources are solar and wind, which have shown prospects and potential for efficient utilization. Although AEDB is striving to achieve substantial output by deploying alternate means but it needs to learn from the experiences of global leaders to cut short the time and endeavors in acquiring reliable alternative energy supply for the country. America has added 4,500MW of electricity in alternative energy only last year because of good planning.

An overview of the current status of alternate energy resources in Pakistan is given as follows:


In Pakistan 20% of the total power generation is furnace oil based. This dependence on oil makes electricity too expensive to take its toll on the viability and competitiveness of industrial production in international market and profitability of manufacturing corporate entities in local arena. Extensive dependence on oil is the primary cause of soaring import bill touching the threshold of $ 12 billion. Two alternate means to produce thermal electricity are coal and natural gas.

The presence of coal deposits in Pakistan was known before independence, but its economic value was highlighted in 1980 when large reserves of coal were discovered in Lakhra and Sonda areas of Sindh Province. The discovery of another huge coal deposit of 175.5 billion tons in an area of 10,000 square kilometers in Tharparkar district has provided a quantum increase in coal deposits of Pakistan. The total coal reserves are estimated at 185.5 billion tones. Since this discovery the emergence of a power plant based on coal is a matter of national significance. Thar coal deposits are sufficient to meet fuel requirements of the country for centuries and could generate about 100,000 MW of electricity. Only 200 million tones Thar coal (lignite) can produce 1000 MW electricity power up to 40 years in the country. Despite lapse of more than two decades from this breakthrough finding, no power plant has been installed. Local and foreign investors have been conducting due diligence exercises but non availability of water in the area and exorbitant transportation cost has led to the ultimate rebuttal of the project. Inappropriate tariff has also been mentioned as one of the motive behind reluctance of investor. Government should make every effort to develop indigenous resources and determine upfront tariff for coal based power projects derived from previous studies conducted by international organizations.


Hydroelectric power is the most economical source of electricity. In Pakistan 33.3 % power generation is based on water reservoirs in the form of big and small dams. Tarbela Dam on the Indus River produces 1,750 MW, while Mangla Dam on Jhelum River produces 900 MW of energy. The country also has smaller dams like Warsak dam on Kabul River. Pakistan has total installed hydel power potential of 6,460 MW and accumulative untapped capacity of 46,000 MW. Currently, the total hydroelectric power produced in Pakistan is about 3,000 MW. The lowering of water levels in the artificial lakes of dams during winter and early summer affects power generation, creating the need for load shedding. Transmission costs of hydel electricity is much higher as network of transmission lines is required to be laid down for delivering electricity produced to areas which require it. Secondly, hydel projects typically have long gestational periods, as compared to the other available options.

As far as prospective hydel projects are concerned, one of the most controversial dams to be built in the country is the Kalabagh Dam. Although the dam will help produce a lot of energy (and possibly solve the power crisis temporarily), Sindh and the NWFP are not ready to endorse it.

The NWFP is troubled about the construction of the Kalabagh Dam because it will cause water logging and salinity in Mardan, Pabbi and Swabi. It also fears that fertile cultivatable land near Nowshera will be submerged and a large number of people will be displaced. The apprehension of province Sindh entails that Indus estuary will undergo disproportionate intrusion of sea water, with the construction of the dam. On the other hand it will adversely affect the Mangrove forests located near the river. Fish production and drinking water supply below Kotri will also be affected badly.

Although potential for mega hydel project is prevalent in NWFP and other northern areas, but cumulative power generation capacity of small rivers and canal systems if harnessed surpasses these projects. On account of an agrarian economy there exists a vast irrigation system comprising of small water reservoirs as well as lakes which can offer hundreds of site for mini and small hydro power plants. Depending upon the head and flow of water, suitable turbines can be utilized to generate electricity and dams can be installed to the tune of under 50 MW. These ventures can be embarked on without pouring foreign money and local investors can comfortably accomplish these projects in a short span of time thereby mitigating the serious electricity shortage problems. In addition, being a renewable energy resource, every one of these investments is a substitute for expensive imported oil.


Natural gas has been a cheaper source of power production previously but it is blood curdling to mention that the discovered gas reserves are on fast diminution hampering any more power plants to be allowed on this mode. Keeping in view this grim situation the planners have been tossing around the idea of importing gas from other countries in the region. Initially it was proposed to import gas from Qatar but his option had many snags one of which was that the gas transportation pipeline was to be laid on the deep sea bed. Global experience and precedence has proved this method not only uneconomical but unsuccessful to a large part. Secondly in Pakistan experts are available with limited knowledge about this mode unable to assess the pros and cons of this project.

One of the plans amongst import through cross border pipelines included procurement from Turkamanistan which ware to be passed through Afghanistan compulsorily. Laying a gas pipeline through a war-torn and hostile Afghanistan never seemed more than a myth. As a matter of fact government of Pakistan has failed to save its gas pipeline from militants and confrontational elements even in Balochistan, how to set up proper management and maintenance system in a territory like Afghanistan which happens to be the hub of aggression and radicalism. These plans had been under way since last few years but no legally binding covenants were in entered in with both countries. Consequently now the gas supplies from Qatar and Turkamanistan are also exhausted and sold to other parties.

Another life-size assignment of gas import was IPI (Iran-Pakistan-India) which is still under consideration and current plan is to lay a 54 inch pipeline along the coastal area. This project has an inherent flaw as the route is very long lifting initial capital outlay. To be on a safer side either the pipeline has to be buried deep or there has to be construction of a lot of bridges. These bridges are to be built keeping in view the damage that could be caused to the coastal highways by flash floods, which would add a lot to their cost substantially, and the time required to build the pipeline will become uncomfortably long. Even if Pakistan starts building the pipeline, the lead time for completion will be at least five years i.e. 2013 and only after that it will be able to bridge up the demand supply gap. There is a probable shorter route for this pipeline which is through Balochistan but it is not likely to be implemented for obvious reasons of instable security situation.

Liquefied Natural Gas might be a feasible substitute to the natural gas but import of LNG also carries notable issues one of which is global shortage of LNG and all the current production facilities are reserved. Off the shelf availability of stock is improbable. Pakistan has to build close ties with suppliers in Middle East and enter into a long term agreement on priority basis. As a result, on a stipulated time when required facilities are managed by both countries the sizeable volumes of LNG will be imported under a central agreement. There are some sources that promise to supply LNG in a short span of time. These "brinks men" demand a high price for supply, and a very costly re-gasification plant would have to be installed on the ship bringing the LNG. Finally, the gas could be purchased only from the ready markets that are already over sold.

Pakistan still has huge untapped gas reserves. If we allocate more resources to their exploration there is a possibility that in the near future part of the energy resource gap may be met from new reserves. In order to realize this objective government should revise well head prices reasonably upward as well as gas pricing should be optimized. A reasonable amount of investment in this sector can only be secured if the limits placed on increasing the profitability of this sector are justified. Since the cost of exploration has gone up substantially therefore current well head prices do not corroborate further investment at the current rate of return. The other factor discouraging exploration of new gas reserves, which would continue to haunt us, is the law and order situation in most of the areas where gas finds can be a possibility.


This energy is extracted from atomic nuclei. Fission reactors have been producing electricity commercially for about 30 years. Two nuclear power plants produce electricity in Pakistan Kanupp is running for the last 32 years and Chasnupp, the second one, began to operate in 2000. Today nuclear energy represents only 0.9% of the electricity produced in Pakistan, which is far below other countries like China. Development of nuclear plants is part of the government plans; the construction of Chasma II is under consideration, as six nuclear power plants projects are envisaged. The Pakistan Atomic Energy Commission (PAEC) is being asked to firm up its new projects to generate 8,800MW of nuclear energy by 2030. However, the PAEC is also expressing its inability to deliver as China is taking time to provide 4-6 nuclear power plants as agreed between the two countries. China is stated to be under pressure from a 38-member nuclear supplier group acting on the directives of the United States. According to the PAEC officials, Chashma-1 is generating 325MW of nuclear energy while Chashma-2 of the same capacity will be commissioned in 2011 as per schedule. The Karachi Nuclear Power Plant was established with the help of the Canadian government in the 1960's has a capacity of 137MW is over-age and is currently generating only 90MW nuclear energy. In late 70's Pakistan attempted to strike a deal for nuclear fusion reaction based power plant in association with France but the deal did not materialize due to mounting international pressure and fear of US sanctions on the economy.

Nuclear energy has environmental advantages compared to conventional thermal power plant because of the absence of toxic emissions of carbon dioxide and sulfur oxides. But, the investment cost is very high and the construction time extensively long. Nuclear energy could not meet needs in the short run, as it is still in its infancy in Pakistan. The two main reasons given to implement new nuclear power plants are the low cost of the electricity produced and the absence of harmful emissions compared to conventional energies. However, a research by SDPI, Pakistan, on Economics of nuclear energy in Pakistan showed that nuclear energy is more expensive than conventional thermal energy. The cost of nuclear energy is 20 cents per unit compared to 12 cents per unit for thermal energy. Nuclear energy is hence not an affordable response to energy deficit.

Due to the changed geopolitical realities, expansion of Pakistan's nuclear energy base for civilian uses seems unlikely. The lobbies that advocate non proliferation no longer trust Pakistan as there exist a trust deficit owing to the apprehension of extraction of plutonium out of spent fuel, although Pakistan has already achieved its goal of assembling nuclear weapons via the uranium enrichment route. The other disadvantage of civil nuclear energy might be the disposal of radioactive material and a constant flow of fuel rods and the required spares to operate the unclear power stations. These factors will again be a burden on the scarce foreign exchange reserves.


In windy areas, windmills are used to convert wind energy into mechanical energy, which in turn, is converted to electricity. Wind energy is not being used in Pakistan, but can be used in coastal areas and mountainous regions, such as Chitral, Gilgit and Swat. This is the most environment-friendly source of power. AEDB has been assigned by the Government of Pakistan with the target of producing 700 MW of Wind Power by the year 2010 and 9700 MW by the year 2030, through the private sector. Currently, there are 84 IPPs in the country, who are planning to install 50 MW wind farm each, under the Policy for Development of Renewable Energy for Power Generation 2006 issued by the GOP. 225 wind water pumping systems have been installed in Balochistan. Over 140 micro wind turbines of 500 Watts each are operational in Sindh and Balochistan, providing electricity to 691 houses in eighteen (18) remote, off-grid villages. AEDB is in the process of getting this data validated by Rise National Laboratory of Denmark. Potential areas cover 9700 sq. km in Sindh, with suitable average annual wind speed of 7 m/s at 30 meters. The gross wind power potential of this area is 43000 MW and keeping in view the area utilization constrains etc. the exploitable electric power generation potential of this area is estimated to be about 11000 MW.

The government is following a policy to encourage investment in wind energy. Land has been allocated to various projects in Sindh and but at the same time the concerned provincial government has escalated the lease rental on land from Rs. 500 per acre to Rs. 1000. This sudden and substantial escalation in price can be a disincentive for the investors. The other issues confronting the wind power sector are as under:

* Technical expertise in this field is practically no existent in Pakistan and importing expert workforce can turn the project very costly.

* There is scarcity of wind power equipment the world over. Propelled by GDP growth needs, demand for energy has been growing globally, and as cost of energy derived from fossil fuels has increased two-fold during the last three years, the demand of wind power equipment has also grown manifold.

* The price os equipment is inflating speedily due to growth in demand and increase in the cost of metals, especially steel and its products.

Due to all these stated factors, the cost of generating electricity using wind power technology remains high while the current tariffs being offered by the government are low. Currently, the estimated cost of power generation through this technology is Rs11 to Rs12 per KWH while the tariff allowed by the government ranges from Rs10.5 to Rs10.75 per KWH.

To boost the wind power energy sector, the government should agree to realistic tariffs so that investment could become attractive and feasible. Although the cost of equipment and know how is high, the advantages of wind power are quantifiable, and after a number of years, electricity generated by this technology would become the cheapest compared to alternate sources of energy at that point of time. The case for such adjustment is strengthened by the fact that, at present, the government is subsidizing oil prices by paying price differential claims. Diesel alone is being supplied at the parity value equivalent to $52 against an average market price of $93 per barrel.

Initially domestic producers could enter into technology transfer agreements and the industry could grow, which, in the past, has been the case with various other technologies. Small suppliers' chains would erupt as we have seen in Sialkot, Gujranwala and Gujrat where, to produce finished goods, many exporters now only have to assemble the components manufactured by domestic suppliers in the small and cottage industries sectors.

The considerations that place wind energy on top of the list are that generating energy using this technology requires no fuel, and the energy production process does not pollute the environment. If Pakistan starts producing even a part of the hardware of this technology then, progressively, the equipment would become cheaper, and there would be less drain on the foreign exchange reserves compared to the pressures generated by import of fossil fuels to generate power through heat conversion that requires burning environment damaging fossil fuels.

The AEDB issued LOI to numerous investors. But tariffs and administrative issues pertaining to the National Electric Power Regulatory Authority (Nepra) and the National Transmission and Dispatch Company (NTDC) of Wapda have not been sorted out. Nepra is believed to have refused to offer a tariff of more than 12 cents for each kilowatt but wind power investors were seeking more. While Nepra is not prepared to give what investors describe as a "fair tariff" for wind power and other sources of energy, bureaucratic hurdles, allegedly created by the NTDC, were also pushing the people to avoid putting up any project.


Mirrors and lenses are used to concentrate solar energy, which can be turned into electrical energy. According to experts, if 0.1 percent of the sunrays that fall on the earth are used to produce electricity, it will be enough to meet the world's annual energy requirement. On a cloudless day, solar energy that reaches the earth's surface in eight hours has an intensity of 0.8 kWm-2. The most common method to produce electricity from solar energy it is to allow sunlight to vaporize water, which can be used to run turbines to produce electricity. In Pakistan, some private companies are also producing electricity with this method. Nickel-Cadmium batteries can also be charged by connecting them to solar panels. This type of electricity production is also environment friendly. This power generation mode is vastly suitable for rural areas of Pakistan as there is abundant solar radiation. As 70% of the population lives in rural areas and a large number of small villages are scattered around main grids. It is not cost effective to take transmission lines to all these small areas. For small households special devices can be produced for specialized purposes

At present, except for low-ampere domestic use, solar energy is a distant possibility, although in a country like Pakistan where clouds are a rarity for most part of the year, it could be a workable option. There is a simple way of harnessing this energy for the industry, which is dependent on steam generation through oil or gas-fired boilers. Water can be pre-heated by converging sun rays on tanks made of metals/alloys that can easily absorb the heat. This pre-heating can reduce the cost of producing steam and reduce the energy resource gap to an extent, though negligible. But this project is facing the impediment of lack of funding as the initial capital outlay is around $ 2 billion.


Energy can also be obtained from cattle dung. To do this, the dung is kept underground. This produces pressure on the dung and it decomposes. A small outlet is kept above the dung through which hot vapors rise. These vapors are used to run turbines that generate electricity.


The heat present in the earth's core is also used to produce electricity. This is one of the most harmless ways of producing electricity. Geothermal plants are working in the US, Iceland, Mexico, Italy, Japan, Philippines and New Zealand, but none in Pakistan.


If Pakistan chooses to rely on fossil fuel to generate electricity it would be a constant burden on the country's foreign exchange reserves, and due to continuously increasing price of oil, our exportable surplus would become progressively more uncompetitive, goods for local consumption would become costlier, some industries could face closure/bankruptcy and the country could face economic stress on a wide scale. Government has also been working on the option of importing electricity from neighboring countries. In this regard on March 9, 2006, Tajikistan, Kyrgyzstan, Afghanistan and Pakistan agreed to lay 900 kilometers of transmission lines via Kabul and Jalalabad. Afghanistan assured the countries involved that it would provide complete security for the power lines. Kyrgyzstan has a surplus of 4,000 MW of electricity out of which it agreed to supply 3,000 MW to Pakistan while Tajikistan can supply the country with 1,000 MW. Power generation also drops in summer because of a shortage of water in the dams. Getting 4,000 MW from Tajikistan and Kyrgyzstan can serve to bridge the gap between demand and supply, but the problem is the safety of the transmission lines in Afghanistan.

It is therefore imperative that Pakistan finds workable remedies to the looming energy crisis and such remedies encompass practical solutions to the problems arising out of growing population and the growing energy needs to support reasonable GDP growth. Currently AEDB is engaged in providing electricity to remote areas. So far 1762 houses in 31 villages are provided electricity in Sindh through solar and wind energy. Need of the hour is to fully harness the potential of renewable resources out of which wind and solar energy can play the primary part to bring a complete turn around of the economy.