ELECTRICITY IN PAKISTAN

S.KAMAL HAYDER KAZMI,
Research Analyst
, PAGE
Sep 29 - Oct 12, 2008

Pakistan is facing a huge electric power crisis now a day. At present total power production capacity in our country is about 19,500 MW, out of which Hydel Power is only 6,500 MW, balance of 13,000 MW is thermal either using Natural Gas or Furnace Oil. Small capacity of 450 MW is Nuclear and only 150 MW is through coal. Although gas is to be provided for 5800 MW to various thermal plants, but in actual fact much less gas is being made available, the deficiency is being filled through furnace oil. It can be inferred that in the recent past, only furnace oil was used as fuel for about 9000 MW generation. Current price of furnace oil is about Rs 49,000 per ton, which amount upto Rs 49/- per kg. On an average one kg of furnace oil produces 3.8 kWh of electricity. According to WAPDA/IPP agreement, the private power producers will charge WAPDA the actual fuel cost for which they have a direct contract with PSO. The production cost of furnace oil electricity is Rs 16 per unit, add to it the transmission, distribution cost (including loses), the total cost of such electricity works out to approx Rs 22 per kWh. It is estimated that the country consumes at least 25 billion units of electricity produced annually through furnace oil, which amounts to the total deficit of Rs 425 billion. If WAPDA has to balance its books it would require a subsidy of Rs 425 billion. This deficit is somewhat reduced due to cheap power produced through Hydel energy and natural gas, but the deficit cannot change substantially, unless bulk of electricity is produced through Hydel energy. Obviously, a deficit of Rs 300 to 350 billion cannot be sustained, the government does not have resources to pay such a huge subsidy, it is also not feasible to increase the power tariff very much. Therefore the power crisis is far greater than what is being perceived. In the absence of extremely heavy subsidy, WAPDA is delaying payments to IPPs and also to the oil companies. The result is that IPPs are now producing much less electricity than their capacity.

ELECTRICITY PRODUCTION IN PAKISTAN DURING 2008

SOURCES

WORLD WIDE (%)

PAKISTAN (%)

Coal

40

6.5

Gas

19

45

Nuclear

16

2.5

Hydro

16

33

Oil

7

16

Sources: World Bank


CURRENT & FUTURE POWER POSITION

(MW)

 

THERMAL

HYDEL

COAL

NUC-
LEAR PUBLIC

TOTAL CAPA-
CITY

REQ-
UIRED

 

WAPDA

IPP'S

KESC

TOTAL

WAPDA

IPP'S

TOTAL

WAPDA

KESC

TOTAL

Installed

4,835

5,832

1,756

12,423

6,494

-

6,494

     

462

19,379

20,000

 

25%

30%

9%

64%

33%

 

33%

     

2%

100%

 

After 5 years

5,000

6,000

2,000

13,000

6,000

3,000

9,000

400

1,200

1,600

1,000

24,600

25,000

 

20%

24%

8%

53%

24%

12%

36%

2%

5%

7%

4%

100%

 

After 10 Years

5,000

6,000

2,000

13,000

10,630

5,000

15,630

400

4,600

5,000

1,500

35,130

35,000

 

14%

17%

6%

37%

30%

14%

44%

1%

13%

14%

4%

100%

 

Source: Hydrocarbon Development Institute of Pakistan.


WORLD WIDE NUCLEAR POWER PRODUCTION

COUNTRY

PRODUCTION BILLION KWH 2006

% OF TOTAL PRODUCTION

NO, OF OPERATIVE REACTORS

NO, OF PROPOSED REACTORS

NO, OF UNDER CONSTRUCTION REACTORS

USA

787

19

104

25

0

France

428

78

59

1

1

Japan

292

30

55

1

2

Germany

162

31

19

-

-

Russia

144

16

31

20

7

South Korea

141

39

20

-

3

Britain

69

18

19

-

-

Canada

92

16

18

2

2

Belgium

44

58

7

-

-

South Africa

10

4

2

24

-

China

52

2

11

86

5

India

17

4

14

9

6

Pakistan

2.6

2.7

2

13

1

Various sources

CURRENT PROJECTS

Pakistan will hire 1200 megawatt of electricity from the local and foreign organizations, as Pepco would soon be floating tender, which is being formulated. Pakistan's electricity consumption is rising by 1200MW annually and the shortage of electricity during peak hours hits at 3000/4000MW. Hydel power production in the country has also gone down by 20 percent, while thermal power production remained at 5800MW. National grid will begin receiving 315MW of electricity by December 2008.

ENERGY IN PAKISTAN (MW)

YEAR

DEMAND

SUPPLY

GAP

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

Estimated by PPIB

CONCLUSION

The Govt has recently increased the power tariff by 65% or Rs 10% unit from Rs 7.79 per unit, for those domestic consumers using above 700 units per month. This would be in addition to the 16% General sales tax (GST) in this fiscal year. However, tariff would remain unchanged for those who are below the poverty line and those who use up to 100 units per month, as their tariff has already been increased by 16% attributed to the withdrawal of GST exemption.

Currently, the plan of the Govt, should be obvious that the country cannot afford electricity produced through oil. Indigenous fuels like coal, gas, atomic will have to be developed and developed quickly. The final solution however lies in depending on the hydroelectric renewable energy, but unfortunately the narrow minded bickering on construction of dams has persuaded the planners to find an easy solution, which we cannot afford any more. Since the shortage or high price of electricity has severe detrimental effect on all sectors of economy, the situation calls for concerted short-term, medium-term and long-term actions to overcome the problem of energy shortage.