POWER CRISIS: A THREAT TO ECONOMIC SURVIVAL

(SHAMSUL GHANI shams_ghani@hotmail.com)
Nov 03 - 09, 2008

Like Mr. Shaukat Tarin, who has been making hectic efforts to resolve the financial crisis, perhaps the PM needs another advisor who could take up the power crisis issue with the seriousness it deserves. The lack of a sense of urgency to attend to the gnawing problem is really disturbing.

Apart from the social upheaval and public hysterics this monster has brought with it nose-diving economic activities and portended greater danger for a country already under severe economic and financial stress. A lot is being said and written about the issue, bordering on cogent to inexplicable. Confounding analyses and reasons are being marketed with a plethora of suggestions to correct the situation.

We are being told to import 4000MW of electricity from Central Asian countries. This is a long shot and something in total defiance of our urgent requirement. Then we are advised to produce solar and other renewable-source energy. Correct; this will certainly augment our generating capacity but what about the crippled economy of Karachi and other industrial cities of the country that require an immediate scaling up of power supply position to keep the wheel of economy from going to a grinding halt.

Country's installed capacity is 20,000MW which can be made to operate at 75 to 90 percent levels. And that is much more than what we presently need. We are presently getting 11,500MW owing to the technical and financial mismanagement. Every Tom, Dick and Harry, while sitting at some TV reality show, blames the previous government for, according to his perfunctory knowledge, failing to add a single mega watt during its tenure.

Out of their bias for the previous government, even the knowledgeable lots withhold the fact that till 2005, we were surplus on power generation and that thereafter projects for 30003500 mega watts were launched. The need for long term planning notwithstanding, our present problems are of short term nature that call for upgrading of production, transmission and distribution capabilities coupled with the optimum utilization of existing capacity. The circular debt problem that hinders maximum generation needs a financial solution rather than any rocket-science technical knowledge.

The overhauling of faulty transmission and distribution systems responsible for huge outages is also an investment issue and is to be solved through funds injection. Theft control and non-payment of bills are administrative issues and can be solved accordingly. So, it is the upgrading of energy supply system and security that can take us out of the "current crisis."

On the long term front, China's committed assistance to increase our nuclear power generation capacity through Chashma-III & IV projects is a welcome development. Friends of Pakistan group is also interested to invest in our energy development programs. The recent meeting of Deputy Chairman Planning Commission with the World Bank and IFC officials has also opened negotiation channels to secure cooperation of renowned global lenders for our energy related programs. These programs include fourth extension of 960MW to the generating capacity of Tarbela Power Plant coupled with the technical assistance for de-silting of the dam; Suki Kinari project for 840MW; Munda dam for water sufficient to irrigate 740,000 acres, and 700MW of electricity; Kurram Tangi dam for water sufficient to irrigate 150,000 acres, and 84MW of power; enhancement of power generating capacity (from 1100MW to 1600MW) of gas-based Guddu power station.

After a good deal of deliberation between the two parties, the international lenders agreed to consider support for improvement in efficiency and security of our energy supply system. The position taken by the World Bank further proves that besides the enhancement of installed capacities, we should also focus on consolidation of the existing capacities by upgrading efficiency and security.

Planning Commission's Vision 2030

The energy mix envisaged in the Planning Commission's vision 2030 development program, reproduced here below, needs to be reviewed.

 

THERMAL

HYDEL

NUCLEAR

RENEW-
ABLE

TOTAL

 

OIL

GAS

COAL

Existing Capacity

6,400

5,940

160

6,460

400

180

19,540

Addition

2010

160

4,860

900

1,260

-

700

27,420

2015

300

7,550

3,000

7,570

900

800

47,540

2020

300

12,560

4,200

4,700

1,500

1,470

72,270

2025

300

22,490

5,400

5,600

2,000

2,700

110,760

2030

300

30,360

6,250

7,070

4,000

3,850

162,590

Total

7,760

83,760

19,910

32,660

8,800

9,700

162,590

%age

4.77

51.52

12.25

20.09

5.40

5.97

100

The projections appear to have ignored certain facts. While 52 per cent load placed on gas-based generation is quite reassuring, yet a bit unrealistic in the face of depleting gas reserves and lack of investment for tapping of additional gas resources. Imported gas is a doubtful starter in the given conditions of law and order. The future reliance of our transport system on gas will also put additional pressure on gas reserves.

Coal is the most widely used source of power generation. Despite the divine gift of huge coal resources, we have been unable to make any headway with the exploitation of this immensely important resource. The Planning Commission has been too conservative in projecting the coal-based power generation. By 2030, it should be somewhere around 20 per cent. WAPDA has projects on hand for the generation of 25,000MW of hydel power. We should expect this target to at least double by 2030 with the construction of more water dams. Perpetual construction of new dams is highly important for us as not only they are the source of cheapest hydel power, but they also enhance our irrigation-water capacity so important to prop up our agriculture sector. We are already producing around 30 per cent power from water, so we must improve upon it. The optimal power generation mix for 2030 should, therefore, be: water 40 per cent; gas 25 per cent; coal 20 per cent; others 15 per cent.

KARACHI POWER CRISIS

The Karachi power crisis seems to have ensued more from the two 'not so transparent' KESC privatizations than any thing else. While the first privatization is now history, the Abraaj Group takeover is shrouded in a number of transactional mysteries. The new management has recently disclosed that it has done its mid and long term planning and that by June 2009, Karachi will be getting additional 400 to 450 MW. Since this is the average shortfall, Karachi has been experiencing since long, the issue seems to be almost resolved. But, is it that simple? Does not the statement of the management need to be taken with a pinch of salt? Initially, Abraaj is going to inject Rs. 31 billion to enhance generating capacity as well as to overhaul transmission and distribution systems including the replacement of 18,000 Km of transmission wires.

During the next four years, a total of Rs. 80 billion will be invested by the new management. An agreement to import a 560MW plant from China has also been executed. This plant will be commissioned by 2011. This is quite a rosy picture, but during a recent TV program, some serious allegations were made against the dubious privatization deal according to which no agreement is available to ascertain the new owners' obligation to make further investment in the project and the timeline for any such investment. The Abraaj group will do well to clarify its position.