ENTERING THE NEW YEAR WITH ENERGY CRISIS
FOZIA AROOJ (Fozia.email@example.com)
Dec 28, 2009 - Jan 03, 2010
Current energy crisis in Pakistan has adversely affected the everyday life of the people and the national economy. We are entering 2010 with acute shortage of electricity, depletion of gas reserves and skyrocketing fuel prices. The energy shortage is worsening with every passing day. After electricity load shedding now gas is also scarce and domestic and industrial consumers are facing gas supply cuts due to a widening supply-demand gap. Adding insult to injury, the government has raised electricity rates at the onset of New Year.
We have to undergo an acute shortfall of around 3500 MW during peak hours in summer next year. Ministry of Water and Power had vowed to end the electricity load shedding by December 31 2009. But just before commencement of December 2009 a new deadline of June 2010 has been publicized on the pretext of failure of installation of rental power plants due to criticism on their tariff structure by media.
A justification is that in the prevalent hostile environment and media blitz investors don't want to risk their investments. Sharp criticism against rental power plants had created a sense of uncertainty among the investors.
Our country abounds in various untapped energy resources in different shapes. It is indeed a matter of incompetence that various governments in Pakistan have badly failed to cater to the power and water needs of the people.
The country has one of the largest coal reserves in the world. These reserves are located in Thar, Sindh. The coal deposits were discovered by the Geological Survey of Pakistan (GSP) in 1992. Later, it was discovered that Pakistan was the second largest in the world in terms of confirmed reserves of 175.5 billion tons of coal.
Thar coal is of lignite A-B quality which contains very low quantities of ash and sulfur and is suitable for power generation, with relatively less adverse environmental and ecological effects. It can be a key player in energy markets. Currently China produces 75% of its electricity from coal; India 55%; US 50%; Germany 48%; and UK 33%. Compared to that, Pakistan with its 175bn tonnes of coal reserves is content with a share of 0.7% of coal in its electricity mix.
This deplorable condition requires a serious concern in order to come out of the dilemma of power crisis, which is leading the country towards utter darkness.
Pakistan is considered the world leader in CNG use leaving Brazil and Argentina behind. However these days gas supply is inadequate and a gas holiday has been launched for CNG filling stations. As a result commuters using vehicles fuelled by CNG are experiencing considerable inconvenience. Strained gas supply is affecting the power, industrial, commercial, automotive and domestic sectors as well.
Pakistan's energy crisis will worsen next year with the gas shortfall likely to almost double to more than two billion cubic feet a day (BCFD), despite liquefied natural gas (LNG) imports planned over the next few months. The gap between gas demand and supply stood at around one BCFD this year which would go up to 2.1 BCFD by next year.
Going forward, the gas shortfalls would increase by more than 300% to 6.5 BCFD by 2020. There is a project to import gas from Iran but seems quite improbable because of political and regional security situation. The LNG project that was originally planned to be completed by June 2009, too, is not likely to deliver gas supplies before March 2010.
Pakistan's third largest gas producing field in Qadirpur has experienced unjustified delay in installation of 16 compression plants. If this plant shuts down, the country will have to shed about 690 million cubic feet of gas a day, or over 20% of current production. Beyond June 2010, it is unlikely that gas could be injected into the system due to back pressure of SNGPL pipeline as the reservoir pressure would have declined to 1000 PSI, a stage when low pressure hampers gas production.
HIKE IN PETROLEUM PRICE
The price of petrol was increased by Rs4.37 to Rs66 per litre in December 2009. The Oil and Gas Regulatory Authority (Ogra) has recently notified the new prices of petrol, kerosene, light diesel oil (LDO) and HOBC. Petroleum ministry is of the view that average crude prices surged to about $79 a barrel in the international market. In international markets the average price of diesel had increased by $6 per barrel during November 2009.† Under a new oil pricing formula, the impact of oil prices in the international market is passed on to consumers as government taxes are fixed. The oil prices are likely to upsurge in the international market because of the rising demand in Europe and North America during winter.
The oil import bill last year stood at about $9.5 billion and is forecast to be around $11.6 billion. If the gas import pipelines are not completed, the oil import bill could reach $15 billion in only two years.
1. It is estimated by ICMAP that just three run-of-the-river projects can generate as much as 4,000 megawatts. The actual figure if all prospective sites are taken into account is probably higher.
2. We have to increase investment in gas exploration to enhance overall supply. We should adopt necessary measures to ensure sustainable supplies of gas countrywide. Transport sector should be designed to conserve gas and support infrastructure and services that favor high-capacity public transportation like mass transit railways.
3. Pakistan's vast wind power and coal potential needs be tapped at the earliest and with optimal effect. Recently the Pakistan Meteorological Department identified a wind power corridor from Keti Bunder to Jamshoro district. Around 50,000 MW power can be generated from the corridor. Wind power is among the best options for power generation. The only need is to import wind power technology from Europe. In Europe, 94,711 MW power is generated from wind. The government must step forward to materialize this dream.
4. The government planned major initiatives to meet energy requirements. A plan includes establishment of Gwadar port as an energy and LNG import hub. However concentration on energy facilities at Gwadar would chiefly depend on the security situation. Government should also try to improve law and order situation to allure more investment in this sector.
5. Generating renewable gas by turning biogas produced in landfills into compressed gas should also be considered.
6. Coal, abundantly available in Pakistan, can add immensely to national demands of power. It again requires strong intentions on the part of the government to establish mining facilities in Thar.
7. Energy derived from biomass also holds great promise in a country where agriculture drives the economy.
8. Solar power is another option but unfortunately the technology is not commercially viable yet it could be in a few years.
9. Construction of small dams is yet another dream. Pakistan has one of the best river systems in the world. At least 43 positions have been identified on the Indus River for building small dams. However, the matter is in pending due to non-cooperation between the provinces and the centre.
Energy crisis has far reaching and incalculable impact on Pakistan's economy. There exists the fear of a dire economic downturn, and consequently of widespread unemployment. Any such situation can impart serious social and political consequences. It is high time that all the stakeholders particularly the government takes initiatives and resolves this issue on war footing to save the future of Pakistan.