REAL ENERGY CRISIS AFOOT

DR.S.M. ALAM
(feedback@pgeconomist.com)
May 24 - 30, 20
10

The energy sector plays a pivotal and key role in the development and growth of the economy, as the availability of adequate supplies of energy is a prerequisite to generate economic activities and for energy production hydel, gas, oil and coal are the main components of this sector.

Energy consumption in Pakistan is increasing with each passing day. The power shortage and the frequent and unannounced load shedding in various parts of the country has created serious uproars as the whole country and its rural vicinities have been taken over by looming shadows of darkness owing to prolonged power outages on routine basis.

This daily scenario in power failure has cast serious repercussions to the socioeconomic lives of the people who mind little hope of finding any relief from this unending energy phenomenon.

The hydropower potential in Pakistan is estimated at 22,000 MW and the government is giving top priority to exploit this potential to cater to the increasing demand for water and power resources. Pakistan has a total installed generating capacity of electricity of nearly 19,222 MW annually. The break-ups are WAPDA 11,654 MW (58.2 per cent), Hydel 6493 MW (56.9 per cent), Thermal 4835MW (43.1 per cent), IPPs 5873 MW (30.3 per cent), KESC 1,756 MW (9.1 per cent), nuclear 462 MW (2.4 per cent), and renewable 700MW.

The independent power producers (IPPs) are involved in power generation only while private and public sectors engage in generation as well distribution, and transmission.

Between 1985 and 2008, Pakistan's total installed power generation capacity increased nearly fourfold i.e. from 5229 MW to 19,522 MW. An average annual increase of more than 10 per cent has been recorded in recent years.

The government is committed to develop this sector in order to promote sustained industrial growth and benefit the growing national economy. On an average , the household has been the largest consumer of electricity, accounting for 44.3 per cent, followed by industrial 29.1 per cent, agriculture 12.8 per cent, commercial 5.8 per cent, government 7.3 per cent, and street lights 0.6 per cent.

The main objective of the energy sector is to ensure adequate, secure, and cost-effective supplies, utilize the resources efficiently and minimise the losses.

The power sector in Pakistan is owned by WAPDA and KESC. Together WAPDA and KESC transmit and distribute all power in Pakistan.

Pakistan has significant oil, gas, coal, mineral ore deposits as well as solar and hydel potentials. The country has oil reserves of over 27 billion barrels as of January 2008. The oil and gas are two major components of Pakistan's energy and contributing more than 75 per cent of energy requirement of the country. The majority of produced oil comes from proven reserves located in the southern part of the country.

The government in this regard has been adopting policies to increase the share of indigenous resources and has awarded 100 exploration licenses in 2004-5, which has resulted in significant investment in the oil and gas industry in the country. Gas production during the last five years has risen by 62 per cent. The country's two gas distribution companies in north SNGPL (Punjab, Kphkwa, FATA, AZK etc.) and in south SSGCL (Sindh and Balochistan) have distribution network of more than 80,000 kilometers and gas transmission line of 10,000 kilometers.

Pakistan is among the most gas dependent economies of the world. It has a well developed and integrated infrastructure of transporting, distributing and utilisation of natural gas. Natural gas is found whenever oil and gas occur together. Natural gas largely contains 80 per cent methane along with small quantities of ethane, propane, butane and carbon dioxide, and occasionally helium.

Gas is the prime source of energy in Pakistan as it provides nearly 60 per cent of the natural energy requirements. Total reserve of the gas in the country is nearly 282 trillion cubic feet.

Natural gas is piped from gas wells for use as fuels in the homes, industries and into thermal electric power stations in the different parts of the country. The biggest consumer of gas is the power sector which uses it for generating electricity. Nearly 50 per cent of the gas is used by the power sector. Industry uses another 20 per cent. The next big consumer is the fertiliser industry which uses 16 per cent as feed stock for producing urea.

During 2007-08, the total gas consumption gas was 1.5 trillion cubic feet (TCFT). Pakistan's reserves are adequate for about 24 years.

Gas domestic consumers are over 3.9 million and commercial consumers are 80,000. Gas production has been increasing at a steady rate of 10 per cent per annum. In fact, Pakistan has the best integrated gas supply system amongst the developing countries of the world.

The total number of vehicles running on CNG has reached over 902.000 making Pakistan the world's second and Asia's largest consumer of CNG in the transportation industry.

The commercial requirement of energy in the country has doubled over the last decade, with the demand for natural gas growing at 10 per cent per annum. Pakistan is also emerging as the preferred transit route for energy in the region, due to its ideal geographical location at the crossroads of Central Asia and the Arabian Sea.

The demand for petroleum products is expected to stay steady at 20 million tons per annum with the increased energy demand to be catered by additional indigenous gas supplies. The total oil resource potential is 27 billion barrels. With crude oil refining capacity 11.28 million tons per year. The locally refined products per year are 8.7 million tons per year. The total consumption of oil is 20 millions tons per year and imports are 17 million tons per annum.

The coal is the another source of energy product in the country. Pakistan is the world's 8th biggest producer of coal and the total proven reserves of coal in the country is estimated at 184 billion tons.

Energy resources should be efficiently utilised so as to get maximum benefits for the varieties of fields. The new technologies and procedures adopted internationally should be critically analysed for their practicability in the country. According to some experts, the country's acute power crunch could be obviated by utilising the vast reserve of high quality coal. The demand of power in the country witnesses a continuous increase.