ENERGY SECTOR

S.KAMAL HAYDER KAZMI,
Research Analyst
, PAGE
Jan 4 - 10, 2010

Pakistan's energy consumption, an integral part of all the economic activities, has declined as a result of the economic slowdown. Energy in its all form has declined or at least remained somewhat stagnant during the fiscal year 2008-09. The most prominent has been the large scale manufacturing sector which due to its negative growth of 7.7% experienced decline in the energy consumption.

ENERGY CONSUMPTION (JUL-MAR)

ELECTRICITY (GWH)

COAL (000 METRIC TONNE)

YEAR TRA HH COM IND AGRI SL OTHER GOVT. HH POWER BL CEMENT
2007-08 7 25168 4101 15713 6477 321 3421 1 132.6 3325.4 3100
2008-09 4 23643 3829 14563 6501 307 6767 0.8 110 2911.6 1,800.0
TRA: TRACTION, HH: HOUSEHOLD, COM: COMMERCIAL, IND: INDUSTRIAL, AGRI: AGRICULTURE, SL: STREETLIGHT, BL: BRICK LINKS

SECTOR PERFORMANCE 2008-09

During the year, supply and consumption of energy remained lower than previous years. The consumption of energy remained low due to slowdown of the economy, although the major cause behind the low energy supplies remained circular debt issue in the energy sector. Energy shortages undermined the performance of the overall economy especially large scale manufacturing sector.

The consumption of petroleum products, gas and coal during July-Mar 2008-09 decreased 3.4%, 2.5%, and 26.5%, respectively over the corresponding period of the previous year. On the other hand, supply of crude oil, petroleum products, coal, and electricity during the first nine months of the fiscal 2008-09 decreased 5.5%, 2.8%, 26.5% and 17.9%, respectively over FY08.

Production of crude oil per day decreased to 66,531 barrels per day during July-March 2008-09 from 70,165 barrels per day during the same period last year, showing a decrease of 5.2%. The average production of natural gas per day stood at 3,986.5 mn cubic feet during July-March 2008-09 as compared to 3,965.9 mn cubic feet in the same period last year, showing an increase of 0.52%.

On average, the power sector consumed 37.2% of gas, followed by industrial sector (20.4%), household (16.8%), fertilizer (19.8%), transport (2.0%), commercial sector (2.7%), and cement (1.0%) during last 10 years (1998-99 to 2007-08).

INSTALLED GENERATION CAPACITY (MW)

COMPANY YEAR 2007-08 YEAR 2008-09
WAPDA 11,654 11,454
Hydel 6,474 6,555
Thermal 5,180 4,899
IPPs 5,760 5,954
Nuclear 462 462
KESC 1,690 1,884.0
Total 19,566 19,754

The total installed generation capacity increased to 19.754 MW during July-March 2008-09 from 19,566 MW during the same period last year, showing a marginal increase (1.0%). Total installed capacity of WAPDA stood at 11,454 MW during July-Mar 2008-09 of which, hydel accounts for 57.2% or 6,555 MW, and thermal accounts for 42.8% or 4,899 MW.

The long term energy consumption pattern exhibited a similar picture with the same mix of hydro-thermal in total energy consumption. The share of thermal generation remained higher than that of hydro generation which shows that hydro potential has not been fully utilized. The hydro potential which is located in the north is still largely untapped.

During July-March 2008-09, the electricity generation from hydro and thermal decreased 4.4% and 5.4% respectively as compared to the same period last year. Furthermore, the share in total energy generation of hydro generation remained at 33.7% while thermal generation at 66.3% during FY 2008-09.

ANNUAL EXPECTED CAPACITY (IPPS)

YEAR (MW)
2009 2543
2010 1201
2011 1268
2012 482
2013 2651
Total 8145

PRIVATE POWER AND INFRASTRUCTURE BOARD (PPIB)

Private sector projects in the power sector are processed by the Private Power and Infrastructure Board. PPIB is currently processing thirty multiple fuel (oil, coal, gas and hydel) power projects with a cumulative capacity of 8,145 MW which are expected to be commissioned from year 2009 to 2013. The annual expected capacities of private power generation up to the year 2013 include 12 oil based projects with 2261 MW capacity, 6 hydel projects with 667 MW capacity, 4 Pipeline Quality Dual Fuel/LNG Projects with 900 MW capacity, 5 dedicated gas projects with 1,218 MW capacity, four oil based rental power projects with 699 MW capacity, and two imported coal based power projects with a cumulative capacity of 2,400 MW.

ALTERNATIVE SOURCES OF ENERGY

To meet the growing demand of energy and the target of 9700 MW generation by the year 2030, the Alternate Energy Development Board (AEDB) has taken various initiatives. Under the remote village electrification program AEDB is to electrify 7874 remote off-grid villages in the Sindh and Balochistan provinces through RE technologies.

CONCLUSION

The future energy consumption poses a challenge for the country, mainly because of the increasing reliance on foreign supplies of crude. Such dependence means that the profitability of the refinery is closely interlinked with the international petroleum products and crude oil prices, which are subject to much fluctuation. The revision of the pricing formula by the government is not in the interest of the refinery. The reduction in the deemed duty has been a blow to the profitability. The situation is further worsened by depreciation in rupee value against the dollar.