POWER DEFICIT & POWER STRUCTURE

SHAMSUL GHANI
(feedback@pgeconomist.com)
Apr 25 - May 1, 2011

Power deficit subject was never taken seriously in Pakistan, no matter what the power structure used to be in times requiring strategic decisions on a highly important national and economic issue. We have a history of power balance oscillating from one form of rule to the other and then back to the starting point.

We always did have democracy, and we never did have it. Be it a military autocratic rule or a feudalistic democracy, we always did have elections, in one form or the other, but never did have a smooth run of economic affairs - the hallmark of the Western democracy. The previous regime sat in comfort till 2005 when power supply exceeded demand.

Various energy projects seeking power production capacity enhancement were launched during 2003-07, but the government failed to make a realistic assessment of the impact of high-power economic growth based on abundant, cheap supply of credit and high consumption expenditure. Their successors, the feudalistic democrats, drew political mileage from their predecessors' failure to maintain power demand and supply equilibrium, but they themselves hardly did anything of substance to improve the situation with the result that the demand and supply gap widened beyond control during 2008-10.

With the power situation getting totally out of control, the government came up with IPP and RPP solutions. Independent Power Producers (IPPs) have a checkered history. On one hand, they are known to have provided expensive energy solutions while on the other they are accused of lobbying to block moves to diversify country's energy mix to ensure a cheaper per-unit supply to the nation.

Rental Power Projects (RPPs) are an improved version of expensive energy solutions - improved in a negative sense. The power scenario aptly describes the mentality of our power structure - never go for a permanent solution of crises; keep the nation ever on tenterhooks by perpetually creating an atmosphere of uncertainty and mutual distrust.

Thar coal is a classic example. The euphoria that Pakistan has struck black gold is almost over. The nation is bewildered by the conflicting views on this black wealth of the two renowned nuclear scientists of the country. The remarks range from overly optimistic to horribly pessimistic. Who to believe? Both are national heroes in their own right. The people have lot more sufferance to undergo. Why should they suffer on this account? Majority of them is already living in the darkness. Despite its discovery in 1992, Thar coal has brought no relief to them and they don't expect one coming in near future. But, please don't play with them by forcing them to live in dream and fantasy. The relevant government authorities must come clean about this Thar episode.

The relevant government authorities - all those who have ruled this country since 1992 - have to answer many questions. What Thar coal and Kalabagh dam have in common? If Kalabagh dam has been a non-starter, why the same status is being given to Thar coal? How long the federal-province tussle will go on? Why China which has proven expertise in Underground Coal Gasification (UCG) projects and which produces around 70 percent of its energy requirement from coal has not been trusted as a major partner in Thar coal development projects? The present government has an obligation to bring the two renowned nuclear scientists on the same frequency for the benefit of the entire nation. Further, if the government feels that Thar coal reserves are a reality, then it should ensure that this fact is reflected in world coal reserve statistics. The British Petroleum's latest stats book showing world countries' coal reserves has placed Pakistan at 19th position with as meager reserves as 2.07 billion tons - just 0.3 percent of the total world coal reserves of 826 billion tons.

While work on alternative energy projects namely, wind, solar, bio etc. is in progress in various sectors, the chronic power shortage warrants thinking big that is setting up of UMPPs (Ultra Mega Power Projects) as is being done in India where projects with generating capacity of 4,000 MW are being planned and set up. Nuclear power, in view of the recent Japan mishaps, has limited scope of contributing in a big way. The rising global oil prices - with no immediate respite in the offing in view of the Arab world unrest - have put immense pressure on our fast depleting gas reserves. Our failure to import LNG in the next three months, according to the re-inducted petroleum adviser, will plunge the country into the dark. This is the ruling style of our power structure; they allow very little time to the nation to brace itself for the impending crises.

Petroleum adviser's recently announced program to shuffle the entire oil and gas sector by removing corporate heads and reorganizing the respective boards of directors is aimed more at confusing things than at correcting them. We stay fingers-crossed to see the outcome of this management-overhaul policy. LNG or no LNG, the country will go on without completely sinking into the dark. Like RPPs, LNG import is yet another short-term energy policy measure. Our focus should be on the development of domestic resources instead of reliance on uncertain energy import programs like IPI (Iran, Pakistan, and India) gas line project.

Until such time, the myth of Thar coal is boiled down to stark facts, we should keep our focus on augmenting our hydropower generation capacity. Despite abundant water resources, we have just been able to increase this capacity from 2,900 MW to 6,500 MW during the last 20 years. We all know that the lack of water storage facility and a workable dam-network reduces this capacity to a low of 2,500 MW only. The thermal power generating capacity during the same period has been increased from 5,740 MW to 12,700 MW. While thermal power generation is dependent on depleting gas resources and volatile global oil prices, hydropower generation is a product of domestic resource mobilization.

Managing the abundant, renewable water resources should have been a simpler and easier task in comparison to the management of uncontrollable variables of thermal power generation. We are utilizing just 11 percent of our hydropower potential.

Tajikistan has recently offered to assist us in setting up of hydropower projects. The Sindh government has responded by taking keen interest in the offer by outlining two such projects. One hopes that the Sindh government's initiative gets a federal nod and projects do not come under political scanning. Tajikistan is a small economy, about one twelfth of Pakistan's economy, with a small industrial base, and below-the-poverty-line population as high as 60 percent. Yet it produces about 98 percent of its electricity from river water. Had we been able to focus on this single aspect of economy, presidential advisers wouldn't have been around to forewarn us of an impending energy doom.