May 16 - 22, 2011

People are once again experiencing massive power load shedding this summer due to increased demand and instead of any rise further decline in power generation.

Riots have been reported from many cities as people frustrated with frequent power outage do not find any outlet to vent their anger except protests. The industrial production has also suffered badly adding further to economic decline and the curse of unemployment. What to say of villages and rural areas when the main cities of the country are facing up to 14 hours a day power outage thus pushing the country into total darkness and badly impacting the industrial outputs as the present government has not made any serious effort to resolve the issue.

The rental power projects the only step taken in this direction by the PPP led government during the last over three years have added a new chapter in the corruption history of the country instead of making any significant increase in the production of electricity. According to the experts, the country is likely to face a highest ever shortage of over 8,000 megawatts during this summer.

The energy crisis has deeply aggravated in recent months due to a shortfall of over 6000MW recorded last week. Circular debt issue, shortage of gas for production of electricity, and the inefficient distribution system are the main causes of this rising shortfall in supply.

The country is presently producing about 16000MW of electricity from different sources against the installed capacity of about 21,500 MW against the present demand of about 22,500MW which is rising at the rate of about eight per cent per year. Out of the present production, about 70 per cent is produced through oil and gas fired thermal power units, 27 percent through hydro-resources and remaining three percent through coal and nuclear resources.

Current shortfall of about 6000MW is because of shortage of water in the dams, furnace oil, and gas used in production of electricity. The shortage of furnace oil is attributed to the disturbed payment schedule and mounting circular debt.

The power sector consumes about 700,000 tons of furnace oil per month of which 400,000 tons is imported and remaining 300,000 tons is produced by domestic refineries who purchase crude oil against cash payment but supply the refined furnace oil to the power companies that do not follow the payment schedule strictly resulting in stoppage of supplies.

Besides, resolving the issue of debt settlement what Pakistan needs badly is to evolve a multidimensional strategy to improve the supply of furnace oil and gas to the power sector in short-term perspective and reduce dependence on furnace oil in the long term, as the cost of electricity per unit by it is around four-time costlier than electricity generated through gas or coal.

According to an estimate, oil shortage would jump to 550,000 barrel per day by 2015 and 700,000 barrels by 2020 respectively. Similarly, gas shortage would almost double by 2015. This is high time we should start looking to alternative sources, which are luckily available.

The government has three options to address the power crisis in short and long terms. First and the foremost, for the short-term, it should overhaul the power sector's financial management to resolve the pivotal issue circular debt. The import of electricity from Uzbekistan should be taken up at top priority basis. Uzbekistan is already exporting over 3000MW of electricity at the rate of six cent a unit and it has already offered to extend the supply line from Kabul to Peshawar and supply up to 2000MW at the rate of about eight cent per unit (about Rs7) as against Rs12 per unit we are presently paying to the rental power producers.

Iran is another country in our close proximity, which is willing to help us in managing in our power crisis. Islamabad has been reluctant to take the initiative due to US pressure. It is high time to demonstrate strong political will to safeguard our national interests by meeting our energy needs through Iran's help. We can overcome the present power crisis to a large extent by importing electricity from Uzbekistan and Iran at a comparatively cheaper cost.

Secondly, the problems linked with the supply and cost of furnace oil and gas have to be resolved by reducing dependence upon them.

The only option is to focus on hydro and coal resources for electricity generation. Nature has been very kind to us as Pakistan is blessed with tremendous hydro and coal reserves. Both the resources can produce cheap electricity to meet the country's growing demands for a long period. Our present suffering on this count is the result of criminal neglect of our successive governments both civil and military who ruled this country during the last three decades and did practically nothing except lip service, leading us to the present time of the worst energy crisis.

The feasibility studies of Kalabagh and Bhasha dams were prepared and approved during 1985 to 1988 and the completion period was estimated at seven to eight years. Had these two dams with a total production capacity of over 9000 MW been built as planned there had been no energy crisis in the country.