May 30 - June 5, 20

At present, Pakistan is facing the worst energy crisis that is affecting its economy and sparking resentments among the masses. A few public demonstrations also turned violent and it is feared that the situation could get from bad to worse because little is being done to remove the factors responsible for the looming energy crisis. The time has come that all the stakeholders join their hands and come up with policies, which could yield immediate results.

Even a cursory look at the energy sector shows that Pakistan is heavily dependent on oil and gas. The persistent hike in global prices of crude oil is not only causing cost pushed inflation, but rendering energy cost unaffordable. Therefore, the first step for overcoming the prevailing energy crisis is to try to change the existing energy mix. It is true that the situation cannot be changed overnight but coming up with appropriate policies and facilitating investment can set the ball rolling.

Keeping in view country's topography, location of industrial units and population concentration, overcoming the prevailing crisis is not possible without coming up with area specific solutions. While it is true that hydel generation costs the least, taking electricity generated in the northern areas to rest of the country, particularly Karachi is economically unviable.

With blowing of electricity towers becoming a routine, the power generation facilities have to be created in the neighborhood. Without exaggeration, the policy planners just do not have the slightest idea about the electricity demand of Karachi. They still estimate it around 2,500MW, whereas the actual demand exceeds 5,000MW. Therefore, there is an urgent need to add another 3,000MW power generation capacity based on various alternatives except fossil oil and gas. There are three options available 1) coal, 2) wind and 3) solar.

The option of nuclear energy has not been included deliberately because the very idea upsets the United States; an obsession that Pakistan wishes to go for uranium enrichment only to produce atomic warheads.

The ideal solution is installation of wind turbines on the coastal belt. The biggest advantage is that windmills do not create any pollution but the biggest problem is these are capital intensive. The cost issue can be overcome by going for local production of turbines, following the footsteps of India. When India decided to acquire wind turbines in thousands, it faced long waiting time. It formed joint ventures for the local production and within short span of time succeeded in generating over 8,000MW electricity for windmills.

The prudent decision helped in transfer of technology, creation of a different type of jobs and saving billions of dollars, which would have been otherwise spent on import of fossil oil. To begin with, Pakistan can import these turbines from India.

The second best option is exploitation of coal reserves of Sindh available in the adjoining areas of Karachi, nearest being Lakhra. A coal-fired plant though of a very nominal capacity has been established but was shutdown due to gross mismanagement. The first effort should be to revive this plant by installing pollution control equipment and then trying to expand the capacity.

However, the ultimate objective should be to exploit Thar coal. The work has already started on various projects and the only support the promoters need from the government is creation of infrastructure i.e. construction of roads, supply of fresh water and linking up these power plants with the national grid.

It goes without saying that 'oil lobby' is the strongest lobby in the world and it raises all sorts of objections on establishing coal-fired power plants. They even buy out the loyalty of policymakers in the third world. If any one disagrees with this statement, he/she should try to study Pakistan as a test case. At one time Pakistan was producing over 60 per cent of its electricity from hydel plants but now the share has reduced to less 30 per cent. The multilateral institutions decided not to release funds for construction of hydroelectricity projects but were ready to provide funds for fossil oil based power plants.

Some of the objections on construction of dams are that they are potential threats, cause displacement of people and often submerge fertile areas. However, one fails to understand resistance on construction of 'run of the river' type hydel plants. These plants do not require creation of any water storage facility and also do not cause displacement of people. However, an argument often used to oppose such projects is 'these are too small'. The self-proclaimed experts ignore a harsh reality that that these units can be constructed closest to the point of consumption and technical losses are the least.

It has been repeatedly said that sugar mills are capable of delivering around 3,000MW. Since these units are located in the rural area, suffering up to 12 hours of load shedding, awarding sugar mills the status of independent power producers (IPPs) can help in overcoming load shedding in these areas. Since these units will mostly use baggase as fuel the average cost of generation would be low and will be a big incentive for the mills to further enhance their power generation capacity.

The two other advantages will be reduction in cost of production of sugar and availability of more molasses for the production of bio fuel. The mills can start immediate dispatch once the government finalizes the bulk power purchase tariff. It should be the same as being offered to other IPPs.

Some of the quarters are resisting offering sugar mills the tariff being offered to on IPPs on the grounds that they would use a cheaper fuel. However, this is an incentive for the mills to go for maximizing power generation. This will save the country not only from spending billions of dollars on import of oil but can help the country become a major exporter of sugar and enhance indigenous production of bio-fuel.