COAL TO TACKLE POWER CRISIS

KANWAL SALEEM
(feedback@pgeconomist.com)
May 30 - June 5, 20
11

Despite being at the helm of affairs since three years, the present democratically elected government has not only miserably failed in overcoming power crisis but no steps have been taken to generate cheap power on urgent basis.

To overcome power shortfall, we still have to travel a long journey. The need of the hour is to set priorities and move forward in a right direction to tackle the challenges confronted to the national economy. The persistent energy crisis has not only hit hard to the national economy but is also causing a lot of problems for the people who are still facing long hours of load shedding.

Circular debt pertaining to furnace oil, Rs140 billion payable amount against the provinces, theft and line losses are main reasons of load shedding in the country, sources in Pepco told Pakistan and gulf economist (PAGE).

Total generation capacity in the country is 16,400MW and it will touch 18,000MW in July/August. Vested interests including powerful petroleum lobby are big hurdle in the development of power sector in Pakistan. Though there were talks of exploiting alternative sources for power generation but practically there is no result. We need to exploit this potential for the benefit of public at large.

Pakistan's energy mix is highly dependent on oil and gas. The country spends around $9 billion a year on the import of crude oil and other petroleum products.

Pakistan's energy crisis has its roots in number of issues including lack of integrated energy planning and demand forecasting and absence of central and focused entity responsible for the energy sector, imbalanced energy mix with heavy reliance on gas and oil and costly imports. Non-utilization of vast indigenous resources of Thar Coal and Hydel potential, lack of effective project structuring, planning and implementation of identified and viable projects are also the major sources of power crisis.

Pakistan heavily depends on natural gas, around 47 percent, to generate electricity. Oil follows (31 percent), and then hydropower sources (11 percent), and coal 10 percent. The power generation through nuclear means is only 1.2 percent. The country plans to increased energy mix by 2030.

According to the 2030 energy plan, power energy mix would be as follows, the gas dependence to be reduced to 35 percent, coal share to be increased to 30 percent, hydropower generation to be jacked up to 20 percent while dependence on oil will be reduced to only 10 percent. The share of nuclear and alternative resources would be up by three percent and two percent respectively by 2030 in the power generation.

Pakistan is bestowed with huge natural coal reserves labeled as "black gold". The country's coal mines are one of the world's largest contiguous coal field extending over 10,000 Sq.kms. Reserves of 175 to 200 billions tons exceed oil equivalent reserves of Saudi Arabia , Iraq, Iran, with a value of several trillion dollar. Phased development can lead to 400 to 600 mt per year coal mining in 20 years. All of Pakistan's energy requirements such as electric, power, gas, and diesel can be met by 2030 if government even now takes serious steps to reduce dependence on the costly imports of oil by utilizing coal reserves.

Pepco has been facing power shortage during the last many years due to gap between demand and supply. Although about 3,000MW has been added to the system still a deficit exists in demand and supply.

Experts believe that power crisis has arisen because of poor policy choices in the past and underdevelopment of domestic energy sources such as hydel, coal, and natural gas. In the year 2010-11, the government allocated Rs28,423.847 million for 64 on going and 22 new water sector projects in Public Sector Development Program (PSDP). The new schemes include construction of 100 dams in Balochistan, Nailing storage dam Jhal Magsi, Pelar Dam (Awarn Balochistan), Nai Gaj Dam Dadu, Bara Dam Kyber Agency, Kurram Tangi Dam, North Waziristan, Makhi Farash Link Canal project (Chotiari Phase-II), construction of eight small/medium dams in Khyber-Pakhtunkhwa and Khanki Barrage.

According to experts, energy sector is closely linked to poverty and economic sector, so it is essential the government allocates enough funds for the sector. Policymakers do talk about establishing dams and setting up nuclear power plants but why do they not understand the importance and benefits of alternate energy sources such as solar, windmill energy etc. These are cheap and quick methods for producing electricity. Pakistan is a blessed country because solar energy is available in most cities year-round. Similarly, wind energy is readily available in the coastal areas. These energy sources, if tapped, can be of great help in reducing the current demand supply gap.

According to them, Pakistan's energy sector constitutes mainly of oil, natural gas, and HNP power where the contribution is listed as 43 per cent oil, 38 per cent natural gas and 10 per cent HNP. With a substantial amount of coal in various areas of Pakistan, the country doesn't need to rely on importing heavy amounts of oil from various countries, all it needs to do is explore and attain its benefit from the natural resources it has been gifted from.

They said that Pakistan spends billions of dollars annually over the purchase of oil from the global market. Those billions of dollars it spends purchasing oil for the usage of electricity can be invested elsewhere like the devastating educational sector or even the infrastructure of Pakistan.

One must ponder and wonder over how a country that has the 4th largest coal reserves in the world has to face such devastating shortfalls of electricity, they said. All around the world countries like America the global superpower avails over 50 per cent of its electricity from coal, China focuses on providing energy to its people by extracting over 75 per cent of its energy from coal and even Pakistan's nemesis for over 62 years, India uses coal to meet 57 per cent of its energy needs.

The deepening power crisis has forced many businesses to close down apart from inviting public criticism. Despite the fact that the country is facing huge power crisis for last many years, the incumbent governments is not doing anything to thwart the impending crisis.

"It is need of the hour to start getting coal, diesel and gas from these reserves as the country is passing through a critical stage due to multi-faceted crisis prevailing in the country," experts said, adding: "If we get electricity from coal, it would cost only Rs3.5 to Rs5 per unit."