Pakistan Electricity

Pakistan Electricity Crisis - a real perspective

2011-04-18T08:02:00.000-07:00

The country is facing a huge electric power crisis today. This crisis appears insurmountable in the near or even long-term future, unless proper understanding and correct implementation is undertaken on priority basis. At present total power production capacity in the country is about 19,500 MW, out of which Hydel Power is only 6,500 MW, balance of 13,000 MW is thermal either using Natural Gas or Furnace Oil. Small capacity of 450 MW is Nuclear and only 150 MW is through coal.
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2011-04-18T08:00:00.000-07:00

Pakistan Electricity Crisis

Author: Waheed Habib

Pakistan Electricity crisis

The latest and perhaps the most troublesome crisis faced by the Pakistani nation these days is the shortage in supply of electricity. The country is facing a huge electric power crisis these days. Though it has been more than a year since when the country is facing this crisis, but till now no proper solution has been made to this problem neither any proper planning has come into existence since the symptoms and begging of this short supply of electricity. While rolling blackouts or load shedding as it is locally known has always been a staple of daily life in Pakistan, the problem has become acute in the last couple of years.

This crisis appears insurmountable in the near or even long-term future, unless proper understanding and correct implementation is undertaken on priority basis. At present total power production capacity in the country is about 19,500 MW, out of which Hydel Power is only 6,500 MW, balance of 13,000 MW is thermal either using Natural Gas or Furnace Oil. Small capacity of 450 MW is Nuclear and only 150 MW is through coal.

It is very important to understand the consequence of the prevailing situation. Current price of furnace oil is about Rs.49,000 per ton, which amounts up to Rs.49/- per kg. On an average one kg of furnace oil produces 3.8 kWh of electricity. Thus, the cost of furnace oil for generating one unit of electricity is about Rs.13. On top of this the fixed cost of a thermal plant works out to be about Rs.3 per unit. Therefore, one unit (kWh) of the electricity produced by all thermal plants using furnace oil is Rs.16 per unit. According to WAPDA/IPP agreement, the private power producers will charge WAPDA the actual fuel cost for which they have a direct contract with PSO. As we all know that WAPDA tariff charged from the consumers is about Rs.5 per unit (kWh).

The production cost of furnace oil electricity is Rs.16 per unit, add to it the transmission, distribution cost (including loses), “the total cost of such electricity works out to approximately Rs.22 per kWh. The difference between WAPDA tariff and the furnace oil electricity is Rs.17 per kWh.” It is estimated that the country consumes at least 25 billion units of electricity produced annually through furnace oil, which amounts to the total deficit of Rs.425 Billion. If WAPDA has to balance its books it would require a subsidy of Rs.425 Billion. This deficit is somewhat reduced due to cheap power produced through hydel energy and natural gas, but the deficit cannot change substantially, unless bulk of electricity is produced through hydel energy. Obviously, a deficit of Rs.300-350 Billion cannot be sustained, the government does not have resources to pay such a huge subsidy, and it is also not feasible to increase the power tariff very much. Therefore the power crisis is far greater than what is being perceived. In the absence of extremely heavy subsidy, WAPDA is delaying payments to IPPs and also to the oil companies. The result is that IPPs are now producing much less electricity than their capacity.

In the second half of December last year, the situation got so bad that WAPDA & KESC (power generation entities in Pakistan) resorted to draconian levels of load shedding. The power cuts during this time amounted to 20-22 hours a day in most small cities and even cities like Karachi were seeing 18+ hours of load shedding.

To any planner, it should be obvious that the country cannot afford electricity produced through oil. Indigenous fuels like coal, gas, atomic will have to be developed and developed quickly.

Way Forward: Notwithstanding the systemic issues such as the failure to build new dams and previous Government’s inability to add even a single megawatt of new power to the grid during 9 years of its rule, it seems that the present crisis is a result of bad management and the lack of foresight. The total installed capacity of WAPDA and KESC totals around 19,500 megawatts. Almost two third of this power comes from thermal power plants (fossil fuels), one third is generated by water and about 2% comes from nuclear power plants.

In the short-term, the shortages have to be somehow met. The foremost immediate action which can give some relief is the conservation of energy. The government has already announced certain measures like shutting down power on billboards, hoardings and neon signs. Recently in Lahore super size televisions have been installed on important traffic points. In order to keep the temperature down air conditioners are installed behind these sets. In spite of government directions, the energy saving measures are not being implemented. Shops use excessive lights, which can be conveniently reduced. A suggestion that cities be divided in zones, and the market on these zones be closed on different days, can also save peak time energy usage. In order to implement conservation measures, the nazims, naib nazims should visit the areas and try to convince and negotiate with the people, shopkeepers etc. requesting them to cooperate in the individual interests as well as of the society at large.

At present the IPPs, and WAPDA owned thermal plants are averaging about 50 percent plant factor, which means that they are not being used to their potential level, 70 to 80 percent plant factor is quite feasible; this would require better maintenance of such plants. A higher plant factor on these power stations can provide 20 to 30 percent more energy, which will circumvent the present shortages to a certain extent. Improving the plant factor of the existing plants is far more economical then setting up new plants, although new plants will still be needed. One of the reasons for low plant factor is that the funds are not made available for the purchase of oil; solution for this factor will help in short term increase in energy production. The government has announced that immediately 1200 MW of additional plants will be set-up. At present the country has about 28 Trillion cft of recoverable gas available, the yearly consumption is about 1.2 Trillion cft, which means that even if gas consumption is increased, the existing recoverable gas will be sufficient for the next 15 years. Therefore the additional thermal generation should be based on gas, but in order to make additional gas available, the gas pressure and its transmission system will have to be enhanced.

For hydroelectric projects, the large ones can only be built on the Indus River, where not only hydroelectricity can be produced, but highly needed water storage can also be a by-product. Some legitimate objections on the environment and social impacts of large dams are there, but solutions for such objections can be satisfactorily found.

The current power crisis is grossly due to very high oil prices, and the country has to prepare itself at least for the next several years to somehow cope with it, since no immediate cheaper alternate solutions are available. It has been a big set back that new Hydel Projects have not been undertaken, neither the indigenous coal mining has started, investments in the existing as well as new gas field have been lacking. The policy orientation needs a drastic modification and indigenous resource like hydel energy production as well as development of coal mining and new gas fields should be the top priority.

Article Source: http://www.articlesbase.com/public-company-articles/pakistan-electricity-crisis-912410.html

Power generation in Pakistan by provinces- By Shahid Javed Burki

2010-06-11T03:40:00.000-07:00

Power generation in Pakistan by provinces- By Shahid Javed Burki

A Long-Term Fix for Pakistan’s Energy Woes

2010-06-10T18:22:00.000-07:00

A Long-Term Fix for Pakistan’s Energy Woes

Open Letter to Minister for Water & Power

2009-06-08T02:20:00.001-07:00

May 22, 2009 4:51 PM

Raja Pervaiz Ashraf Esq
Minister for Water & Power
Government of Pakistan
Islamabad

Respected Minister:

I always admired your party's founder Mr Zulfikar Ali Bhutto for three of his best qualities. Firstly, he was amazingly well-informed. Secondly, he was open to suggestion from knowledgeable persons. Thirdly, he was not shy to over-turn his own decisions, even if made in public, if he was convinced. We were good penpals. He responded to every letter that I sent him. He ordered every investigation that I suggested. He adopted the party organizational structure that I had sent him just before he left Ayub Khan.

It pains me to say that the present PPP leadership does not own any of these superb qualities. I am at a loss to understand why? Can you please help me understand this because your present leadership has repeatedly assured the public that the party will carry on the Mission of its Founder.

Sir, you are a very good public speaker. You can say anything with absolute confidence without stuttering words or blinking eyes or putting your gaze down. Maybe, you speak out what you are told and believe it is true. I beg to differ with your ministry officials for the following reasons.

1. You have often said that there will be NO loadshedding after Dec 2009. Sir, I most sincerely urge you to go over the documents of the past regime and you will be horrified to know that the country is estimated to have deficit every year touching 13,651 MW between supply and demand by 2020.

2. WAPDA Vision 2020 Progam envisaged completion of 5 mega hydropower projects of 9500 MW by 2016 at estimated cost of US$ 20.3 billion. How will the projects be completed by 2016 when the construction work is yet to start and funds are yet to be obtained and tenders are yet to be floated?

The program promises that 14 new projects are under study for producing 20,770 MW at estimated cost of US$ 32.15 billion. However, there is no 'khabar' about the starting and completion dates, sources of funds, etc. Daimer-Basha Dam to be constructed at estimated cost of US$ 11 billion to produce 4500MW. When it will start and complete and from where money will come, you better ask your officials?

3. In your media conference on 31st March 2009, you were kind to assure the people that the deficit in the supply and demand will be reduced to 165MW in April 2009, 800MW in June 2009 and 2500MW in Dec 2009. The present shortfall in May is estimated at 4000-5000MW. Why Sir? Last year, we had peak shortfall of 7075MW in July that virtually pulled the government down.

4. According to govt sources, the installed capacity in the country stands at 19,505 MW with thermal at 12,580 MW (65%), hydel at 6,463 MW (33%) and nuclear at 462 MW (2%). Against this, the PEPCO stated in a press statement that it was producing 12,000 MW. Why Sir?

5. Planning Commission has estimated that the country will have demand of 19,600 MW in 2008-2009 and 21,500 MW in 2009-2010. How will then you get rid of loadshedding by Dec 2009, Sir?

According to the grapevine, the government is unable to pay dues to the IPPs, IPPs are unable to pay dues to oil and gas companies and the public is unable to get the electricity for which they are obliged to pay on time or get disconnected. Wapda is unable to produce hydel power to its full capacity because.....? KESC is resorting to loadshedding after having received subsidy of Rs. 12 billion from the present government. Why Sir?

Last question Sir: Will you be the Minister for Water and Power after Dec 2009? I am afraid the next minister will make you the scapegoat if you leave the ministry by Dec 2009.

I most sincerely wish you every success in your sincere endeavours to pull the country of its power malaise by doing your best but please find out and tell us the truth. We are really fed up with promises, hopes, and millay jullay figures.

Kind regards.

Mumtaz A. Piracha
Founder & Moderator
Good Governance Forum
Pakistan

The letter was sent to email addresses of both the minister and his private secretary, but there has been no response so far.

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