Energy Crisis in Pakistan
In present era of industrialization and technological advancement energy sector has gained prime importance for every country. All countries are in unremitting struggle to fulfill their energy needs and to explore more reservoirs. New strategies are being devised and successful planning is being done to satiate the hunger for power. Unfortunately Pakistan is lagging behind in this race. We are facing the worst energy crisis of our history in present years. Long hours of load shedding have crippled industrial progress and badly affected just about every segment of society. It is not that Pakistan is devoid of energy resources, rather the crisis is a result of poor management and criminal negligence of this important domain of life.
Pakistan is facing governance problem right from the beginning. Unstable political system and weak democratic institutions resulted in the development of policies which serve the cause of ruling elite rather than national interest. Moreover politicization of projects of national interest like Kala Bagh Dam has further aggravated the power crisis.
Energy crisis in Pakistan is outcome of multidimensional reasons. Most important is increasing dependence of power sector on thermal power generation. Rising oil prices has burdened the power sector with huge loans. Government debts to oil companies regularly fluctuates to around 400 billion. Consequently, power plants are working below their capacity owing to insufficiency of fuel. Alternate to this source is hydel power generation. It is economical and much efficient source of power, but unfortunately , current hydel power projects are not sufficient to meet the ever rising demand. There is a need to develop new reservoirs for generation of electricity, but as stated earlier such projects have become highly politicised. Moreover, it require considerable time and resources to complete such projects. So we are unable to get benefit of this cheaper source of energy. Other forms of renewable energy sources like solar, wind and nuclear are also being neglected. All this has led to the energy crisis which we are facing now.
Energy crisis has severely affected our economy. Industrial sector has crippled: poverty and unemployment are mounting high. Long hours of blackouts and shortage of fuel have bad psychological impacts on people’s state of mind.
Before analyzing the energy crisis in Pakistan first we discuss the important forms of energy in the world and present scenario of global energy consumption. Sources of energy can be broadly classified into two categories i.e, renewable or conventional resources and non-renewable. Former include the cheaper resources like water, solar energy, wind energy which are non polluting and can be utilized again and again. Latter are fossil fuels, hydrocarbon compounds like crude oil, natural gas and coal, which have polluting tendency and are continuously being depleted due to excessive usage.
At the world level, most of countries are dependent on non-renewable resources for their energy demands. As these resources are being depleted due to excessive usage, resultantly demand-supply gap is widening and nations are worried about these depleting reservoirs. Crude oil is a major source of energy throughout the world for industrial and other sectors. According to a recent study present global demand of oil stands at 91 million barrels per day but the supply is much less i.e., 85 million barrels a day.
Demand is increasing at the rate of 1.9 percent per annum. It is estimated that by 2030, the demand will be exceeded further by 125 Million barrels a day. Total oil reservoirs in the world are estimated to be 1900 billion barrels. Saudi Arabia is sitting on the largest reservoirs of 262 billion barrels, Canada is second with 178 bb while Iran ranks third in row with 133 bb. These major oil reservoirs are almost 30 years old on average and out of total 1900 bb, 850 bb in expected to be utilized by next 15 years. Hence expected shortage of oil in the future can lead to massive hike in the oil prices and it would be out of reach for 1/3rd of world population.
Another important natural reservoir which is being rapidly utilized in the world is natural gas. Discovered natural gas reservoirs in the world are about 6112 trillion cubic ft. Russia is at the top of the list with 1680 trillion cubic ft, Iran is second with 971 trillion cubic ft and Qatar follows Iran with 911 trillion cubic ft. Rising demand of natural gas like crude oil due to rapid industrial and economic growth has also posed the risk of depletion of this important natural reservoir. Hence at the world level nations are trying to exploit other resources like coal and developing power plants to utilize cheaper, renewable energy resources like hydel, nuclear, wind and solar energy. Now we will briefly discuss the power generation capacity and power plants in Pakistan.
Major share of electricity in Pakistan is given by thermal and hydel sectors. Other sources include nuclear and renewable sources like solar and tidal energy with little contribution. Fossil fuels are major fuels to run thermal power plants, natural gas comprises 45% of energy mix while imported oil, hydel power, nuclear power contribute 35%, 12% and 2% respectively. Total installation capacity in Pakistan is 20,000 MW. Major contributor is thermal power sector, which contributes 64% of all energy produced. Hydel power is second major, but not a properly exploited energy resource. Its contribution to national grid is about (33%). Tarbela Dam, Ghazi Brotha hydel power project and Mangla dam on river are largest source of hydel energy.
Nuclear power sector is another contributor of electricity to national grid, but it has a minor share. Three nuclear power plants are presently working, KANUPP-I at Karachi and CHASNUPP I and II at Chasma. Smallest contribution of energy comes from renewable sources of energy and this is the factor behind the power crisis engulfing Pakistan.
According to Pakistan energy conference, Energy consumption has risen to almost 80% in Pakistan in the previous 15 years. In late 80 and early 90s total installation capacity was 10800 MW. Robust economic growth in this era resulted in power shortage and a shortfall of 2000 Mw. Power friendly policy was devised in 1994 which added about 600 MW till 2001 via 19 IPPs. The shortage was success fully overcome by power friendly policy and power was also in excess due to declining economic and industrial growth in South Asia.
Later on in post 9/11 era, with start of war on Terror, foreign aid flooded the national economy which generated economic growth. Industrial sector was given due importance. Rapid industrialization and robust economic growth increased power demand, which caused shortfall and its severe impact was started to be felt in 2007.
Domestic sector is major consumer of electricity in our densely populated areas. Economic reforms reduced poverty rate to 10%. As a result of which domestic consumption was raised. According to estimates in fiscal years 2005-06, use of Air conditioners were increased massively and an additional 2250 MW was required to run domestic appliances. This sudden rise in power demands further added to worsening energy crises. Moreover, electricity theft is a major contributor to power crisis in Sub-Continent. Both in large industrial units and domestic sector people manage to get electricity by unlawful means with the help of meter readers.
Rising shortfall clearly depicts that our energy generation capacity is much less than the demand. One of the major reasons is that our energy production is mainly from thermal sector, which require fossil fuels for its preparation. Recent hike in oil prices has worsened our energy crisis. Government is unable to pay high cost of oil to state owned oil companies. As a result of which thermal power stations are working much below than their original capacity due to shortage of oil. Moreover political interference, red-tapism and bureaucratic hurdles have reduced the efficiency of these state owned institutions. Resultantly thermal power sector is working much below its installed capacity.
Hydroelectric power sector is perhaps the most neglected sector. Pakistan has capacity to generate 40000 MW from this sector but only getting 6500 MW due to lack of physical infrastructure. Storage reservoirs in our country are not sufficient to meet power demands. Construction of new reservoirs have been politicized and the most important kala bagh dam is in political limbo since 1980’s. If constructed, it would be able to generate 3600 MW and would have a storage capacity of 6 MAF. Other dams are also facing financial and administrative hurdles in their construction. Due to lack of these storage reservoirs most of the water which can be utilized for power generation and agriculture go unabated to sea. Pakistan utilised about 145 MAF water from Indus river system annually, rest in wasted. Another failure in this important power contributor is mismanagement of existing storage reservoirs.
Non exploitation of natural resources and neglecting the renewable energy resource is perhaps single most important factor worsening power crises of our country. Pakistan has largest coal reservoirs of about 185 in tons, which if utilized have power generating to 400 Billion Barrels of oil. Unfortunately this useful energy source is being neglected and we are utilizing only 6% of it. Increased utilization of natural gas for thermal power generation is rapidly depleting its resource and presently we are facing worst crisis of natural gas. Transport sector is getting badly affected due to this shortage. If these coal reserves are properly utilized and exploited, the depletion of resources of natural gas can be supplemented.
Other unexploited energy resources are renewable resources like solar energy and wind energy. Pakistan in considered to be one of few countries in the world which receive 16hrs sun light on average. According to an estimate we can generate 100,000MW of electricity if solar energy is used. Another major contributor can be tidal energy. Pakistan has one of largest coastal belts in the world, which has potential to generate about 40000 MW.
Rapid population growth and resultantly increase power demand is another cause of energy problem. Rapid population growth of 2.6% is continuously adding to power demand. In order to cover every region, government has to initiate long distance transmission networks so increased financial burdens on power distribution companies and transmission losses due to haphazard distribution system are adding to our power woes. Power shortage resulting from all these reasons has adversely effected our national interest major sectors of national development have been failed and country in facing worst economic crisis of its history. Impacts of this national disaster are summarized in fallowing paragraphs.
Economic sector is badly influenced by power shortage. Our economy is in a mess and we are growing at the rate of 3-4% which is lowest in the region. Our neighbour; china and India are growing at of 10% and 9% respectively.
According to an estimate power crisis is causing a loss of 200 billion annually. Industrial sector is major contributor of economy. It contributes 24% to GDP. But it has almost collapsed due to power crisis. Textile industry in Faisalabad which was once called Manchester of Pakistan is badly affected. Out of 400 major textile units about 150 have been closed. 15000 have stopped working. Industrialists are planning to shift their plants to Bangladesh for favourable business environment. About 400000 labourers have become unemployed. As a result of which unemployment and poverty rates are climbing high.
Poverty is engulfing more and more people and almost 24 percent are living below the poverty line. This in turn has raised street crime rates and is one of causes of extremism and deteriorated law and order situation.
Huge burden of circular debt, subsidizing of power sector by government and hikes in oil prices home resulted in increased inflation rates since last few years in 2007 it was 7.7% and 13.4% in 2011. Energy crisis has also drastically effected our agriculture sector.
Pakistan being agrarian economy depends on agriculture for its GDP. Its share in about 23%, and utilised 42% labour force. Seasonal variations in water availability results in water scarcity which badly impacts agricultural production. So, ground water has to be pumped up with the help of tubewells to meet agricultural needs. Due to power shortage about 150,000 tubewells throughout the country have been closed which has caused a massive decline in agricultural production. It resulted in loss of at least 2-3% of GDP contribution by agriculture sector.
Foreign direct investment has also been badly affected by power shortage. Foreign direct investment is participation of a foreign entities in management, joint venture, exchange of technology and expertise with host country. It is also a measure of foreign ownership of production assets like mines, industries and lands. According to a State Bank report foreign investment has declined from 8.48 Billion in (2006-7) to 1.18 BM in 2011. Despite offering most liberal policies of trade we are failing to attract foreign investors. Major reasons for this decline is terrorism and power shortages.
Political impacts are also a threat to democratic institutions and law and order situations. Violent riots in different areas of country have recently damaged national assets and caused bloodsheds as well. So this menace of power crisis is influencing our national life in many ways. It needs to be handled urgently, otherwise situation can become even worse. Now we will discuss both short-term and long-term measures which can help out of this disaster.
First of all short term measures are necessary to be adopted to overcome the acute power shortage presently. Problem of circular debt can be solved with economic efforts and by effective nationalization of tariff books can be cleaned. This effort will overcome the acute insufficiency due to shortage of crude oil. Distribution and transmission losses are adding to our power shortage. Proper strategies should be adopted and generating units, distribution companies must be provided with adequate measures to overcome these losses.
Stringent legislation and establishment of government writ is mandatory to prevent theft losses. This practice of electricity theft is prevalent in both domestic and industrial units especially Karachi and Hyderabad. It is estimated that 40% of our present power crisis is due to electricity theft. People manage to steal electricity with the help of meter readers and other officials. Therefore it is necessary to curb this crime to avoid long term power shortages.
Existing power structure needs due attention regarding it maintenance. Pull demands of thermal power units can be minimized by proper maintenance of plants. Perhaps one of the most significant measures which can be adopted actually to overcome power crisis are conservation measures in major power utilizing domain.
Domestic sector needs necessary reforms to minimized power utilization. Experts are of opinion that if all the electrical appliances, being used in our houses are according to international standard, then this demand can be minimized efficiently. Reforms in industrial sector are also mandatory by balancing, modernization and replacement (BMR) activity. Power consumption of old industrial units are be decreased. Moreover gas conservation policies should be adopted so that power crisis should not be aggravated by depleting natural gas reserves. By introducing combined heat and power co-generation technology, 30-40% natural gas can be conserved.
Reforms in agriculture sectors can save power as well. By adopting water conservation measures and betterment of irrigation system, consumption of electricity and diesel oil to run tube wells can be minimised.
Transport sector consumes about 28% energy mix. Use of hydrocarbon compounds excessively in transport sector, effects its utilization in other important sectors. Proper and timely tuning of auto mobile engines is necessary to save fuel. Education is an important tool for bringing about any change in the society. Masses’ awareness through media campaign along with active positive role of civil society can be helpful. Conservation measures in domestic and agricultural sector can be achieved through this effort.
These short term measures can be helpful in combating power crisis for the time being. In order to free ourselves from this problem, in the long run, certain measures are necessary to be adopted timely. These are discussed under following paragraphs.
First and foremost solution to this worsening crisis is effective and proper utilization of hydroelectric powers projects. Our storage capacity is much less due to insufficient reservoirs. Reservoirs already present are not being properly managed. Pakistan’s storage capacity of water is much less than other countries. We can store about 30 days our river water while India stores 100-120 days. So construction of new dams is mandatory. Water vision plan 2016 is an important development in this regard.
Under the above said plan, construction of 5 major dams were planned. But construction on only one dam, Diamer Basha dam has been started yet. It has storage capacity of 7.4 MAF and will produce about 4500 MW of hydel power. There is an urgent need to start construction of all major water projects.
Alternative sources of energy can another successful solution to this crisis. As already described Pakistan has largest coal reservoirs which if tapped can produce power equivalent to 400 billion barrels of oil. Renewable energy resources like solar energy and wind energy are successfully being utilized by many countries. India is getting almost 19000 MW from these renewable resources. Pakistan has ideal natural conditions for both solar and tidal power generation. First atomic energy plant in Pakistan has been started with the help of US, but its generation capacity which currently stands at 150 MW should be enhanced.
Pakistan is in dire need of solution of this vital problem. Otherwise economic conditions and other problems arising from power shortage would eventually result in major threat to our existence. Most important aspect to be considered here is that this issue can be easily copped with and solved if those who are at the helm of affairs had taken it seriously. Pakistan is rich in natural resources which can easily get her out of these issue. Need is to exploit them properly with better planning and institutionalization. Both short term and long term solutions discussed in this paper can be utilised to address the energy problem. Only through consistent struggle and proper planning we can save ourselves and upcoming generations from this worsening disaster. Pakistan’s social and economic problems are largely due to energy crisis. Hence due attention must be given to solve this national problem.