Pakistan Energy Crisis

Pakistan Energy Crisis

Pakistan is energy-deficient. How can one imagine an active and prosperous human being short on blood? Life is hard without sufficient blood running up and down the veins, pumped by the heart round the clock. Pakistan has failed to contain its energy crisis; failing to increase supply proportionately and conserving demand. In 1980s, it met 86% of its demand; come 2000s, situation is getting worse. Explosion in the supply of natural gas gave the nation a breather, sharing burden of electricity and oil, only to make future insecure as gas reserves deplete at fast rate. Fire-fighting on the part of government becomes national strategy, instead of proactive, long-term planning. This has contributed to circular debt problem because of short-sightedness political government.

Let alone increase the supply of energy, situation has worsened due to poor management, operational inefficiencies, power theft, and line losses. This largely sums up the problems country faces in its battle to restore sanity in energy sector, which is now nudging the economy towards disaster, warns latest report of Asian Development Bank.

One of the Major reasons of energy crisis is that we are generating power by thermal instead of hydro power. We planned to go for the hydro power in 1960’s and we did make Tarbla, mangla and warsk dam to generate the energy but somehow we couldn’t continue this trend. In 1994, foreign forces influenced Pakistan to introduce IPP;s in Pakistan which was also called the policy of the decade.

Due to IPP’s our consumption was shifted to the thermal mostly from hydro power and from that we further didn’t focus on the hydro power as such and just playing to and fro with the water plan.

As in Pakistan, water itself becomes a scarce resource and now it is quite obvious that we don’t have enough water to generate electricity, also we will short of water to drink.

Also, in spite of the fact that gas reserves are depleting but still Pakistan is very rich in gas reserves and it just need attention and better policy to use our resources. Sind is full of Gas but law and order situation restrict our investors to opt this option.

Same issue with our coal reserves as Pakistan is rich in coal but no development in producing power from coal as such due to bad policies.

One portion is hitting us very badly is import of fuel for the power generation. As we are not rich in oil and we have to produce the oil. For that many factors are hitting us very badly, one is hike in oil prices, as we were expecting oil prices were never gone up and the other is devaluation of the pak rupee is making our debt risen and risen.

Recommendations

Short-term measures

Coal:

Ramp up coal mining and production, and convert existing thermal power plants to use coal as fuel.

Coal contributes to less than 1% of Pakistan’s generation, even though the Thar mines contain the world’s third-largest coal reserves. By comparison, coal contributes about 40% of total energy generation globally. Even ‘green’ countries like Germany are in the process of installing coal-powered plants. In generating electricity, coal clearly remains the choice of first resort.

Circular debt:

Pakistan has a circular debt in the electricity generation and distribution chain worth $5 billion, simply because the National Electric Power Regulatory Authority has proven ineffective in monitoring generators and utilities. In the West, regulatory commissions are led by energy specialists. Fixed tenures, autonomy from political interference, as well as empowerment to punish generation and distribution companies minimize chances of gaming of the system.

A strong regulator checks and balances; a weak one allows governments to run rampant. They then set tariffs as they see fit, send linemen to collect kickbacks from electricity thieves and give away electricity freebies to vote banks. Utilities go bankrupt, their slate is wiped clean, the debt re-emerges, and round and round we go.

The government must create a cadre of energy specialists who are sent to the West to study regulatory mechanisms. When they return to Pakistan, they must be allowed to set up regulatory commissions that function without fear or favor. Civil service generalists will want to grab the opportunity of overseas junkets, but the government should choose young and idealistic people with little baggage. And it should pay them handsomely: the benefits accrued will far outweigh their salaries.

Power distribution:

Decouple agricultural and consumer supply networks in rural areas from each other, otherwise households benefit unfairly from the less-expensive agricultural tariffs. Gujarat in India has bifurcated the two networks to increase electricity revenues substantively. The model should be easily replicable in Pakistan.

Import of fuel:

The Iran-Pakistan (IP) Gas Pipeline is a no-brainer. Sure, the US will exert political and economic pressure, but what if one of these days the international community reaches an accord with Iran? Won’t the policymakers in Pakistan then have egg on their face if they ditch the IP now? Other than the US’ interests, India too frets over the security situation in Baluchistan. But if Pakistan’s establishment can secure the country’s nuclear arsenal, surely it can protect another critical asset.

The IP pipeline becoming the Iran-Pakistan-India-Bangladesh pipeline would be a boon for the entire region. Natural gas, which has extensive use in power generation, transportation and manufacturing, can also be imported from abroad. The Indian ambassador to the US recently urged America, which is sitting on a glut of natural gas, to allow its export. In case America agrees, Pakistan should also be ready to benefit from the decision.

Long-term measures

Shale gas:

Shale gas is a form of natural gas that is obtained from sedimentary rock through a process called hydraulic fracturing. The US is witnessing a boom in shale gas production, and Pakistan too has substantial proven shale gas deposits. The technology is field-tested and easily acquired; there is no reason to delay shale gas exploration.

Hydro Power:

We recommend going for the hydro power and making dams as reservoirs of the water which will help in multiple uses. Mostly for the power generation. Also, we recommend for the small dams rather than go for the big dams as small dams take short time to prepare and will commence soon.