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.
