Energy Crisis: Immediate Attention Needed!

By Yasmeen Ali

PowerIn Pakistan, depending on your place of residing, there is no electricity from six to twenty hours a day. Whereas it has hit hard the lives of the common man, making it impossible to function on a day to day basis, it has also brought down production in industrial sectors drastically, costing contracts and jobs of millions across the country.

If we look at the issue- two reasons emerge. First the demand is far greater than the supply. Pakistan is just not producing enough of it to go around. Second, the government is failing in paying dues to power generation companies thus giving rise to the phenomenon of “circular debt.” This is basically piling up of government dues outstanding to the power supplying units thereby disabling them from covering their overheads and producing /importing power. Once this debt is paid off, the IPP’s can pay off their petroleum import expenses and start producing at optimum levels. The IPP’s at current are responsible to provide electricity to half of our country. As the Govt. did not pay their debt so now they are charging or demanding higher per unit prices from the consumers. This hike in electricity prices is affecting not only our local industries and homes but is also affecting our exports of manufacturing goods. The govt. must intervene and pay out the circular debt. Or provide subsidy on electricity.

Most of the systems here run on either Gas or Coal i-e they are thermal systems. Both Gas and Coal are considered as scarce and expensive commodities for electricity producers. We lack high quality lower end grids that are used to carry electricity from power houses to the ultimate consumers via grid stations. The infrastructure is old and deteriorated. The system is unable to sustain extreme weather conditions hence most of the grids shut down at extreme temperature or either completely stops working. WAPDA is facing huge line losses due to electricity theft or illegal usage of electricity.

Then also, we face the very real problem of foreign investor being shy to invest big bucks in Pakistan owing to the socio-political-corrupt system.

There will be no honeymoon period for the Nawaz Sharif Government. The test of his government will be to provide immediate relief to the people. Nawaz Sharif needs to put together some sharp plans to address this pressing issue. Short term ones must be married to long term goals.

Some short term steps to address the situation are: Line Losses & reasons must be look into & steps taken to correct the same, Incoming government MUST look into discrimination of electricity distribution. Why is Punjab (more particularly) and in particular Lahore, Faisalabad & some other cities facing power outrages for 16  hours a day? Whereas this is reportedly not happening to this degree in other provinces. Upgrade Grid Stations, govt. must convert inefficient gas plants to efficient ones in order to conserve electric energy. In areas where over 80% of bills are being paid must not suffer power outrages as sharply as in areas where they are not. This will not only encourage timely payment of bills but will also be seen as being in the spirit of fairness.

Long term solution requires focused attention. Pakistan cannot sustain flawed judgment in taking of a final decision in this regard. It is exorbitantly expense neigh impossible to convert present energy giving units into one with different source of energy production. It will require virtual revamping of the entire existing set ups. However, Govt should look into the possibility of setting up Energy Units with LNG. I am told this is cheaper in terms of setting up & operational costs. LNG is cheap (comparatively).Very cheap. Qatar is the biggest producer/exporter for LNG. Qatar can export gas in liquefied form anywhere in the world and focus on the places where the state earns the most income for the gas. The idea at first was to ship LNG by boat to the US, which was supposed to help meet the demand of hungry Americans, but the continuously low natural gas prices in the US mean that it is more profitable for Qatar to supply its gas elsewhere, e.g. the United Kingdom, India, Japan and other countries in south-eastern Asia and Europe. Demand for Qatar’s liquid gas increased immediately in Japan after the earthquake on March 18 – supplying gas over such a distance through a system of pipelines would be practically impossible, especially when there is more than just dry land between the two locations. In addition to these distant places, some neighbors of Qatar have also shown an interest in buying gas from the country, especially Bahrain, Dubai and Abu Dhabi. Four of the six GCC countries – Saudi Arabia, Bahrain, Kuwait and the United Arab Emirates – are importers of natural gas and only two are exporters – Qatar and Oman. As the gas exports of Oman are ca 10% of the gas exports of Qatar, there is no doubt that Qatar is the most influential supplier of natural gas in the region. There is no reason to fear that Qatar will run out of gas any time soon. The country has the third-largest natural gas deposits after Iran and Russia – Qatar owns 14% of the total gas reserves of the world. Qatar has enough gas for more than 200 years at current production quantities.

The incursion of foreign investment will depend on a conducive atmosphere directly linked to political & social stability of the country. Corruption must be checked to encourage it-with incentives.

Nawaz Sharif will be well advised to review and down size the massive increase of Rs 5.82 per unit price of electricity by the caretaker government. This step is being termed as facilitation for incoming dispensation. In a situation where due to unavailability of gas & electricity the business community is struggling to do business, common man struggling to manage expenses, the step is seen in direction of lowering Nawaz Sharif government popularity even before being sworn to office!

The writer is a lawyer & Author of a Media Book .Her twitter handle is @yasmeen_9

 

 

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Comments

  • a m malik  On May 20, 2013 at 7:35 am

    Altaf is a farce. He is as dangerous to his own people as to the others. But is patronized by US and now MI 6. He had to be kept in UK because US did not allow dual nationality then. Purpose must have been primarily that he could then meddle in Pakistan in every conceivable way. The riots that broke out immediately after BB’s death were reportedly instigated by MI 6. And here we have on record the threats by Altaf but HE Adam HC of UK still has not been able to understand whether or not Altaf did give those threats.
    am

  • Najma  On May 20, 2013 at 1:18 pm

    Very good ! Thank you. Maybe you can convert it into powerpoint and add lots of pretty (but relevant) pictures to send to NS and other non-technocratic decision-makers. That’s what a multinational head used to do every time he went to talk to a concerned minister or other head honcho !

  • Shamim Shah  On May 20, 2013 at 1:19 pm

    Dear Madam,
    You have in our article mainly proposed LNG from Qatar. This may be feasible option , but I would like to draw your attention to Thar Coal Project which was spearheaded by Dr Samar Mubarakband. Unfortunately it ran into snags not due to technical but due to political reasons. I am sure it is high time we should learn a lesson and be honest in our approach. Our loyalty would take us out of energy crisis.
    Regards
    Shamim

    Sent from my iPad

  • Yasmeen Ali  On May 20, 2013 at 1:32 pm

    The Planning Commission had termed the Thar Coal project unfeasible. The national nuclear scientist Dr Samar Mubarakmand had failed to produce gas through Thar coal reserves. The gas flamed for four hours only and then dropped off .In 1991 the large deposits of Thar coal were discovered. The discovery sparked widespread interest and for further exploration. The Geological Survey of Pakistan also verified enormous coal deposits of coal, which were confirmed by the United States Agency for International Development as well. This discovery put Pakistan amongst the list of most energy resourced countries in the world. Thar Desert contains the largest coal reserves discovered to date, covering an area of 10,000 square kilometers. Planning Commission had concluded audit of the project and stopped release of funds for it on the grounds that we think it unfeasible. It’s not possible to produce 10 megawatt electricity from the Thar Coal.
    The Controversial nuclear scientist Dr Abdul Qadeer Khan has said that the nation is being misguided about power generation through Thar Coal.Projects like Thar Coal and Reko Diq require investment of millions of dollars and state of the art equipment and technology.
    For exact details of the project, the following link is suggested: http://www.pakboi.gov.pk/index.php?option=com_content&view=article&id=488%3Athar-coal-detail&catid=939&Itemid=502

  • Khan Zia  On May 20, 2013 at 3:30 pm

    Once a nation acquires nuclear capability it becomes more or less impervious to any kind of military action, pressure or blackmail. Given the existing geo-political situation it is unacceptable to the powers that be that a Muslim country should have such capability. The only recourse left open for them is to destroy her economy, in particular agriculture, to an extent that it cannot even feed its people. This will be the time to make the offer of an exchange that will be hard to refuse.

    The water and power crisis that has been created in Pakistan has to be seen in this light. We have been prevented from becoming independent not only for our energy supplies but also taking action to replace ever decreasing water storage. It is above all a grave national security issue. What is surprising is that it developed at a time when the country was under military rule and even today one does not hear of the military asserting itself, knowing the perilous security implications that are inherent in the issue.

  • Anil Madan  On May 20, 2013 at 4:26 pm

    The issue is of a very technical nature and is handled by non technical people. “Round pegs in square holes.”
    Sunday edition of News International carried an article by Mr Masood Hassan in which he blamed the Govt Deptts for accumalation of “Circular Debit.” Non payments of bills to DISCOS.
    Ask the PEPCO ( Ex Chief Mr Basharrat Chemma) and he will put the blame that our mix of energy generation is more on Oil and less on water which takes long to construct but cheaper in the long run thus our cost of production of electricity is higher ( was around Rs 14 on average) and we sold it at Rs 8 on average. Thus we accumalate Circular Debit.
    Ask an industrial unit owner or LCC&I or FCC&I and they will blame “Line Losses” as the culprit.
    Ask the Transparency International Pakistan and they will blame the Govt who do not provide oil or funds to IPPs and still pay “Captive Power Rates” to the IPPs as this was stipulated in the contracts initially thus the consumer in a way is paying for power which was never produced by the IPPs but have to be paid for “Captive Power Rates.
    One can go on and on but the bottom line is that we told the world that we were acquiring nuclear energy to solve our energy crisis and what we did with that is known to all. If we lay foundations on lies we should expect strong buildings. Very foolish or very strange- take your pick. We cannot sow neem trees and expect at maturity to have mangoes growing from that tree. ( Used the mango tree as an example as I can see my mango tree which my late brother had planted 35 years).
    Common man like me is confused whom to believe or just wait for the action of Almighty to take him away and rid him of this misery.

    With regards and best wishes,
    Anil Madan.

  • Gen. Satti  On May 21, 2013 at 10:56 am

    Dear All,
    Knowing fully well the gravity of power and energy shortage ,its adverse effects on our industry,economy ,agriculture and every day life of people, to say that its a high priority issue is a grave understatement .Having said that ,how much we all understand(our leadership included)the real reasons of this shortfall let alone having a strategy or comprehensive and workable plan to meet this challenge is reflected in the diversity of our opinions and views.The blame game by political leaders for their own mileage,the corruption scandals,the role and interests of our foreign friends and now our two lead nuclear scientists publicaly shooting down each others understanding of power generation using Thar coal deposits (their animosity over who is the Real Father of our Bomb is widely known)all speak of where we might be headed unless we rise above all this.
    In my humble opinion we are dealing with this crisis too like we have been handling our Kashmir Policy,Kalabagh Dam,IPGPL project,Gawadar Port.War against terrorism and Extremism and our Education Policy.We have worked on whims,personal preferences,vested interests ,score settling and at times preferring Foreign interests above Pakistans interests.I am not into moralistic lecturing but indicating our basic direction less and short sighted short/medium and long term approach at problem solving.We do not necessarily lack the requisite knowledge and expertise(where required. due to insufficiency it can be borrowed and hired too)to formulate a strategy to overcome this crisis .The basic requirement is to pool our collective wisdom to rise above our personal interests and biases to formulate a Comprehensive National Power and Energy Strategy .Our solutions must rise above political lines for allocation of priority, resources and continuous consistent policy regardless of the party in power .Our leadership also needs to desist from making misleading tall claims of eradication of shortfall in one/two or three years because it leads to false hopes and eventual dismay.We are more than late and our leadership needs to tackle this issue with a comprehensive understanding and strategy otherwise our power generation system may God forbid actually give way and that will be a gigantic disaster.A comprehensive,well directed and purposeful National debate at various tiers with a definite time line to be followed to culminate into tangible, and practicable options to chose from by the National leadership could be worth serious consideration and adoption instead of half baked inputs and solutions that we see floating around and being advocated at various forums and by noble intentioned as well as interested parties definitely lacking an all round professional input and consideration.
    Regards.
    Satti.
    Sent from my BlackBerry® Smartphone provided by Ufone

  • a m malik  On May 21, 2013 at 3:05 pm

    Kalabagh is the primary solution followed by Thar coal even though of low quality. Not the LPG as is being suggested by the same mafia which had planned abinitio to replace the entire CNG tpt with LPG and lPG stns to be owned by AAZ. 99% of buses in Karachi use CNG.
    Qatar was extremely keen a decade and a half ago to provide gas from its North dhome reserves – and as usual we kept dragging our feet and instead the corruption got us into the IPPs. The IPPs broke the back of the profit earning WAPDA who had then to foot for the IPPs. That is past. Sindh and KPK are politically and emotionally against KBD. Reason – Sindh in particular does not trust Punjab apprehending that the water will be “stolen”. This is because of the past bitter experience where an out fall made for excess flood waters started being used for regular irrigation by Punjab. Should this be the case then I would suggest that:
    a. Let the chairman and who ever matters in water distribution/control be appointed from Sindh on a permanent basis for atleast the next thirty years through a constitutional amendment. This cannot be delayed any further.
    b. If the allegation of water being stolen is correct, then it would be in the fitness of things that Punjab must apologize for its indiscreet behavior.
    b. I for- see that if making of KBD may cause a dent to the federation – by not making and with further shortfall of water and electricity(we cannot sustain thermals for any further length of time) may also cause even a severer dent to the federation.

    Enemy has played its cards well in arousing the emotions Heads I win Tails u lose.

    am

  • a m malik  On May 21, 2013 at 3:09 pm

    As a tail end I feel there are some economic- hit man of foreign agencies working in Pakistan where all profit industrial enterprises especially the export oriented have been razed to ground through fires.
    am

  • Sajjad Muneer  On May 21, 2013 at 6:18 pm

    Time we stopped messing around:

    GO FOR KALABAGH UNAFRAID OFTHE “POLITICAL FALLOUTS”
    GO FOR DASU, TARBELA 4.
    GO FOR FUEL CONVERSION TO COAL .
    ENSURE REVERSION TO 70:30 TRADITIONAL MIX (HYDRO:THERMAL)
    PAY THE EXISTING IPP’s IN THE INTERIM – YOU HAVE NO CHOICE IN THE MATTER.
    INSTITUTIONAL CHANGES AS SUGGESTED BY MUNNAWAR B AHMED.
    LNG IMPORT.
    IRAN-PAKISTAN GAS PIPELINE.
    GET REAL EXPERTS AT THE HELM>

    Sajjad Muneer

  • Khan Zia  On May 21, 2013 at 6:18 pm

    Precisely. You have summed it up perfectly. Playing politics with energy has brought upon us the crises we are facing today. It is going to get progressively worse. To avert complete disaster we have to stop procrastinating and dithering. This applies equally to power generation as well as replacement of lost water storage capacity due to silting of the existing reservoirs. Tinkering is not the answer. It is a life-and-death issue. Bold urgent steps are needed if there is to be a future.

  • Naveed Tajammal  On May 21, 2013 at 6:19 pm

    The state should nationalize all ipp’s it is a cartel ,check the list of the private owners,and when was the last time repair and maintenance,was done of the generators,the efficiency of most is down to pittance yet they charge for full capacity.
    unless the mafia is not handled no measures can work.

    Naveed Tajammal,

  • Shameel Siraj Khan  On May 22, 2013 at 2:49 am

    there’s one factor which is often missed out; that of theft… i can tell you from the KP perspective that there is considerable electricity theft & its across the board, not just the poor [who in some cases can be justified ] ..& believe it or not to some degree the theft is encouraged by the WAPDA staff themselves ! its an issue that has to be addressed before we can move forward

  • Najeeb  On May 22, 2013 at 2:50 am

    if they stop the “kunda”.. a vast number of people wont be able to pay their electric bills due to their poverty… they will be deprived of electricity…the high cost per kilowatt hour, owing to expensive power generation projects etc…. @Zuha Saeed same argument and figures .. 5 US cents per kilowatt hour and a Per Capita income in Pakistan of less than USD 1000.- per anum… makes it too heavy a bill for the common of mortals in Pakistan.. in France KWH cost is average around 12 US cents but per capita income is around 20.000 $… the poor Pakistani citizen is crushed by the energy prices… I wont enter into how and why such expensive power projects were contracted for…

  • Shameel Siraj Khan  On May 22, 2013 at 2:51 am

    very true najeeb which is why i mentioned that inextreme poverty it can be justified..the question however is how do you deal with people who can afford not one but plenty of Air Conditions yet complain of heavy bills & hence resort to theft.. the wealthy are very much to blame for using excess yet not paying [mpa’s mna’s, ministers, governors, the president and might i add the ghq are not strangers to this, they either not pay or simply delay the payment of their bills for years on end]

  • Zuha Saeed  On May 22, 2013 at 2:51 am

    sirs,issue is very simple..we do hv d installed capacity,we do hv d adequate system of producing n monitoring d elec..we do hv bulk of population paying their bills regularly..but wat we do not have is d INTENT of a true leader to provide relief to d common man..d day they feel our pinch d money will flow from BB income support prog,zakat ushr committee,subsidies,sustainable dev fund,PM N PRES pers fund into d big vaccum called d CIRCULAR DEBT..if d problem can not be eradicated from its roots,ican can be reduced to under 50 percent OVER NIGHT..it is just a matter of ONE iron hand n right priorities..

  • Najeeb  On May 22, 2013 at 2:54 am

    there was a time not long ago in Mush’s days when the Wapda used to hang tough and refuse any project whose per KWH cost to the consumer exceeded 3 US cents… all in…this is one of the reasons there was no major energy generation project in the country during Mush’s years in power…. but they were of course, unreasonable, the big consortiums held their ground too and the result was before us … the PPP civilian government contracted at prices that as i understand it hover around 7 cents per KWH… and introduced the rental floating power-house gimmicks etc…. Shrek & Co have to do better… but they wont be able to avoid hiking the per KWH price of electricity…because the costs of all on-going projects have increased and the new ones are incredibly costly… Good luck Shrek.!

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