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To Overcome This Crisis The Ministry of Industries & Production Should Strongly Advocate The Following
To Overcome This Crisis The Ministry of Industries & Production Should Strongly Advocate The Following
The ongoing energy crisis has crippled Pakistan’s industry and economy.
A
conservative estimate puts the loss to industry at 13% of total
manufacturing sales
or nearly Rs. 130 billion per annum. The energy crisis is hitting the
industry at
multiple levels: energy tariff increases are forcing businesses with low
margins and
those who are unable to generate their own power (e.g., SMEs) to close
down;
unannounced load-shedding and voltage fluctuations damage machinery
worth
millions of dollars; unavailability of electricity harms productivity of
workforce.
With an abundance of two of the cheapest sources of energy in the
country, there is
no reason why Pakistan should not be able to overcome this crisis soon.
To overcome this crisis The Ministry of Industries & Production should
strongly
advocate the following:
• As long as power shortfall remains, load needs to be managed carefully.
Areas
with a heavy presence of industry, both large-scale and SMEs, should be
given
the status of industrial corridors. These corridors could be given separate
feeders, where load shedding will only occur when absolutely necessary2.
This
needs to be finalized in consultation with PEPCO so that the present
suboptimal matching of grid stations and 11kv feeders can also be
addressed.
Load-shedding schedules for such units need to be announced at least 2
months
in advance and load shedding days should be clustered for both electricity
and
gas. No such priority should be given to industry that is based in
residential
areas.
• Conduct sector-wide energy audits, initiating the programme from
heavy load
industries. Based on the recommendations of the audit, provide incentives
to
the industry to shift toward more energy efficient production methods and
technology.
• In the industrial corridors, peak-load pricing schedules should be
announced.
2 This point is also addressed in the section on Industrial Estates and other special economic zones.
12
• In the medium to long-run, we strongly propose a shift in energy mix.
This may
be helped by developing localized, cheaper machinery for hydel, thermal
and
coal-based power plants. For this purpose, the interaction of
manufacturers and
power producers, including WAPDA needs to be facilitated to develop
machinery best suited to Pakistan’s needs.
• In special economic zones, science park and industrial estates, captive
power
generation should be allowed.
• At the same time, steps should be taken to facilitate the local
development of
wind turbines and solar energy technology. For this purpose, two pilot
research
projects should be initiated bringing together universities, industry,
foreign and
local experts and relevant government departments.
D. Upgrading Logistical Infrastructure
An efficient and well integrated transport system is integral to the growth
and
development of the industry as it creates access to markets, reduces the
costs of
production and increases the competitiveness of firms. In Pakistan,
however, the
transport systems suffer from insufficient investments, poor management
and a lack
of essential maintenance. The low reliability and high costs of the
transport sector
hinders Pakistan’s economic growth by reducing the productivity of its
industry and
competitiveness of its exports. The cost of transport system inefficiencies
has been
estimated at about 4%-6% of the GDP.
In order to increase the efficiency of logistics in the country, The
Ministry of Industries
& Production should strongly advocate the following measures:
ROADS & TRUCKING
• In partnership with the private sector international standard Logistical
Parks
near industrial areas, agricultural hubs, and ports need to be setup. For
this
purpose, land needs to be provided, and government should invite
local/foreign
investors to develop facilities for storage, loading-unloading facilities, and
rest
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areas. Dry ports should be established within or adjacent to these
logistical
parks.
• Vehicle quality testing stations and Radio Frequency Identification
(RFID)
based tracking facility should be established within the logistical parks.
• A roads commission should be set up to develop the overall strategy for
roads
giving priority to areas with relatively low connectivity. It would include in
its
purview connecting roads to major industrial estates, railways and border
points
as well as connectivity with Baluchistan and tribal areas.
• The government should standardize and provide technical advice,
licensing and
registration of trailers.
• The government should ensure the creation of cold storage facilities
near
agricultural hubs and expedite the creation of cold chains from agro-
based
clusters to Karachi.
RAILWAYS
• The condition and performance of Pakistan Railways needs to be
improved
significantly. New investment is required in the Railway Freight Service
and new
tracks need to be laid in order to support transportation within the
country.
• It is proposed to increase the share of national railway in national freight
from
the current 4% to 22% by 2030 as proposed in Vision 2030.
PORTS
• Pakistan Automated Customs Clearance System should be maintained
and the
software issues need to be solved immediately.
• The government needs to facilitate the private sector to invest in bulk
handling
port facility. This could be done through public-private partnerships by
following the ‘landlord concept’ employed successfully in the Karachi Port
Terminal.
• The government should facilitate the establishment of silos at Karachi
port for
the storage of commodities such as coal and cement.
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The Case of Gawadar:
Gawadar is located in Baluchistan whose strategic location needs to be
exploited. It is east of Iran, south of Afghanistan, and boasts a sea port
almost at
the mouth of the Strait of Hormuz. Gawadar is an essential node in the
Iran-
Pakistan-India pipeline, which could cross from Iranian to Pakistani
Balochistan. At the same time, Gawadar is of enormous strategic
importance to
China, Afghanistan, Iran and Central Asia. However, the development and
usage of the Gawadar Port has stalled as a consequence of a myriad of
issues
ranging from lack of infrastructure investment by the government,
prohibitively
high cost of transportation, security issues, absence of any significant
industry in
Baluchistan, and foreign interests which feel threatened by this
development.
Accordingly, the following policy recommendations are given:
• Scrap the deal with PSA and seek assistance from China in developing
the port.
• Urgently complete road works linking Gawadar to upcountry.
Currently, transporters have to go through Sukkur.
• Incentivize China and/or UAE to build oil refineries near the port.
• Seek Chinese assistance in building a rail link between Gawadar and
northern parts of the country.
E.Promotion of Knowledge-based
Industries
through a Full-Scale Science Park
A cornerstone of this industrial policy is the establishment of a science
park in Pakistan.
The proposed science park will have formal operational links with one or
more
universities, research centers, or other institutions of higher education. It
will be
designed to encourage the formation and growth of knowledge- based
industries. It will
have all the infrastructure required to attract professionals, consultants
and managers
and will house organizations ranging from R&D to manufacturing,
marketing and
branding. In short, the objectives of the establishment of a science &
technology park
in Pakistan are the promotion of technology commercialization, transfer
and diffusion
15
by fostering links between Industry and universities, R&D labs, and
promoting the
formation and growth of knowledge-based companies.
A science park fulfils several purposes that are critical to the success of
the 2010
industrial policy. Most importantly, it enjoys the status of an R&D
establishment,
which means it sidesteps the same WTO regulations that prohibit any
subsidies to local
organizations. Local organizations can be encouraged to indigenize
through collective
government sponsored R&D and build brands within a science park.
Second, a science park captures the entire product cycle, rather than just
focusing on
manufacturing. It provides incubators for scientific innovations as well as
a production
center for cutting-edge products. Universities will be playing a very strong
role in the
emergence of the proposed science park and will be required to supply
trained human
resource and a knowledge base for industrial innovation.
Third, a science park provides economies of scale and scope with respect
to common
infrastructure facilities (such as transport, power, information and
communication
technology connectivity, office and production space, and waste
treatment) and
technical services (such as recruitment, training, mentoring, financing,
networking, and
legal and IPR consulting).
Finally, through delegation of powers to the science park level, various
ministries and
government bodies can achieve coordination, a goal that otherwise
remains difficult to
achieve.
The aim is to create an environment where knowledge-based industries
can thrive and
the required professionals can reside with their families. We envisage the
park project
to be 6-year long with approximately US $500 million required in startup
costs. The
total area for the park will be about 200 hectares. The project will be
executed in 3
phases. Phase 1 will include the survey of different sites in Pakistan for
the park and the
selection of the most suitable site. The 2nd phase will include building the
infrastructure
as well as building and recruiting park clients. The last phase will include
facilitating the
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investment environment for the clients and building bridges between
different
universities of Pakistan, R&D institutes and park clients.
The government of Pakistan will incentivize the investment
environment in the
science park through the following measures:
• Absorb initial startup costs for the science park
• Provide infrastructure of the park including amenities
• Establish venture capital funding for startups
• Provide five year tax holiday
• Ensure industrial laws and regulations simplification
• Ensure delegation of power from several other government agencies to
park
administration for ‘one stop operation’
• Pass special commerce and tax laws for science park operation
• Ensure cooperation programs among universities, research institutes
and park
clients
• Provide transparent, competitive R&D grants
Development of Industrial Estates,
Special
Economic Zones, Export Promotion
Zones
The following is proposed in this respect:
• To promote the growth of existing and resource-based industries the
government should create industrial estates and agro processing zones at
the
identified ‘hot spots’ of economic activity. This should be done while
preserving
agricultural lands and observing municipal zoning laws.
• The government should develop these estates through the provision of
necessary soft and hard infrastructure and world class logistic facilities.
• The government should facilitate estates and zones in:
o Accessing appropriate technology.
o Obtaining information about modern methods of production.
o Improving quality standards such as phyto-sanitary measures for
agriculture processing.
o Product branding and up gradation.
o Accessing international markets.
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• This should be done by creating linkages with universities, research
centres
available locally and internationally, and by creation of centres of
excellence.
• Captive power generation should be permitted at the estate level.
• Effluent Treatment Plants and Solid Waste dumping sites should be
established
in all industrial estates. Incentives such as tax break should be provided
for local
construction/fabrication of effluent treatment plants.
• With falling duties, the attraction of EPZs (where imports are duty free)
has
fallen dramatically. EPZ such as the one in Gujranwala should be turned
into
an industrial zone.
• The government should rationalize its existing portfolio of industrial
estates.
The failed estates or SEZs (e.g., Gadoon) need to be liquidated and
lessons
learned from their failures. Sukkur Small Industrial Estate should be
developed.
• Business incubators for SMEs should be set up to reduce costs for
business startups.
. What Constitutes an Energy Crisis?
Energy crisis is a situation in which the nation suffers from a disruption of energy
supplies (in our case, oil) accompanied by rapidly increasing energy prices that threaten
economic and national security. The threat to economic security is represented by the
possibility of declining economic growth, increasing inflation, rising unemployment, and
losing billions of dollars in investment. The threat to national security is represented by
the inability of the US government to exercise various foreign policy options, especially
in regard to countries with substantial oil reserves. For example, the recent disruption of
Venezuelan oil supplies may limit the US policy options toward Iraq.
Looking at the two energy crises of 1973 and 1979, we find some common elements
between the two. Both events:
The same indicators and warning signs that existed prior to the energy crises of
1973 and 1979 exist today: a political crisis in Venezuela that halted most of the
Venezuelan oil exports, the threat of war with Iraq, stocks at their lowest level in twenty
six years, imports nearly record high, more concentrated imports than ever, and low
upstream expenditures. However, the current problem is even worse than the previous
two energy crises because, unlike the 1970s, we are starting from a case of low economic
growth. The massive stimulus package that is planned by the Bush administration could
exacerbate the situation by increasing the demand for oil.
Some experts argued in 2000 that the US was heading for an energy crisis at that time.
Although the crisis did not happen because not all the warning signs existed at that time,
the current situation is much worse because US production is lower, import dependency
and import concentration are higher, and world excess capacity is lower and matches that
of the 1973 crisis.
. Measures of Energy Security
There are five principal measures in evaluating petroleum security from a national
perspective: domestic production capacity, dependence on imports, the degree of import
concentration, petroleum inventory relative to imports, and the ability to second source
petroleum imports in the event of an interruption from one or more suppliers.
US oil production is currently at a record low and has been steadily declining since 1986
as shown in Figure (1). Although the US oil production reached its peak in the 1970s, the
increased production in the second half of the 1970s came in large part from Alaska.
Production from Prudhoe Bay came on line in significant volumes causing Alaskan
production to increase from 464,000 barrels per day (b/d) in 1978 to 1.6 million in 1980
and peaked at 2 million b/d in 1988.
Petroleum production in the lower 48 states dropped from 9.0 million b/d in 1973 to 7.5
million b/d in 1978. Only the development of oil in Alaska prevented an even higher
dependency. By 1980 the production decline halted and there were very modest gains that
extended through 1985. The US domestic oil industry experienced a greater rate of price
increase than the rest of the world as domestic prices were deregulated.
The collapse of oil prices in 1986 wiped out many of the stripper wells, especially in
Texas, Oklahoma, Louisiana, and Colorado. The US lost 1 million b/d in production
between 1986 and 1989. The aftermath of the Kuwait invasion raised oil prices and
halted the declining trend temporarily until 1992. The US oil production suffered another
major setback in 1998 and early 1999 when world oil prices approached $10 b/d.
However, higher oil prices since 1999 led to relatively stable US petroleum production of
approximately 5.7 million b/d, about 60% of the US production in 1973.
Figure (1)
US Oil Production (Thousands b/d) Vs. Nominal Oil Prices
US oil production has been steadily declining since 1986
Growth
The growth in manufacturing sector of Pakistan had been steadily declining for the
last three years, as it is fell to 8.48 percent in 2007-08 from 8.8 percent in 2006-07 and 19
.9 percent in 2004-05 (Source: Economic Survey of Pakistan). The falling trend in the
industrial output is mainly due to capacity constraint and shutdown of many industrial
units, because of high cost of doing business. World Bank (February 2008) points out in
the report that Pakistan suffers from the lack of infrastructure facilities in the water,
irrigation, power and transport sectors. In the energy sector, the country will face sever
shortage of around 6000 megawatt by 2010. Similarly inefficiencies in transport sector
cost the economy between 4-5 percent of GDP each year. The major reason of current
slowdown in manufacturing output is said to be frequent power outages due to low
electricity production. The ongoing energy shortages caused by an ageing energy
infrastructure, chronic under investment in expansion and maintenance and unsustainable
pricing regimes slow industrial output. Apart from infrastructure and capacity constraint
issues manufacturing sector would further slow down in the days to come because of fast
depreciating value of rupee against dollar, which would made imported raw material
more costly.
Energy is the most problematic issue in the world. Demand of energy from the emerging
markets like China and India growing day by day. Pakistan with small manufacturing
market surrounded by major emerging markets like China, India, Malaysia, Indonesia,
Philippines and Bangladesh, will be worst effected by rise in energy prices. Pakistan with
official figures of 8 percent growth rate will have a definite rise on demand of energy for
minimum 3 percent. As a rule of thumb modern day manufacturing industries utilize
atleast 33 percent production cost in terms of energy prices. Any increase in energy cost
will effect the production cost and force the manufacturers that either to reduce the labor
cost or to remain competitive in market by improving the quality standards. Major giants
like China and India will sustain with this situation but smaller economies like Pakistan
will suffer badly.
All predictions now failing as the oil prices reached its maximum ever at around $150 per
barrel. The reason has been given for this enormous rise is the US oil reserves are
depleting and therefore customers are ready to purchase the oil at any price available. In
USA the Gulf of Mexico is famous for oil producing and refining facilities. The
prosperity of Houston is only due to oil industry being flourished. However the weather
is not so kind in this area and hurricanes and tornados commonly hit the southern part of
USA and Caribbean. Volatility of oil market is such, that just news of one hurricane
developing in Caribbean shoots the oil prices in the world. A few years before oil was
being trade on $20 per barrel and no body ever thought that the weather conditions in the
Gulf can effect the oil market. The future prospects are not very encouraging. Emerging
and developing economies like Pakistan will suffer most. Those industries which
consume more energy will suffer with maximum. It will lead to rise of inflation, shutting
down industries and rising unemployment in the third world countries.
Pakistan’s economy is already under intense pressure due to the competitors like China
and India giving cut throat flight, at the other end it has continuous problem on its
western boarders draining its resources. Pakistan exports and all its economic activities
are dependent on uninterrupted energy supplies. For its energy requirement, maximum
share is still of furnace, which imported from Middle East countries. Already many
industrial units closed down due to higher production costs which make it uneconomical.
Further increase in oil prices will defiantly bring more strain on existing working units.
On famous oil embargo days a lot of research in Europe was carried out to find the
alternate source of energy. The findings are available even in college books. However
with the drop of oil prices such alternatives were uneconomical and therefore shelved.
This is the time that Pakistan now asses very carefully that in case of rising oil prices
what actions it should take to conserve energy and to find the alternate source of energy.
A volunteer option for all energy users is to conserve energy, to make the plants more
efficient and to see that each drop of energy is saved. If we make serious study on this
subject then we may achieve up to 20% saving in energy, hence saving in our production
cost and making our products more attractive in international market. Of course the
energy conservation programs cost money. However the investment will be rewarding
and will be beneficial in long terms.
Pakistan’s thermal units are day by day become aging, reducing their output power. A
liberal and progressive policy with less bureaucratic approach towards energy producing
units will help and bring attractive investment in power sector. Water conservation
projects, focusing on the paving of watercourses to prevent 40 percent of irrigation water
that is lost due to seepage, have also become imperative. Coal-based power generation
may be one option given the country's huge coal deposits in Southern Sindh Province.
Development of renewable energy resources is not moving ahead beyond symposiums
and conferences. Pakistan’s industrial sector is at stake if sustainable cheap energy
resources are not developed on priority. Energy efficient plants and machines are the
recipe for our survival.
Growth Performance of Components of Gross National Product
The major export earnings come from textiles. The country has not been able to
expand its exports in other sections due to which it has to suffered shifts in world
demand. The government continues with its efforts to diversify the country’s
industrial base so as to expand its exports. However, total exports fell from
$21.09 billion in 2008 to $17.87 billion 2009. The total imports also reduced from
$38.19 billion in 2008 to $28.31 billion in 2009.
Pakistan Exports Commodities
The following graph depicts Pakistan’s export partners with percentage share as
of 2008:
• Petroleum
• Petroleum products
• Machinery
• Plastics
• Transportation equipment
• Edible oils
• Paper and paperboard
• Iron and steel
• Tea
The following graph depicts Pakistan’s import partners with percentage share as
of 2008:
for 24% of the country’s GDP. Wholesale and retail trade has 30% share in the
GDP. With increase in the country’s software exports, the IT industry is emerging
as a flourishing service industry. Despite union unrest, the Pakistani government
is actively engaged in privatization of banking, telecommunications and utilities to
produce more jobs in the country.
Solution
Coal power plant a viable solution to
Pakistan’s energy crisis
Pakistan’s economic development and prosperity depend on how successfully
the country ensures abundant supply of reliable and affordable energy. If the energy
problem is not tackled effectively, the population’s sufferings will increase
Since ancient times use of energy has served as an integral part of human life and their
prosperity. As population was increasing, the demand for energy was also expanding. It
was the discovery of electricity and extensive use of fossil fuel that led to the industrial
revolution and that steered advancement of science and technology, culminating in
enhanced level of socio-economic prosperity, better living conditions, better health and
human happiness. The role of energy still remains as a vital ingredient for rapid socio-
economic development. The per capita consumption of energy indicates socio-economic
prosperity of any country. It is also a criterion to distinguish between an advanced and a
poor country. Any nation willing to pursue rapid socio-economic advancement must
assign priority to the development of this vital factor.
Energy development, broadly meaning increased provision and use of energy services, is
an essential part of enhanced economic development. Advanced industrialised societies
use more energy per unit of economic output and far more energy per capita than poorer
societies, especially those still in the pre industrial state. Energy use per unit of output
does seem to decline over time in the more advanced stages of industrialisation, reflecting
the adoption of increasingly more efficient technologies for energy production and
utilisation, as well as changes in the composition of economic activity. And energy
intensity in today’s developing countries probably peaks sooner and at a lower level
along the development path than was the case during the industrialisation of the
developed world. But even with trends toward greater energy efficiency and other
dampening factors, total energy use and energy use per capita continue to grow in the
advanced industrialised countries, and even more rapid growth can be expected in some
developing countries as their incomes advance. The fact that expanded provision and use
of energy services is strongly associated with economic development leaves open how
important energy is a casual factor in economic development. Development involves a
number of other steps besides those associated with energy, notably including the
evolution of education and labour markets, financial institutions to support capital
investment, modernisation of agriculture, and provision of infrastructure for water,
sanitation, and communication. This is not just an academic question; energy
development competes with other development opportunities in the distribution of scarce
capital, and in the allocation of scarce opportunities for policy and institutional reform.
Energy use increases as more economic sectors develop and more channels for flows are
opened. Economic diversity, as measured by the number of economic sectors using
energy and the equitability of flows between them, generally increases. As diversity
increases the efficiency of generating output with a given amount of energy also
increases. Development capacity, the product of system energy throughput the diversity
of flows, is a measure of the potential system output and is calculated for selected
countries. Capacity changes overtime are shown to relate to changes in economic output
in selected countries. Two distinct development strategies become evident, one which
promotes energy use and the other which emphasises diversity and the sustainability of
each.
Due to acute shortage of electricity and other forms of energy, and their rising prices,
Pakistan has been experiencing a slowdown in its economic activities. Major negative
impact is being experienced by its industrial sector and international trade. Energy
availability in Pakistan in all its form has declined or at least remained stagnant during
2008-09, and due to the ever increasing demand, the energy situation may deteriorate in
the current fiscal year. Like previous years, the major sectors affected will be the
manufacturing sector and exports. It should be noted that Pakistan’s exports during July-
December 2009 declined by 3.2 per cent, while India’s grew by 9.3 per cent in December
2009. Poor power supply, along with the circular debt burden has been singled out as one
of the prime reasons for dismal performance of the manufacturing and agriculture sectors.
The future economic development and human prosperity of Pakistan squarely depends on
how successfully it ensures the abundant supply of reliable and affordable energy. If
Pakistan fails to tackle its energy problem effectively, then its population’s sufferings
will increase.
The impact of power shortage is quite visible not only in the form of slowdown in
economic growth, but in the form of severe suffering of the people. Moreover, continuous
increase in petroleum, oil and lubricant (POL) products and utility charges are only
adding to their suffering. Increase in energy prices is immediately reflected on higher
transportation costs and price hike of essential consumer items. On the other hand, to fill
up the revenue gap and to meet the conditionality of major donors, the government is
sometimes compelled to increase the utility charges.
The question that the people of Pakistan generally ask is, how long will they have to wait
to see the nation prosper, especially when, in our corruption-prone society the gap
between the have and have not is widening day by day, and when the number of people
living below the poverty line is also dangerously increasing? Economic stagnation and
the rising poverty level, however, can be effectively addressed by rapidly improving the
dilapidated infrastructure system, energy availability and human indicators. We have
repeatedly heard optimistic news such as the country having the largest coal reserves, and
that it can meet its energy demand for more than a thousand years. It has hydro potential
of 40,000 MW, mostly unutilised; it has huge potential of renewable energy, including at
least 20,000 MW wind power etc. The time is just right to do something about this.
Because of resource constraints and other problems, we cannot do everything that we
need or want to do. But, we can start with a few projects that will take less time and
would be easy to accomplish. One such project is to exploit the huge coal reserves of
Thar, with the cooperation of some friendly countries like China. Pakistan and China
enjoy exemplary friendly ties, which have not only sustained but, in fact, have expanded
becoming deeper and deeper. Pakistan, being its closest friend may ask China to
cooperate in the rapid and comprehensive development of Thar Coal for adequate power
generation. Coal supplied the vast majority (70 per cent) of China’s total energy
consumption requirement. Over the time, China has gained the required experience and
expertise for hazard-free production of coal electricity, and Pakistan can benefit from its
expertise and help. It may be noted that China was interested in various energy sector
development projects in Pakistan including the following:
(1) Collaboration in exploiting the Thar coal and its use for power generation.
(2) Proposal for setting up an oil refinery in Gwadar, along with oil storage and patro-
chemical complex.
(4) Examining the feasibility of installing additional nuclear power plants in Pakistan etc.
It is estimated that coal consumption of the entire world will increase by 49 per cent from
2006 to 2030, and coal’s share in world energy consumption will increase from 27 per
cent in 2006 to 28 per cent in 2030. Of the coal produced worldwide in 2006, 62 per cent
was shipped to electricity producers, 34 per cent to industrial consumers, and most of the
remaining 4 per cent to coal consumers in the residential and commercial sectors. In the
electric power sector its share may decline slightly, from 42 per cent in 2006 to 40 per
cent in 2020, and then increase to 42 per cent in 2030. Pakistan, being an energy deficient
country can no longer neglect this precious gift of God in the form of Thar coal
No special efforts have been made to generate required energy sources. It’s high time
Pakistan explored all possible energy resources for its growing energy demand. The
uninterrupted supply of energy can change the destiny of the nation. The consumption of
energy in domestic, industrial, trade, agriculture and commercial sector is increasing day
by day. The rising demand of the energy and increasing sale of electric and electronic
appliance may lead a part of the country into darkness. Pakistan can produce
approximately 15,000MW to 19, 800MW electricity per day in the current session. The
long and short term plans for the production of the energy should be based on several
resources such as natural gas, thermal energy, hydropower, coal, solar energy, nuclear
power plants, waste, wind, and other useful energy sources. These plans and projects
should be opted by Federal as well as Provincial governments. Pakistan should not put all
her eggs in one basket.
Iran has a gas project to resolve Pakistan’s power crisis. It produces 50,000MW
electricity per day. It can supply at least 1100MW of electricity to Pakistan to overcome
its recent power shortage. It can particularly supply electricity in areas adjoining Iran.
Iran has a very developed electricity generation system and has offered Pakistan to meet
the entire Pakistani shortage of electricity by offering the subsidized rate of 11 cents per
kilowatt hour. Iran has even offered to build the entire transmission lines to Pakistan
entirely with its own money and skilled labour on a record time of 14 months. It is a very
brilliant option both economically as well as security wise. Iran’s offer is practically
reasonable and genuine. It has the ability to fulfil Pakistan’s energy needs. It is already
supplying energy to Turkey, Armenia and Afghanistan. Economically Pakistan will get as
much power as it needs at low cast, and can spend its additional money on developing
industries and other needed projects. And since Pakistan is going to deal with a
government that is trustworthy, it will no more be under pressure of IPPs. The
government of Pakistan and Iran should work together on a plan to make use of the
resources of each other. There are many fields of mutual interest including oil and gas
industry. These kinds of arrangements can be immensely successful and promote peace
and prosperity between the traditionally linked countries.
1. Thermal Energy
2. Hydel Energy
3. Wind Energy
THERMAL ENERGY
Thermal Energy is the oldest type of energy. With all known history available,
Wood was always used for heating and cooking. In 2nd world war fossil fuels
entered in the form of coal to get the energy, until liquid fuels were discovered
and because of their convenience of transportation they took over as major
contributors of the energy source.
Once the steam engines were invented then the coal or liquid fuel was
burnt in the boilers and the heat produces steam which is used to drive
electrical generators, or any other mechanical device.
Rudolph diesels invention of diesel engine revolutionaries the energy
concept and today we see sine the majority of machines moving on diesel
engines.
Diesel engines can be 2 stroke or 4 stroke type. They can be in line or
arranged in V or even W shape. They can be single acting or double acting.
Another method of converting thermal energy to mechanical energy is
by the gas turbines. Turbines are also used to run by steam or hot gases
which are produced by igniting fuel. Energy Crisis in Pakistan 11
For converting thermal energy to electrical energy alternators are used
to drive on constant RPM.
The choice of gensets strictly depends on the requirement of the client,
before ordering a power plant following points to be considered
1. Expected demand of the power.
2. Type of fuel required
3. Space available for the power plant
4. Avilability of genset
5. Avilability of local service back up and stock of parts
6. Price is paramount importance and hidden expenses should be looked
carefully
The major manufacturers and suppliers of Gensets based on internal
combustion engines are given below
1. MAN
2. Wartsila
3. Caterpillar
4. Jen Bacher
5. Waukesha
6. Mitsubishi
7. Detroit Diesel
8. Rolls Royce
Internal combustion engine can obtain 30-50% thermal efficiency. It
means that around 50% energy is wasted in the form of exhaust gases ,
cooling systems and radiation. Therefore for larger plants heat recovery
systems are utilized.
In Pakistan due to attractive gas prices this is a general trend that gas
operated power plants are preferred if gas connections are available.
The gas gensets are available from less than 1 MW sizes to 6 MW
configuration. Normally they are V type and 12,16 18 and 20 cylinder
configuration.
In addition some models are available on duel fuel technology which
can be operated simultaneously on gas and furnace oil.
The price of a 3 MW gas genset can be expected around 1 Million $.
However low RPM engines will be more costly Unit cost of fuel on gas genset
can be evaluated as follows
HYDEL ENERGY
Water flowing in the rivers has kinetic energy. Once they are used to drive
the turbine and produce electricity the power generated as Hydel Energy.
Power produced by the turbines depends on quantity of water
flowing/minute and the head of water available.
Mostly river flows by melting glaciers on high mountains. Once the
water start flowing in the valleys it changes its head very rapidly. This energy
can be converted into electrical energy.
Two method are normally used:-
1. Dams
2. Run of River projects.
In case of Dams the water flow is restricted by making a huge storage
device and the head of water is increased, the water then is allowed to flow by
means of gates and pass through the turbines, the head of reservoir level is
maintained to provide uniform power, and the water stored in peak season
additionally is used for irrigation purposes in dry seasons.
In run of river projects the water is diverted through the tunnels and
once it gains the head allowed to fall and pass through the turbines and back
to river. the water in these projects is continuously flowing and not being
stored.
Geographical situation is paramount importance in choosing a suitable
site for the hydro project and it evolves a very serious time and money
consuming study.
Once a site is located further detailed feasibility study is required
before proceeding any serious effort to start the work.
The feasibility study should include following field work.
1. Detailed Mapping of the area
2. Topographic study of the area
3. Seismic refraction study
4. River flow data
5. Weather data containing, Temperatures, pressures, rain humidity
6. Water sampling and testing
7. Environmental study
8. Social impact
Energy Crisis in Pakistan 13
9. Wild life and fish study
10. Identification of stake holders of the area
11. Coring and getting samples of the soil at 50-200 meters depth
12. Laboratory testing of the cores samples
13. Tectonic study to evaluate earth quake dangers
2007
http://www.energy.com.pk/hydel.htm
WIND ENERGY
Pakistan is facing acute shortage of energy. with 7% increase of its economy
this short fall soon to slow down its economic growth and will shatter its
dream to become one day a developed country.
Most of its energy demand is being met with either Hydro power or
thermal units. Pakistan is spending a very large amount of foreign exchange to
purchase the furnace. The gas reserves already start depleting and oil markets
are sky rocketing. To overcome this shortage Government take a initiative to
investigate Alternate energy resources in Pakistan developed Alternate Energy
Board AEDB. The Board is headed by Retd Air Marshal Shahid Hamid. identified
50,000 MW energy potential from wind resource
AEDB issued about 80 LOI to the investors List of LOI holders )to
develop 50 MW wind farms. Out of which 15 are already issued the land and
feasibility reports and financial closings are in progress.
1. www.wilmers.com
2. www.ammonit.de
3. www.environdata.com.au