Energy Crises in Pakistan

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Pakistan should look for all alternatives to increase its electrical energy production by 10,000 MW in two years. This is a very challenging and difficult task. But if it fails to achieve the target, all other indicators will go negative leaving behind a disastrous situation. Pakistan's Energy Crisis

Thursday, March 01, 2012

Energy is assuming central stage due to the rapid economic growth in different parts of the world, pushing energy demand higher. Unfortunately Pakistan is facing major energy crisis nowadays. The energy crisis is affecting all walks of life in the country. The situation further deteriorated because of the stoppage of the supply to industrial units by Sui Gas Company. The Company was already going through a system of load-shedding itself due to excessive use of gas by CNG users. Many electricity generation units were shut off due to non-availability of the gas. The IPPs who were operating on furnace oil could not get the regular supply of the furnace oil due to the circular debt issue. And then naturally the blame game started, starting from the water shortage in Dams to furnace oil transportation problem, violence in Sind and maintenance activity in some independent power producers. The government admitted that in last 10 years not a single MW was added. The fact is that Pakistan is sustaining an acute shortage of Power. Its demand is increasing and production is declining due to aging of the plants. And no solution is in sight. The projects which are in pipeline will not come in line before 2013. And even the magnitude is such that it will not be able to fulfill the demand of today.

The energy solution was in building of the big dams but this became controversial issue due to the Kala Bagh dam. Nobody took any step to resolve either Kala Bagh issue or start some new dam. The WAPDA is still in favour of large dams considering that the delay in construction of large dams was the basic reason for the shortage of power. But the construction of big dam will take at least 10 years and we cannot wait that long. If this situation persists, our economy will then come to a stage where it will need any power at any rate. Even today both businesses and households are spending huge sums on the import of power generators and their fuel. The funds spent on these imports are putting enormous drain on the economy. Although larger industries can put more money in the electricity generation, the real problem is with the small and medium enterprises which are facing the real crunch. The SMEs sector has to be facilitated due to its importance as engine of growth in the economy. In the present situation, it cannot afford its own electricity generation.

Expensive import-based, oil-run power generation is not the answer. These have already increased Pakistan's fuel import bill. Moreover, uncertainty prevailing in the oil producing region is adversely affecting the oil prices which are showing a steady rise in the last few years. A decade ago oil was being traded on $20 and nobody ever thought that the price will cross the $147 mark in a short span of time. There is some drop in the price but oil is still being traded around $90 today. This is putting huge burden on economies of the developing world including Pakistan. The country is facing another problem. Its power generating infrastructure especially thermal units are aging with every passing day and their power generation capacity is reducing. The acute shortage has increased agony of the nation through load-shedding. The economy of the country was on the path of economic recovery but the shortage has further delayed it. The energy shortage is causing at least 3-4 percent loss in the GDP. The shortage along with global financial crisis, war on terror and floods has pushed back the economy into low growth path. The delay in the decision of building big dams has resulted in high cost of electricity generation by imported oil. "An official energy demand...
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