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How to Resolve Energy Problems of Pakistan?

Conference Paper · September 2018

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 Proc. of the 4rth International Conference on Power Generation Systems and Renewable Energy Technologies (PGSRET)
10-12 September 2018, Islamabad, Pakistan

How to Resolve Energy Problems of Pakistan?

1st Anwar Zeb 2nd Shoaib Ahmad 3rd Azad Haider
Department of Energy Department of Energy Department of Economics
Elan Partners (Pvt.) Ltd SAARC Energy Center Saint Mary’s University
Islamabad, Pakistan Islamabad, Pakistan Halifax, Canada
anwar.emgt@gmail.com ddcoord@saarcenergy.org azadhaider@gmail.com

4th Abdul Basit 5th Muhammad Salman

Department of Energy Department of Energy
Elan Partners (Pvt.) Ltd Elan Partners (Pvt.) Ltd
Islamabad, Pakistan Islamabad, Pakistan
abdul.basit@elan.com.pk muhammad.salman@elan.com.pk

Abstract—Presently, the demand of energy in

Pakistan is higher than supply and also the energy TABLE 2. ENERGY DEMAND SECTORS OF
mix is based on expensive fuels. To resolve the energy PAKISTAN
problems of Pakistan, it is needed to implement Demand Sector Percentage of total
various supply and demand side actions through a energy consumed
Industrial 35.1%
unified energy policy under well functional regulatory
Transport 33.7%
system. Furthermore, the energy mix of Pakistan
Domestic 23.2%
should base on low cost indigenous energy resources Commercial 4%
along with a maximum share of renewable energy. Other Government 2.5%
Agriculture 1.6%
Keywords—Pakistan, energy problems, energy mix, Source: Energy year book, Pakistan 2016
unified energy policy & indigenous resources. The annual growth rate of supply and demand are
about 5.3% and 8.1% respectively [6].
I. INTRODUCTION
II. ENERGY PROBLEMS OF PAKISTAN
Energy is highly important for any economy
[1].Economic activities and energy sector are Presently, in Pakistan indigenous energy supply is
related together [2]. Electricity and natural gas are less than demand. The projection shows that
important factors for economic growth supply-demand gap is further widening with
[3].Similarly, in Pakistan, the economic growth and passage of time. Thus Pakistan is confronting
energy sector development are also directly related. serious “energy crises” [7]. The main features
[4].Electricity, natural gas and oil are crucial contributed to these crises are circular debt,
commercial energy resources of Pakistan [5]. financial issue, low exploitation of gas, coal and
During 2015-16, the primary commercial energy hydel resources [8]. The current energy mix of
supplies of Pakistan have reached to about 74 Pakistan is majorly constituted by oil and gas
million tons of oil equivalent (toe). Out of total 74 instead of hydel and coal which is an expensive
million toe energy about 46 million toe has been approach [9]. Irrational prices due to subsidies,
tapped from local resources while remaining 28 overstaffing and inadequate maintenance are
million toe has imported. Table1 shows the energy common issues of Pakistan’s energy sector [10].
mix of Pakistan by supplies. Technical & managerial incompetence,
unsatisfactory legislation, weak governance, lack of
TABLE 1. ENERGY MIX OF PAKISTAN - 2016 energy conservation are reasons of current energy
Source Percentage
Gas 41.2%
crises [11]. The energy regulatory bodies of
Oil 34.2% Pakistan have not succeeded to attract investors and
Hydro 11.2% protect end consumers [12].
Coal 6.9%
LNG 3.3% III. ENERGY POTENTIAL OF PAKISTAN
LPG 1.2%
Nuclear Electricity 1.5%
Renewable Electricity 0.5% Pakistan is gifted with almost all kind of energy
Imported Electricity 0.1% resources but even then it is facing serious energy
Source: Energy year book, Pakistan 2016 crises at the moment. A good number of gas, oil
The total available energy for final consumption is and coal reservoirs are present in the country.
about 45 million toe as about 24 million toe is used About 8 trillion cubic meter natural gas reserves
in transformation process while about 5 million toe including 0.8 trillion cubic meter proven reserves
is used for non-energy use. Table 2represents the are present. Similarly, about 27 billion barrels of
demand side of Pakistan’s energy sector. crude oil reserves including 300million barrels
 proven reserves are present in Pakistan. Due to the development of renewable energy
discovery of Thar Coal reserves, Pakistan is now projects. Furthermore, it is needed to
sixth largest coal potential country while having replace high cost energy resources with
about 185 billion tons of coal reserves including hydro, solar wind and biomass etc. The
3.3 billion tons of proven reserves. Pakistan is government should further facilitate and
amongst ten developing countries having the encourage the private sector for the
ability to generate power from nuclear stations. development of grid tied and off-grid
Pakistan has also good potential to tap energy renewable electricity projects in potential
from renewable energy resources. Despite of these zones.
all potentials, Pakistan fulfills about 24% of its 2) Focus on Indigenous resources
energy requirements from imports [13]. With It is the time to maximize the share of
reference to power generation from renewable indigenous resources in energy mix of the
energy resources, Pakistan has the potential of country which may decrease the
about 2,900,000 MW from solar, 346000 MW dependency on imports of fuels. It is
from wind,3000 MW from biomass, 3000 MW needed to tap coal from Thar coal field
from micro-hydel projects and about 1000 MW (estimated value of 174 billion tons) by
from waste to energy projects [14]. using environment friendly technology.
Federal and provincial governments
IV. RENEWABLE ENERGY TREND should encourage the exploration &
production companies to explore more oil
To include the shares of renewable energy in its & gas from new fields in the country. The
energy mix, Pakistan released Renewable Energy tight and shale gas should also be focused.
Policy 2006. The purpose of this policy was to 3) LNG and Pipeline Projects
develop renewable energy in country. Initially, the As aforementioned that energy mix should
progress regarding this policy was slow but focus on indigenous resources but for
recently it has attracted investors toward wind, energy security it is also needed to import
solar and small hydel projects [15]. The recent low cost energy from different countries.
trend in Pakistan towards power generation from The viable options should be to import
solar and wind projects is shown below in Fig. 1 LNG from Gulf countries and natural gas
through regional pipeline projects.
4) Rationalizing Energy Prices and
Controlling Circular Debt
1556 Pakistan should make its energy market
efficient by rationalizing the energy prices
1234 and discouraging untargeted subsidies.
The prices should be cost reflect for
investors and affordable for end-
consumers. The pricing mechanism should
be on international standards allowing
730 735
685 maximum possible level of liberalization
and competition in the market. The
circular debt issue should be controlled on
400
308 urgent basis as in the current scenario the
power shortage is a cash flow issue rather
100 than capacity.
5) Technology Transfer
2015 2016 2017 2018 Pakistan needs to adopt latest efficient
Solar Energy Wind Energy
energy technology due to which additional
Fig.1. Solar and Wind Energy Development in Pakistan (MW)
Source: AEDB
energy will be added to supply side.
Pakistan should approach technically
V. METHODS TO RESOLVE ENERGY advanced countries for transferring energy
PROBLEMS OF PAKISTAN efficient technology.
6) Privatization & Competition
Literature shows that energy crises of Pakistan is a Pakistan needs to complete its
multifaceted issue and needs to adopt various privatization process in energy sector. The
simultaneous actions on both supply and demand privatization should be equally focused on
side as given below. generation/production and transmission &
A. Supply Side Actions distribution sides. Pakistan should take
1) Diversification of Energy Mix serious actions to privatize incompetent
It is needed to diversify the energy mix of public companies. A competitive
Pakistan and include least cost energy
resources by providing special attention to
2
environment through multiple sellers and buyers  Adopting energy efficient building
model is the demand of the time to be introduced in codes/Green Buildings
Commercial  Energy Auditing & labeling
the existing single buyer model.
 Use of energy efficient equipment
7) Supply side transportation and and lighting system
distribution Losses  Maximum usage of sunlight
It is needed to decrease transmission &  Use of smart meters
distribution losses in power sector which  Adopting energy efficient building
codes/Green Buildings especially in
is currently about 15-20%. Similarly,
high rise buildings
unaccounted for gas (UFG) losses should  Discouraging late night settings
further decrease from the existing range of  Adopting Energy efficient
5-10%.Regulatory authorities should management plan
seriously look in to this matter on priority Other  Efficiently & timely usage of public
Government lights
basis.
 Maximum usage of sunlight
8) Encourage Investment in energy  Adopting energy efficient building
sector codes/Green Buildings especially in
To finance the energy projects, it is high rise buildings
needed to formulate investor friendly  Adopting Energy efficient
management plan
policy. The concerned authorities should Agriculture  Using energy efficient
protect investors from various manageable machinery/equipment including
risks, unnecessary taxes and high duties. motors
The financial health of energy sector  Timely usage of tube wells whenever
needs soundness and for this purpose required
private investment is highly required to be
attracted. The energy sector firms should 2) Discouraging Energy Theft and low
adopt appropriate cooperate financing recoveries
methods including issuance of preferred On demand side it is needed to make
and common stocks as to improve their aware the general public about negative
financial positions. consequences of energy theft and non-
B. Demand Side Actions payment of bills. These issues result in
1) Energy Conservation & Efficiency bad debts which finally contribute to
Energy conservation & efficiency at circular debts. Strict actions are needed to
consumers end are two good approaches adopt against those who are involved in
of Demand Side Management (DSM) for energy theft or not paying their utility bills
reducing unnecessary consumption of without any justified reason.
energy. There are different opportunities C. Way Forward
of energy conservation & efficiency 1) Unified Energy Policy
through which extra energy can be saved. A unified energy policy for all kinds of
A general sketch of various energy resources is needed to formulate and
conservation & efficiency methods needed implement while covering the above
to adopt in Pakistan is summarized below mentioned supply & demand side actions
in Table 3. in addition to other appropriate actions.
2) Effective Energy Regulation
TABLE 3. ENERGY CONSERVATION & The proposed unified energy policy
EFFICIENCY METHODS NECESSARY should be implemented through
FOR PAKISTAN
Demand Actions to be taken
autonomous energy regulatory set-up by
Sector exercising international standard practices
Industrial  Energy auditing & labeling of energy regulation. A single regulatory
 Adopting energy efficient equipment authority instead of separate bodies will be
especially motors more effective to implement a unified
 Use of smart meters
 Maximum usage of sunlight
energy policy here in Pakistan.
 Adopting energy efficient building
codes/Green Buildings VI. ENERGY PROJECTS UNDER CHINA
 Adopting Energy efficient PAKISTAN ECONOMIC CORRIDOR
management plan
Transport  Usage of mass transport
The government of Pakistan has a long term vision
 Adopting Vehicle Fitness Certificate
System to diversify the energy mix through a sustainable
 Construction of roads and affiliated way. It is expected that CPEC will provide a
infrastructure according to standard platform for the development of energy projects in
engineering design Pakistan while focusing on indigenous resources
Domestic  Use of energy efficient equipment
and lighting
including coal and renewable energy resources [8].
 Maximum usage of sunlight According to CPEC official data, various power
 Use of smart meters projects are in various phases of development in
3
 Pakistan with a cumulative capacity of about VII. CONCLUSION
13,810 MW. Among these projects, about 70% of
power generation is planned from coal, 20% from It is concluded that energy problems of Pakistan
hydro, 7% from solar and 3% from wind resources. may be resolved by taking the above mentioned
The description of various energy projects under supply & demand side actions through a unified
CPEC is given in Table 4. energy policy under well functional regulatory
system. Due to supply side actions, additional
TABLE 4. ENERGY PROJECTS UNDER CPEC energy will be added to the energy system of
S. No. Project Capacity Pakistan while through demand side actions the
(MW) demand will be efficiently conserved and
Category A – Coal Projects ultimately the supply will surpass the demand. It
1. 2×660MW Coal-fired Power Plants 1320 is strongly needed to further increase the ratio of
at Port Qasim Karachi
2. CPHGC 1,320MW Coal-fired 1320
renewable energy projects in CPEC as it is the
Power Plant, Hub,Balochistan way towards sustainability.
3. Sahiwal 2x660MW Coal-fired 1320
Power Plant, Punjab
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Sub Total D 400

Total (A+B+C+D) 13,810

Source:http://cpec.gov.pk

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