ENERGY

The capacity of a physical system to do work; the units of energy are joules or ergs; "energy can take a wide variety of forms" Energy is a fundamental uantity that every physical system possesses; it allows us to predict how much work the system could !e made to do" or how much heat it can produce or a!sor!# $n the past" energy was discussed in terms of easily o!serva!le effects it has on the properties of o!jects or changes in state of various systems# %asically" if something changes" some sort of energy was involved in that change# The capacity for doing work# &orms of energy include thermal" mechanical" electrical" and chemical# Energy may !e transformed from one form into another# The capacity for doing work as measured !y the capa!ility of doing work 'potential energy( or the conversion of this capa!ility to motion 'kinetic energy(# Energy has several forms" some of which are easily converti!le and can !e changed to another form useful for work# )ost of the world*s converti!le energy comes from fossil fuels that are !urned to produce heat that is then used as a transfer medium to mechanical or other means in order to accomplish tasks# is the property something has that ena!les it to do work# The unit of energy is the joule '+(# The !asic forms of energy are kinetic energy" potential energy" and rest energy# The law of conservation of energy states that energy can !e neither created nor destroyed" although it may change from one form to another 'including mass(#

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.ifferent /ources of Energy

Energy

.eplete a!le &ossil Nuclear

Non0 .eplete a!le 1ydro /olar 2ind %io0)ass &uel03ell

4il Gas 3oal 2ood

%io04il %io0Gas

Bio-Diesel Ethanol

Fig 1: Sources of Energy

2.1.1

.eplete a!le Energy

2.1.1.2 Coal, Oil and Gas are called "Fossil Fuels": 3oal" oil and gas are called "fossil fuels" !ecause they have !een formed from the organic remains of prehistoric plants and animals# Till -667s they provided around 889 of the world*s electrical power" and 6:9 of the world*s total energy demands 'including heating" transport" electricity generation and other uses(# Advantages

;ery large amounts of electricity can !e generated in one place using coal" fairly cheaply# Transporting oil and gas to the power stations is easy# Gas0fired power stations are very efficient# < fossil0fuelled power station can !e !uilt almost anywhere" so long as you can get large uantities of fuel to it# .idcot power station" in 4=fordshire" has a dedicated rail link to supply the coal#

Disadvantages

%asically" the main draw!ack of fossil fuels is pollution# %urning any fossil fuel produces car!on dio=ide" which contri!utes to the "greenhouse effect"" warming the Earth# %urning coal produces more car!on dio=ide than !urning oil or gas# $t also produces sulphur dio=ide" a gas that contri!utes to acid rain# 2e can reduce this !efore releasing the waste gases into the atmosphere# )ining coal can !e difficult and dangerous# /trip mining destroys large areas of the landscape# 3oal0fired power stations need huge amounts of fuel" which means train0loads of coal almost constantly# $n order to cope with changing demands for power" the station needs reserves# This means covering a large area of countryside ne=t to the power station with piles of coal#

2.1.1.2 Nuclear Power - energy from s litting !ranium atoms > Nuclear power is generated using ?ranium" which is a metal mined in various parts of the world# :

The first large0scale nuclear power station opened at 3alder 1all in 3am!ria" England" in -6:8# /ome military ships and su!marines have nuclear power plants for engines Nuclear power produces around --9 of the world*s energy needs" and produces huge amounts of energy from small amounts of fuel" without the pollution that you*d get from !urning fossil fuels# Advantages

Nuclear power costs a!out the same as coal" so it*s not e=pensive to make# .oes not produce smoke or car!on dio=ide" so it does not contri!ute to the greenhouse effect# @roduces huge amounts of energy from small amounts of fuel# @roduces small amounts of waste# Nuclear power is relia!le#

Disadvantages

<lthough not much waste is produced" it is very" very dangerous# $t must !e sealed up and !uried for many years to allow the radioactivity to die away# Nuclear power is relia!le" !ut a lot of money has to !e spent on safety 0 if it does go wrong" a nuclear accident can !e a major disaster# @eople are increasingly concerned a!out this 0 in the -667*s nuclear power was the fastest0growing source of power in much of the world# $n ,77: it was the second slowest0growing#

2.1.2

Renewa!le Energy

2.1.2.1 "idal ower - energy from t#e sea: The tide moves a huge amount of water twice

each day" and harnessing it could provide a great deal of energy 0 around ,79 of %ritain*s needs# <lthough the energy supply is relia!le and plentiful" converting it into useful electrical power is not easy# There are eight main sites around %ritain where tidal power stations could usefully !e !uilt" including the /evern" .ee" /olway and 1um!er estuaries# 4nly around ,7 sites in the world have !een identified as possi!le tidal power stations# Advantages

4nce you*ve !uilt it" tidal power is free# $t produces no greenhouse gases or other waste# $t needs no fuel# $t produces electricity relia!ly# Not e=pensive to maintain# Tides are totally predicta!le# 4ffshore tur!ines and vertical0a=is tur!ines are not ruinously e=pensive to !uild and do not have a large environmental impact#

Disadvantages

< !arrage across an estuary is very e=pensive to !uild" and affects a very wide area 0 the environment is changed for many miles upstream and downstream# )any !irds rely on the tide uncovering the mud flats so that they can feed# There are few suita!le sites for tidal !arrages# 4nly provides power for around -7 hours each day" when the tide is actually moving in or out#

2.1.2.2 $ave Power - energy from t#e wind on t#e sea > 4cean waves are caused !y the wind as it !lows across the sea# 2aves are a powerful source of energy# The pro!lem is that it*s not easy to harness this energy and convert it into electricity in large amounts# Thus" wave power stations are rare# Advantages

The energy is free 0 no fuel needed" no waste produced#

Not e=pensive to operate and maintain# 3an produce a great deal of energy

Disadvantages

.epends on the waves 0 sometimes you*ll get loads of energy" sometimes nothing# Needs a suita!le site" where waves are consistently strong# /ome designs are noisy# )ust !e a!le to withstand very rough weather#

2.1.2.3 %iomass - energy from organic materials: 2ood was once our main fuel# 2e !urned it to heat our homes and cook our food# 2ood still provides a small percentage of the energy we use" !ut its importance as an energy source is dwindling# /ugar cane is grown in some areas" and can !e fermented to make alcohol" which can !e !urned to generate power in the same way as coal# <lternatively" the cane can !e crushed and the pulp 'called "!agasse"( can !e !urned" to make steam to drive tur!ines# 4ther solid wastes" can !e !urned to provide heat" or used to make steam for a power station# "%ioconversion" uses plant and animal wastes to produce fuels such as methanol" natural gas" and oil# 2e can use ru!!ish" animal manure" woodchips" seaweed" corn stalks and other wastes# Advantages $t makes sense to use waste materials where we can# The fuel tends to !e cheap# Bess demand on the Earth*s resources

Disadvantages

3ollecting the waste in sufficient uantities can !e difficult# 2e !urn the fuel" so it makes greenhouse gases# /ome waste materials are not availa!le all year round

,#-#,#5Geot#ermal &nergy is energy from #eat inside t#e &art#: The centre of the
Earth is around 8777 digress 3elsius 0 hot enough to melt rock# Even a few kilometers down" the temperature can !e over ,:7 degrees 3elsius# $n general" the temperature rises one degree 3elsius for every D8 meters you go down# $n volcanic areas" molten rock can !e very close to the surface# Geothermal energy has !een used for thousands of years in some countries for cooking and heating# The name "geothermal" comes from two Greek words> "geo" means "Earth" and "thermal" means "heat"# Advantages

Geothermal energy does not produce any pollution" and does not contri!ute to the greenhouse effect# The power stations do not take up much room" so there is not much impact on the environment# No fuel is needed# 4nce you*ve !uilt a geothermal power station" the energy is almost free# $t may need a little energy to run a pump" !ut this can !e taken from the energy !eing generated#

Disadvantages

The !ig pro!lem is that there are not many places where you can !uild a geothermal power station# You need hot rocks of a suita!le type" at a depth where we can drill down to them# The type of rock a!ove is also important" it must !e of a type that we can easily drill through# /ometimes a geothermal site may "run out of steam"" perhaps for decades#

2.1.2.5 'ydro-electric ower is generated from falling water: 2e have used running water as an energy source for thousands of years" mainly to grind corn# The first use of water to generate electricity was in -CC, on the &o= River" in the ?/<" which produced enough power to light two paper mills and a house# Nowadays there are many hydro0electric power stations" providing around ,79 of the world*s electricity# The name comes from "hydro"" the Greek word for water# Advantages 4nce the dam is !uilt" the energy is virtually free#

No waste or pollution produced# )uch more relia!le than wind" solar or wave power# 2ater can !e stored a!ove the dam ready to cope with peaks in demand# 1ydro0electric power stations can increase to full power very uickly" unlike other power stations# Electricity can !e generated constantly#

Disadvantages The dams are very e=pensive to !uild#1owever" many dams are also used for flood control or irrigation" so !uilding costs can !e shared# %uilding a large dam will flood a very large area upstream" causing pro!lems for animals that used to live there# &inding a suita!le site can !e difficult 0 the impact on residents and the environment may !e unaccepta!le# 2ater uality and uantity downstream can !e affected" which can have an impact on plant life#

2.1.2.6 Pum ed (torage )eservoirs - storing energy to co e wit# *ig demands: @umped storage reservoirs aren*t really a means of generating electrical power# They*re a way of - energy so that we can release it uickly when we need it# .emand for electrical power changes throughout the day# &or e=ample" when a popular T; programme finishes" a huge num!er of people go out to the kitchen to put the kettle on" causing a sudden peak in demand# $f power stations don*t generate more power immediately" there*ll !e power cuts around the country 0 traffic lights will go out" causing accidents" and all sorts of other trou!le will occur# The pro!lem is that most of our power is generated !y fossil fuel power stations" which take half an hour or so to crank themselves up to full power# Nuclear power stations take much longer# 2e need something that can go from nothing to full power immediately" and keep us supplied for around half an hour until the other power stations catch up# @umped storage reservoirs are the answer we*ve chosen# Advantages

2ithout some means of storing energy for uick release" we*d !e in trou!le# Bittle effect on the landscape# No pollution or waste

-7

Disadvantages

E=pensive to !uild# 4nce it*s used" you can*t use it again until you*ve pumped the water !ack up# Good planning can get around this pro!lem#

2.1.2.7 (olar Power is energy from t#e (un: 2e*ve used the /un for drying clothes and

food for thousands of years" !ut only recently have we !een a!le to use it for generating power# The /un is -:7 million kilometres away" and amaEingly powerful# +ust the tiny fraction of the /un*s energy that hits the Earth 'around a hundredth of a millionth of a percent( is enough to meet all our power needs many times over# $n fact" every minute" enough energy arrives at the Earth to meet our demands for a whole year 0 if only we could harness it properly# Advantages

/olar energy is free 0 it needs no fuel and produces no waste or pollution# $n sunny countries" solar power can !e used where there is no easy way to get electricity to a remote place# 1andy for low0power uses such as solar powered garden lights and !attery chargers

Disadvantages

.oesn*t work at night# ;ery e=pensive to !uild solar power stations# /olar cells cost a great deal compared to the amount of electricity they*ll produce in their lifetime# 3an !e unrelia!le unless you*re in a very sunny climate# $n the ?nited Fingdom" solar power isn*t much use e=cept for low0power applications" as you need a very large area of solar panels to get a decent amount of power#

2.1.2.8 $ind ower - energy from t#e air: 2e*ve used the wind as an energy source for a long time# The %a!ylonians and 3hinese were using wind power to pump water for irrigating crops 5"777 years ago" and sailing !oats were around long !efore that# 2ind power was used in the )iddle <ges" in Europe" to grind corn" which is where the term "windmill" comes from# Advantages

--

2ind is free" wind farms need no fuel# @roduces no waste or greenhouse gases# The land !eneath can usually still !e used for farming# 2ind farms can !e tourist attractions# < good method of supplying energy to remote areas#

Disadvantages

The wind is not always predicta!le 0 some days have no wind# /uita!le areas for wind farms are often near the coast" where land is e=pensive# /ome people feel that covering the landscape with these towers is unsightly# 3an kill !irds 0 migrating flocks tend to like strong winds# /platG 3an affect television reception if you live near!y# 3an !e noisy# 2ind generators have a reputation for making a constant" low" "swooshing" noise day and night" which can drive you nuts# <n entire wind farm makes uite a racketG

,#-#,#6

%io &uels

'i( %io Diesel: Natural" renewa!le resources such as vegeta!le oils and recycled
restaurant greases can !e chemically transformed 'transesterifition( into clean0 !urning !io diesel fuels# $tHs also safe for the environment" !iodegrada!le" and produces significantly less air pollution than diesel fuel# $t even smells !etter than diesel fuelIit smells like &rench fries" donuts" or !ar!ecue#

'ii( Fuel &t#anol: Ethanol is a li uid derived from sugar" grains" other
agriculture products J wastes# This li uid can !e used as high octane fuel in vehicles# Ethanol is consumed as fuel in ?/ as KGasoholL a !lend containing -79 Ethanol J 679 Gasoline !y volume# <n other !lend of ethanol called EC: 'C:9 Ethanol J -:9 Gasoline( is also !eing used" and num!er of vehicles using Ethanol is increasing in ?/<# Advantages They are good renewa!le resources" each crop can replenish the stock of the fuel <dds the lu!ricity !ack into the fuel> Bow /ulfur and ?ltra Bow /ulfur .iesel '?B/.( re uire lu!ricity while !io diesel is a totally renewa!le additive for this role and complements ?B/.#

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%io fuel is easy to phase in and out" so you can maintain fle=i!ility in technology deployment# $t can !e !lended in with e=isting fuel to create various mi=tures# %io fuel solvency" higher cetane M octane num!er and increased lu!ricity means longer engine life and e=cellent engine performance# %io fuel cuts air to=ics e=haust emissions and particulates !y more than :79" and sulfur up to -779" depending on the !lend# <t the same time" it minimiEes !lack smoke and odor" lowering greenhouse gas emissions and acid rain# Easier to handle and does not re uire mechanics to use !arrier cream on their hands to protect the skin from cracking or redness# .egrades a!out 5 times faster than petroleum after spillage" with most of a spill !roken down after just ,C days

Disadvantages Ethanol can also !e used for drinking purposes# 3old starting pro!lem with use of !io diesel# %io fuels cannot !e stored for more than si= months# /caling" injector chocking" moisture pro!lem with use of !io fuels#

,#, Glo!al Energy 3risis

$n the near future" a reduced availa!ility of primary resources as well as environmental" ecological" social and political issues will have major effects on rural development# Escalating costs of fossil fuel will precipitate a cascade of environmental" economic" political and cultural changes for which society is unprepared# The energy supply demand deficit has the potential to eclipse climate change as the driving force for sustaina!le development# @lanet earth is under a num!er of interacting stresses !rought a!out !y human activity# $f humans are to continue to developNor merely e=istNa major adjustment of peopleHs activities will !e needed# )ajor stresses include# @ollution and climate change with potentially a!rupt environmental warming; /carcity of fuel or renewa!le energy that can !e harnessed to replace fossil fuels> oil production will peak 'or has peaked( and world supplies will start to decline with massive effects on human activity; /carcity of water> 879 of the worldHs people are likely to have insufficient water !y ,7,:# 2ater for irrigation will limit food production; Boss of !iodiversity and e=tinction of large num!ers of organisms; < continuing population increase" mainly in the resource poor countries#

-D

4ver the past ,7 years" glo!al warming has !ecome increasingly recogniEed as potentially the greatest threat to the well!eing of humans# 1owever" the phenomena known as Opeak oilH !arely recogniEed or stuck in Othe too hard !asketH !y politicians" scientists and world leaders" is now creating shock waves through the worldHs economy# $n the short term" the outcomes from peak oil may reduce the commitment !y governments to greenhouse gas a!atement policies# $t appears that the potentially high cost of energy will !ecome a major driving force for sustaina!le development# <s many aspects of human life are dependent on li uid fuel sources" the coming oil crisis will affect all segments of a countryHs economy and in particular on agriculture and animal farming# The decline in availa!le fuel and the su!se uent rise in price will precipitate a cascade of environmental" economic" political and cultural change for which we are unprepared# &ossil fuel reserves were deposited from the residues of algae growing in warm shallow seas followed !y !urial as the sea floor sank and the de!ris was heated !y the EarthHs heat flow over hundreds of thousands of years# 2orld oil deposits occur in only a few of the potentially oilN!earing geological provinces# )ost of these areas have !een mapped and there is relia!le information on the state of world reserves !efore e=ploitation and at the present time# 2orld total oil resources other than those in inaccessi!le deepNsea areas or in tar sands are estimated to !e close to ,777 !illion !arrels# These calculations are !ased on oil that has already !een e=tracted plus estimated reserves in known fields and a prediction of fields yet to !e discovered# The Oyet to !e discoveredH oil will !e in the most difficult sites to mine 'polar and deepNsea sites( and therefore this oil is recogniEed as a high priced resource# There are potentially D777 !illion !arrels of oil in tar sands and shale deposits" mainly in the ?/< and 3anada #E=ploitation of this nonN conventional oil is difficult and haEardous" as it re uires a considera!le amount of water" is energy e=pensive to e=tract and is highly polluting# $t would appear that two !arrels of conventional oil are re uired to e=tract three !arrels of oil from shale deposits effectively These reserves will certainly !e mined in the future !ut with a long leadNtime# 4ptimistic estimates suggest that shale oil will !e a Otwo million !arrel per day industryH

,#D Energy 3risis in @akistan

@akistan*s energy consumption has nearly tripled in the last ,7 years" from 7#8 uadrillion %tu in -6C7 to -#6 uads in ,77-# /till" @akistan accounts for less than 7#:9 of total world energy consumption# $n terms of per capita energy consumption" @akistan*s level of -,#6million %tu in ,77- was higher than %angladesh*s 'D#A million %tu(" !ut virtually on par with $ndiaHs '-,#8 million(# $n comparison" 3hina*s per capita energy consumption in ,77- wasD7#6 million %tu" $ran*s was C7#D million %tu" and Russia*s was -6:#D million %tu" while ?#/#per capita consumption was D5-#C million %tu# <s industry has e=panded" factories have emitted more and more to=ic effluents into the air# <lso" as in other developing countries" the num!er of vehicles in @akistan has swelled in recent years00from 8C7"777 in -6C7 to : million in ,77D# The -66, National 3onservation /trategy Report claims that the average @akistani vehicle emits ,: times as much car!on

-5

dio=ide as the average ?#/# vehicle" as well as ,7 times as many hydrocar!ons and more than D#: times as many nitrous o=ides in grams per kilometre#3ars are the leading source of air pollution that adversely affects @akistan*s economy and population# Economic damages from ur!an air pollution are estimated at a!outPDA7 million" with 8#5 million people hospitaliEed annually for air0pollution0related illnesses# < recent advertisement placed !y the government in a newspaper warned" "Take care of your tune0ups !efore the poison in the air takes care of you#L )any @akistani environmentalists say that poor fuel uality is also to !lame for the country*s serious air pollution pro!lems# &uel consumption rose !y-CC9 in @akistan from -6C7 to -66C" and gasoline continues to contain high levels of lead and sulfurs# ?nleaded gasoline was introduced in ,77-" !ut many vehicles in @akistanHs major cities still use leaded gasoline# ;arious grades of gasoline sold contain a!out D:7mgMlitre of lead00in comparison" leaded gasoline in other countries usually contains no more than -:7 mgMliter #Energy generation and com!ustion activities are the most significant contri!utor to @akistanHs greenhouse gas emissions" accounting for a!out A7"777 Gg" or appro=imately879 of total estimated emissions in the country# Emissions from fossil fuel com!ustion comprise the vast majority of these emissions" while releases of car!on dio=ide from fossil fuel com!ustion account for 88",6C Gg# The production" transmission" storage and distri!ution of fossil fuels also emit greenhouse gases 'primarily methane( and are termed fugitive emissions from natural gas systems" oil productionMrefining and local mining# These gases represent a much smaller portion of total energy emissions than 34 !ut are" nonetheless" important# )ore than C:9 of energy in @akistan is produced through the use of fossil fuels" primarily natural gas and petroleum# The remaining -:9 consists of renewa!le or other energy sources such as hydropower" !iomass and nuclear energy#

Energy Source 4il Gas 3oal NuclearMRenewa!leM4ther Total

Emission Levels !" D6#, DC#7 A#A -:#-77

#$%le 1: Emission %y Energy Source

The energy related emissions can !e significantly reduced through the implementation of programs that reduce energy consumption and there!y reduce the resulting emissions proportionately; as well as improve the efficiency of com!ustion and as a result" reduce emissions !y a factor possi!ly much larger than the percentage reduction in energy use# The impact of !oth these effects is increased profits or lower costs# $n addition to the direct reduction in emissions" energy efficiency programs also promote environmental protection !y greatly enhancing awareness of the concept of conservation; !y training and education of engineers and technicians regarding more efficient management practices; and !y developing policies which promote rational pricing of energy#

-:

@akistan o!tains its energy re uirements from a variety of traditional and commercial sources# 4il supply from indigenous resources has !een the weakest link in the energy supply system of @akistan# ?ntil early -6C7 crude oil production was a nominal -D"777 !arrels per day '%.@(" which rose to 85"D56 %@. in -66706-# /ince then production has !een continually declining# The remaining oil reserves are estimated at ,,- million !arrels which" on the average production rate of :A"777 !arrels per day" will !e e=hausted in a!out -7 years# 3onse uently" it appears that @akistan will remain a net importer of crude oil and refined oil products unless a major discovery of crude oil is made# The total primary energy consumption in @akistan is currently estimated at around 87 million tons of oil e uivalent ')T4E(# 4f this" two0thirds are met !y commercial energy resources with a!out one0third !eing !ased on non0commercial energy resources like fire0wood" charcoal and cow0dung# The primary commercial consumption of 5-#A )T4E is largely !ased on the use of hydrocar!ons# Source of &ommerci$l Energy Gas 4il 3oal 1ydro Nuclear and other 'rim$ry Energy Su((lies !" DC#85,#C :#, -D#7 7#,

#$%le 2: 'rim$ry Energy Su((lies %y Source

4il and gas account for more than three0 uarters of the commercial energy consumption in the country# Gas has emerged over the years as the leading domestic source of energy# @akistan has apprecia!le coal reserves of -#A !illion tonnes of oil e uivalent 'T4E(# 4il is !y and large an imported source of energy# The imports of oil account for C:9 of oil consumption in the country and 5,#C9 of commercial energy consumption# The production of indigenous oil is around -:9 of total imports of oil products" which is likely to remain the case# @akistani oil sector performance" unlike that of the natural gas sector" has not !een satisfactory" !oth !y way of e=ploration" e=ploitation and development of oil fields" and !y way of refining of crude oil into various products" with the result that A79 of total demand of crude oil is !eing met through imports# $t costs a!out ?/P ,#: !illion every year to import a!out -C million tons of oil as !oth crude and refined products" representing a great !urden on foreign e=change resources# No significant new discovery of crude oil has !een reported in the recent past# 4f course efforts are underway !oth !y national and international e=ploration and development companies to make new oil discoveries# Transport" power and industry are the major oil consuming sectors of the economy Sec) or$l Transport @ower $ndustry <gricultural .omestic 4ther Govt# -8 &onsum()ion ! 5A#, DD#, -,#6 -#: D#7 ,#D

#$%le 3: Sec) or$l &onsum()ion

Today" the primary energy supplies are not enough to meet even the present demand# /o" @akistan" like other developing countries of the region" is facing a serious challenge of energy deficit# Renewa!le energy sources can play an important role in meeting this challenge# 2.3.1 O+,: @akistan produced 8-"A86 !arrels per day '!!lMd( of oil in ,77D 'of which 87"777 !!lMd was crude oil(" and consumed D87"777 !!lMd of petroleum products# Net oil imports were D7C"777 !!lMd in ,77D# 2hile there is no prospect for @akistan to reach self sufficiency in oil" the government has encouraged private 'including foreign( firms to develop domestic production capacity# @akistani domestic oil production centers on the @otwar @lateau in @unja! and lower /indh province. /tate0owned 4il and Gas .evelopment 3orporation Bimited '4G.3B( is a leading firm in the industry" producing around,,"DD5 !!lMd according to company information# < :9 stake was sold in a pu!lic offering in Novem!er ,77D for appro=imately P--6 million# 4G.3B is @akistan*s second0largest oil producer after ?F!ased %@# The government will also offer a stake of up to -:9 of @akistan @etroleum Bimited '@@B(" the largest e=ploration and production firm in @akistan# 3urrently the government controls 6D9 of the company" which owns the /ui fields in %alochistan" as well as e=ploration interests in ,, !locks# The government also has a D:9 stake in @akistan 4ilfields Bimited '@4B(# 4il sector reforms in @akistan are generally on track" !ut the privatiEation of several firms" including @akistan /tate 4il '@/4(" continues to !e postponed# The government*s divestiture of its :-9 stake in @/4 to a strategic partner has !een planned for several years# @/4 holds a 879 domestic market share in diesel fuel and has more than D"A:7 retail outlets# .eregulation of prices for petroleum products is !eing pursued in parallel with the privatiEation of @/4# <s part of the country*s privatiEation process" @akistan is setting up a Gas Regulatory <uthority 'GR<( and the @etroleum Regulatory %oard '@R%(" which will separate out government functions from state0owned companies to !e privatiEed# @akistan*s government hopes to reap significant revenues from these privatiEations over the ne=t several years# The two most significant foreign oil firms in @akistan are %@ and Eni#%@ operates 5D fields in @akistan and had reported average production of ,:"CAA !!lMd in ,77D# 4ther firms include %1@ %illiton '<ustralia( 4); '<ustria(" @etronas ')alaysia( and @remier 4il '?F(# @akistan*s net oil imports are projected to rise su!stantially in coming years as demand growth outpaces increases in production# .emand for refined petroleum products also greatly e=ceeds domestic oil refining capacity" so nearly half of @akistani imports are refined products# @akistan*s @ak0<ra! Refinery '@<R34( !ecame operational in late ,777" adding to the country*s refining capacity" and alleviating refined product import dependence# The @<R34 )id 3ountry Refinery at )ahmood Fot was formally commissioned in ,77- and has capacity of -77"777 !!lMd of throughput 'mostly crude oil

-A

from <!u .ha!i and and Bight <ra!ian 3rude from /audi <ra!ia(" supplied to the plant !y pipeline from Farachi# < small" D7"777 !!lMd refinery operated !y private %osicor @akistan Bimited '%@B( near Farachi !egan commercial operation in Novem!er ,77D# The plant is supplied with shipments of crude oil from Qatar# The %osicor plant will allow @akistan to !ecome a new supplier of naptha to &ar Eastern markets# Naptha makes up appro=imately 69 of the plant*s output# The plant produces a!out -7"C77 !!lMd of fuel oil" 8"6C7 !!lMd of diesel" and 5"D:7 !!lMd of kerosene" among other products# @/4 has a supply contract to purchase the totality of the %osicor refinery*s products for the ne=t -7 years# <nother major planned project is the "$ran0@ak" refinery" which would have a capacity of -D7"777 !!lMd# The refinery will !e located near the !order with $ran in %aluchistan province and would !e a :7>:7 partnership !etween @akistan*s @etroleum Refining and @etrochemical 3orporation '@ER<3( and the National $ranian 4il 3ompany 'N$43(# 4il processed at the $ran0@ak refinery would come almost e=clusively !y sea from $ran" and would !e unloaded at a terminal to !e !uilt for the refinery# The project has failed to reach financial closure" however" as N$43*s demand for a guaranteed rate of return is at odds with @akistan*s policy against such guarantees#

2.3.2 Nuclear &nergy: < small '-,: )2e( @12R plant was commissioned in -6A-# Fnown as Fanupp 'Farachi Nuclear @ower @lant(" this facility makes a minor contri!ution 'less than -9( to the national electricity supply# $n addition" a second plant '3hasnupp -(" a D77 )2e @2R" has !een constructed at 3hasma; it was connected to the grid in +une ,777# @lans are reported for a second unit at 3hasma" to !e operational in a!out ,776> negotiations with 3hina on its construction were under way in )ay ,77-# The Farachi facility" which was !uilt in -68: with 3anadian assistance" has demonstrated a poor operating record" which00in addition to concerns in the international community a!out @akistan*s possi!le use of nuclear material for weaponsIhas contri!uted to the lack of further development of the country*s nuclear power sector# The 3hashma Nuclear @ower @lant was !uilt with 3hinese assistance and inaugurated in ,77-# @akistan is placing more emphasis on nuclear power to meet future energy needs and has !egun talks with 3hina over the development of a second facility at 3hashma# 2.3.3 Natural Gas: @akistan has ,8#C trillion cu!ic feet 'Tcf( of proven gas reserves" and currently produces around 7#C Tcf of natural gas per year" all of which is consumed domestically# Natural gas producers include @akistani state0owned companies @akistan @etroleum Btd# '@@B( and 4il and Gas .evelopment 3orporation '4G.3B(" as well as %@" Eni" 4);" and %1@# <s part of its energy sector reform program" the government is committed to privatiEing a -:9 stake of @@B 'see a!ove(" the largest gas producer in the country" capa!le of producing AA7 million cu!ic feet per day ')mcfd(# The largest currently productive fields are /ui" !y far the largest at 8:7 )mcfd" <dhi and Fandkhot '-,7 )mcfd(" )ari" and Fandanwari#

-C

@akistan*s demand for natural gas is e=pected to rise su!stantially in the ne=t few years" with an increase of roughly :79 !y ,778" according to @akistan*s oil and gas ministry# @akistan also plans to make gas the "fuel of choice" for future electric power generation projects" hoping to su!stitute domestic gas supplies for imported foreign oil# This will necessitate a sharp rise in production of natural gas" and also has generated interest in @akistan in pipelines to facilitate imports from neigh!ouring countries# .evelopment of new natural gas fields with the help of foreign investors is proceeding" with @akistan*s government e=pecting recently discovered fields to add a!out - !illion cu!ic feet per day '%cfd( to @akistan*s natural gas production# 3urrently" fields in production include /awan at a!out D88 )mcfd" %hit at a!out D-8 )mcfd" and RamEama in /indh province producing a!out ,5C )mcfd" !ut possi!ly a!le to produce DC7 )mcfd following a new gas discovery in +anuary ,775. @akistan*s government restated its willingness to permit a natural gas pipeline linking $ran*s massive reserves to $ndian markets across @akistani territory# @akistan would earn transit fees for $ranian gas supplied to $ndia and also would !e a!le to purchase some gas from the pipeline when and if its own demand was sufficient# 2hile $ran and @akistan have shown great interest in the project" $ndia has !een reluctant to move forward as long as political and military tensions with @akistan over Fashmir persist# The issue was due to !e discussed at !ilateral talks !etween $ndia and @akistan in +une ,775" although negotiations are still e=pected to !e protracted and difficult# $ran is offering $ndia that it will cover 879 of the construction costs of the pipeline" !ut $ndia remains wary of @akistani access to its energy supply# $ndian officials said the plan could !e considered if @akistan can provide security guarantees for the PD !illion project# @akistan could earn a!out P877 million annually in transit fees from the pipeline# <nother natural gas import possi!ility is an eventual link with the .olphin @roject" a scheme to supply gas from Qatar*s North .ome gas field to the ?nited <ra! Emirates and 4man" via a su!0sea pipeline from 4man# Even though @akistan has signed a preliminary agreement to eventually purchase natural gas from Qatar" it remains to !e seen how the initial stages of the pipeline project go !efore a route to @akistan can !e conclusively negotiated# 2.3.* &lectric Power: @akistan has -C gigawatts 'G2( of electric generating capacity# Thermal plants using oil" natural gas" and coal account for a!out A79 of this capacity" with hydroelectricity 'hydro( making up ,C9 and nuclear plants ,#:9# @akistan*s total power generating capacity has increased rapidly in recent years" due largely to foreign investment" leading to a partial alleviation of the power shortages @akistan often faces in peak seasons# Rotating !lackouts '"load shedding"( are" however" still necessary in some areas# Transmission losses are a!out D79" due to poor uality infrastructure and a significant amount of power theft# @eriodic droughts affect the availa!ility of hydropower# 2ith much of the @akistan*s rural areas yet to receive electric power" and less than half of the population connected to the national grid" significant power demand growth is e=pected in the long term" though in the short term" @akistan has some e=cess generation capacity# -6

The electric power sector in @akistan is still primarily state0owned" !ut a privatiEation program is reportedly underway# The main state0owned utilities are the 2ater and @ower .evelopment <uthority '2<@.<(" and the Farachi Electricity /upply 3orporation 'FE/3(" which serves only Farachi and surrounding areas# Together" 2<@.< and FE/3 transmit and distri!ute all power in @akistan 00 over half to household consumers" a!out one third to industrial consumers and the rest to commercial and government consumers# Rates are determined !y the National Electric @ower Regulatory <uthority 'Nepra( and disputes over adjustments to rates are common within the industry. &or e=ample" Nepra announced in +uly ,775 that electricity rates would !e lowered for domestic" industrial and agricultural customers in the three distri!ution areas of 1ydera!ad" @eshawar" and Quetta# The distri!ution companies affected complained that due to the lower rates" they will !e una!le to cover their operating costs# Nepra has advised the federal government to su!sidiEe the providers at a cost of around P,5 million# 2<@.< and FE/3 too !lame low rates on weak earnings and enormous de!ts to fuel suppliers# 2<@.< is at the center of a pu!lic sector "circular de!t" pro!lem" in which state firms and government ministries have failed to pay power !ills" and 2<@.< has failed to meet o!ligations to them and to private sector creditors" especially state0owned @/4# @ower theft is a pressing issue in @akistan# 2hile it is impossi!le to precisely measure theft 'as opposed to line loss(" it is o!vious that it constitutes a siEa!le proportion of @akistan*s overall D79 loss rate# The situation was so severe !y early -666 that the @akistani government assigned army units to look for illegal connections to transmission lines and rigged meters# @ower theft is just one part of the financial pro!lems for 2<@.<" however# Growth in power generation in recent years has come primarily from new independent power producers '$@@*s(" some of which have !een funded !y foreign investors" and a few 2<@.< hydroelectric dam projects# The two largest private power plants in @akistan are the 1u! @ower 3ompany '1?%34( and the Fot <ddu power company 'F<@34(# 1?%34 is owned !y a consortium of $nternational @ower '?F(" Senal '/audi <ra!ia(" and )itsui 3orporation" and has a -"D770)2 capacity# The Fot <ddu plant" with a -"8770)2 capacity" was privatiEed in -668 'from 2<@.<(" and $nternational @ower holds a D89 e uity stake" while the government holds a soon0to0!e divested 859 stake# %oth of these plants" as well as a few other small private operators" sell power to the national grid currently run !y 2<@.<# %y )ay ,775" $nternational @ower cut its holdings in 1?%34 from ,89 to -89" after the plant saw a drop in profits# This is reportedly part of $nternational @ower*s overall glo!al strategy and not a comment on the @akistani energy sector# $n <pril ,77D" the )inistry of $ndustries and @roduction announced that it was planning to !uild coal0fired power0generation plants in e=port processing Eones and in special industrial states to provide a less e=pensive source of energy# 4fficials hope to

,7

e=ploit the large" untapped coal reserves in Tharkparkar# <t present" coal makes up less than a :9 share in overall energy production# @lans are also underway to e=pand @akistan*s hydro capacity 00 the government approved the construction of 5 new hydro plants to !e !uilt in the North 2est &rontier @rovince !y ,77:M,778 that would generate several hundred megawatts of additional power# $f the P:#: !illion Fala!agh project is approved 00 currently it is !eing held up !ecause of environmental impact and downstream economic impact concerns 00 the new hydro plant could supply ,"5770D"877 )2 of generation capacity# The GhaEi %arotha hydro plant came online in ,77D at a cost of P, !illion and a generation capacity of -"5:7 )2# 2.3.5 "#ar Coal: 3oal currently plays a relatively minor role in @akistan*s energy mi=" !ut the discovery of large volumes of low0ash" low0sulphur lignite in the Tharparkar 'Thar( .esert in /indh province could increase its importance# Thar reserves are !eing developed under the jurisdiction of the provincial /indh 3oal <uthority and have enormous economic potential# The <uthority*s policy is to develop the reserves primarily to fuel large electric power plants to !e !uilt in tandem with the coal mines# < feasi!ility study recently was carried out for the construction of a coal0fired power plant near the Thar coal mines" and the government has stated that coal should make up more than the current -9 of electric power generation in @akistan#
#$%le *: +orl, Energy &om($rison- 2..*

#$%le 5: 'rim$ry Energy /i0 %y &oun)ry- 2..*

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2.3.6 &nvironmental 'a-ards: @akistan*s attempt to raise the living standards of its citiEens has meant that economic development has largely taken precedence over environmental issues# ?nchecked use of haEardous chemicals" vehicle emissions" and industrial activity has contri!uted to a num!er of environmental and health haEards" chief among them !eing water pollution# )uch of the country suffers from a lack of pota!le water due to industrial waste and agricultural runoff that contaminates drinking water supplies# @overty and high population growth have aggravated" and to a certain e=tent" caused" these environmental pro!lems# $n the cities" widespread use of low0 uality fuel" com!ined with a dramatic e=pansion in the num!er of vehicles on @akistani roads" has led to significant air pollution pro!lems# <lthough @akistan*s energy consumption is still low !y world standards" lead and car!on emissions are major air pollutants in ur!an centers such as Farachi" Bahore" and $slama!ad# $n addition" stress on already stretched supply of energy in the county has led to serious civic responsi!ility pro!lems# Theft or diversion of electricity in transmission" as well as a lack of energy efficiency standards" have contri!uted to @akistan*s high energy and car!on dio=ide intensities#

,#5 /olution to Energy 3risis

2.*.1 Committed Government : @akistan has an installed electricity generation capacity of -6",,, )2" which will produce more than C7"777 G2h of electricity this year 'of which D79 is in the private sector(# 3urrently" less than :79 of the country has access to electricity and therefore" the government is committed to further develop this sector in order to promote sustained industrial growth# The Economic 1ydropower potential in @akistan is estimated at ,7"777 )2" while the country*s e=isting 1ydropower generation capacity is 8"587 )2 and projects for an additional D":77 )2 are currently under development in the pu!lic and private sectors# The estimated re uirement in @akistan for !uilding mega dams in the ne=t two decades is ?/. ,7#5 !illion" against which the 2orld %ank has approved annual funding of ?/. 677 million# The Government of @akistan" on its part" has also planned on spending a similar amount on an annual !asis for the ne=t ,7 years# $n addition" private investors have su!mitted E=pressions of $nterest to generate over 6"777 )2 of power re uired in the ne=t :08 years through 1ydel" Thermal and 3oal !ased projects# /imilarly"

,,

under a phased programme the entire Thermal power Generation" which consumes a major part of the imported fuel oil" is also !eing switched over from oil to indigenous natural gas The government is currently spending ?/. ,77 million a year to upgrade the e=isting generation" transmission and distri!ution system# 1owever" the 2ater and @ower .evelopment <uthority '2<@.<( re uires funding of ?/. : !illion to improve upon the e=isting transmission and distri!ution network of D87"777 km*s in the country# @akistan also possesses an estimated -C: !illion tons of 3oal reserves" which are one of the largest in the world# &easi!ility studies are also underway for the development of Energy of over -"777 )2" through the use of coal and solid waste# E=ploration and utiliEation of alternate sources of power through use of /olar and 2ind energy" has also !een initiated in @akistan# .uring the last two decades @akistan has developed its potential in @hotovoltaic '@;( technology" which is suita!le for small power re uirements and remote area applications# 2.*.2 Clean Fuels +nitiative: The government*s -66: 3lean &uel $nitiative introduced the possi!ility of using alternative fuels for vehicles# <s of ,77-" ,77"777 cars were fitted to use compressed natural gas '3NG( which pollutes less than gasoline# The government has also set up -:7 3NG fueling stations around the country" and is looking into converting diesel vehicles to 3NG as well# @akistan has investigated converting rickshaws to 3NG through a pilot project with the 3anadian $nternational .evelopment <gency '3$.<(# @reliminary results suggest that converting rickshaws to 3NG would !ring considera!le cost0savings for rickshaw owners and environmental !enefits throughout @akistan# ?nfortunately" outside funding would !e re uired to e=pand the program as the capital investment to convert rickshaws to 3NG is !eyond the reach of most rickshaw owners# 2.*.3 )enewa*le &nergy: Renewa!le energy consumed in @akistan in -66A totaled -"-D, trillion %tu" a -9 increase from -668# 1ydroelectric power is an important domestic energy source" generating ,C9 of all electricity in the country" and a num!er of new sites are !eing developed# <lthough the mountainous north gives @akistan much hydroelectric potential" difficulty of access and the high cost of transmission to the populous south make development of this potential a distant prospect# Nevertheless" the @akistani government has started working on feasi!ility studies for the construction of more dams" with feasi!ility reports of at least five small dams e=pected to !e completed !y the end of ,777# $ndeed" some development of renewa!le energy sources has !een undertaken precisely because of the population*s difficulty of access# $n order to provide electricity to rural areas that would otherwise not have electricity in the foreseea!le future '!ecause they are either too remote andMor too e=pensive to connect to the national grid(" @akistan is turning to solar power# @akistan has worked with 2orld2ater" an <merican company" to install solarpowered water pumps that can help address the water needs of people in rural areas without electricity# The government hopes that" !y harnessing solar power for energy in rural areas" it will reduce villages* reliance on firewood# @akistan is still shifting

,D

to modern energy sources" with firewood" dung" and !agasse 'the woody residue left over from crushed sugarcane( making up one0third of all energy consumed in @akistan as recently as -6CC# <lthough @akistan is an ideal physical environment for solar energy" many projects have failed !ecause systems needed maintenance after e=pert personnel had left# /tudies are underway on how future solar projects can !e sustained at a local level !y @akistani villages# 2.*.* National &nergy Conservation Centre .&N&)CON/: To capture the su!stantial economic !enefits provided !y conserving energy" the Government of @akistan" esta!lished the ENER34N as a permanent agency to serve as a focal point for all energy conservation activities" including policy formulation# ENER34N is dedicated to conduct and undertake energy conservation activities in @akistan# The main program areas consist of energy conservation in industry and power sector" agriculture"" !uildings" and road transport sector# Through the implementation of its wide0ranging activities" the ENER34N has made significant contri!utions to the development of the energy conservation technology and has achieved a significant energy saving potential in various sectors of economy of @akistan# The impact has !een !oth" direct and indirect" uantitative and ualitative# ENER34NHs programmes provide a comprehensive and unified approach to energy conservation# $n a short period of its inception" ENER34N has> 3reated awareness regarding the cost0effectiveness and potential for energy savings; @roved that energy conservation is the cheapest and most readily availa!le source of additional supply of energy in @akistan; and .emonstrated that simple measures implemented on a nation0wide scale can achieve large savings uickly and at a fraction of the cost of new supplies#

2.*.5 )esearc# and Develo ment: Renewa!le energy systems are e=pensive in terms of installation costs# The power from them is also availa!le intermittently N when the renewa!le source 'for instance" wind or solar energy( is availa!le# 4n the other hand" they are free of any input fuel" and hence their ever rising costs# They also incur much less operation and maintenance costs and are supposed to have a longer lifetime# Thus" using renewa!le power looks uneconomical in the short term" !ut may turn out profita!le in the long term# Therefore" the key uestion is what can make investment in renewa!le power generation accepta!leT The creation of @akistan 3ouncil of Renewa!le Energy Technology '@3ERT( in -667" and later the creation of <lternate Energy .evelopment %oard '<E.%( in ,77D have kept the potential and hopes of developing renewa!le energy alive# $n addition" the Energy Group at /.@$ is conducting research to find answers to this uestion through a financial analysis" which looks at the costs involved in setting up renewa!le power !usinesses in @akistan and in identifying factors that can help attract investment in the renewa!le technologies# The research especially focuses on finding out

,5

the cost of renewa!le power generation and then on determining a suita!le tariff that is accepta!le !oth to the prospective investor and electricity purchasers in the country# 2.*.6 Coal &0 loitation: The Government of @akistan is strongly emphasiEing a wide use of the vast deposits of coal found in the desert of Thar# $t is planning to provide incentives to independent power producers to set up production plants at the mine sites and to sell electricity to the national grid# $t is also urging cement industries all over the country to use this coal# 1owever" the coal" low uality lignite" is known to contain significant sulfur concentrations# E=tensive use of this coal is" therefore" likely to su!stantially increase environmental degradation" particularly when used in cement plants situated near cities and towns# <ny future use of the Thar coal demands schemes for removing pollutants" particularly sulfur" and reducing ash contents# There are several ways of doing this" one among them !eing the conversion of coal to .i0methyl ether '.)E( or any other compound of higher energy content# The project will investigate the technology and economics of pre0com!ustion conversion of the Thar coal and will advise the government on the !est use of it# 2.*.7 ,i*erali-ation and De1regulation of Power sector in Pa2istan: @akistan*s power sector was li!eraliEed in mid -667s# /ince then 2<@.<" the state utility has seen an increase in its losses and has gone !ankrupt# The nature of agreements inked with $ndependent @ower @roducers 'or $@@s(" drained out 2<@.<# 3onsumers" on the other hand" have constantly suffered rising tariffs since the inception of private power in @akistan# 2<@.<*s own conditions have deteriorated to an e=tent that the utility*s annual losses hover around Rs#57 !illion# $ts old and outdated infrastructure only adds to its woes# The utility*s line losses lie !etween ,A0D7 percent# The Government of @akistan has taken steps to revamp 2<@.<" foremost of which is the un!undling of the utility into distri!ution and generation companies# The Energy Group of /.@$ is preparing a report" which tries to address the pro!lemsMcontroversies generated !y li!eraliEation and deregulation of power sector in @akistan# The report is in its final stages and would come out soon#

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