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Report
NATIONAL CONFERENCE
Solutions for Energy Crisis in Pakistan
Organized by
Islamabad Policy Research Institute (IPRI)
In collaboration with
Hanns Seidel Foundation (HSF)
at
Islamabad Hotel, Islamabad
May 15-16, 2013

General
Pakistan is facing an acute and lingering energy crisis which is not only affecting
the daily life of people but is also hindering the overall development and progress
of the country. Although the installed generation capacity is greater than peak
summer demand, exorbitant production cost makes the electricity unaffordable
for the domestic consumer and uneconomical for commercial users. Currently,
multiple ministries and institutions are dealing with different aspects of national
energy policy; whereby, conflict of interest often impedes the formulation and
implementation of a coherent and sustainable policy framework. Electricity prices
have skyrocketed due to an increasing reliance on thermal sources. Regrettably,
most of the vendors presenting alternative routes end-up focusing more on
production issues than the actual cost.
Governments inability to purchase expensive power produced by the
private sector results in gross underutilization of production facilities. Lack of
public awareness for resource conservation, governance issues,
technical/managerial inefficiency and inadequate legislation further accentuate
the crisis.
As stop-gap measures, various agreements with neighbouring countries
have already been put in place to meet the countrys energy demand through
direct purchase of electricity. Moreover, actualization of Iran-Pakistan (IP) and
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Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects are
moving ahead, though at a slow pace.
Studies reveal that Pakistan has a huge potential for generating
renewable energy from sources such as solar, wind and water. Biomass, coal
and nuclear power generation are other untapped cheaper options. The central
challenge facing the country at the moment is to find cheaper and sustainable
means of generating electricity and to reconfigure the energy mix for continued
supply of uninterrupted power, at an affordable price a task easier said than
done.
An analysis of the prevailing situation suggests that the energy crisis
requires immediate attention of the government at the policy level. Considering
the importance of this issue, Islamabad Policy Research Institute (IPRI)
organized a two-day national conference in collaboration with Hanns Seidel
Foundation (HSF), Islamabad, on the topic Solutions for Energy Crisis in
Pakistan, on May 15-16, 2013, in the Islamabad Hotel, Islamabad.
The objective of this conference was to formulate policy recommendations
which provide short-term as well as long-term solutions to Pakistans energy
crisis. Specifically, the aim was to formulate a National Energy Vision: 2030,
covering aspects like policy making, alternative energy sources, attraction of
investments and developmental strategies. The conference focused on
generating energy through economically viable means and estimating the
amount of electricity required in 2030 in order to sustain a growth rate of 6-8
percent.
Conference Proceedings
May 15, 2013 (Wednesday Day I)
Inaugural Session
Welcome Address: Dr. Noor ul Haq, Acting President IPRI in his opening and
welcome address, highlighted the importance of the topic of the conference. He
welcomed the speakers, guests and audience to the two-day national
conference. He said that Pakistan is suffering from persistent energy crisis
causing hardships for the people, adversely affecting industry and economy. He
said that the purpose of conference was to formulate policy recommendations
which would be shared with the relevant ministries and departments.

Opening Remarks: Mr. Kristof W. Duwearts, Resident Representative HSF,
Islamabad, welcomed all participants of the conference on behalf of HSF. He
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said that HSF has continuously been collaborating with think tanks, government
departments and the civil society in Pakistan. He highlighted that regional
approaches play very important role in a globalized world. In 2010, the German
government developed its energy concept with concrete steps to be taken and
the target was to transform the German energy system to low emission arena.
Germany decided to speed up the process after the horrendous events in
Fukushima, and a new energy concept was passed by German parliament in
2012. Furthermore, it was decided that by the year 2050, the amount of
renewable energy production should be brought up to at least 80%. Germany
has been trying to greening its economy and likewise Pakistan should also do the
same. There is a need to correct the energy mix in Pakistan. There is a need of
strengthening individual responsibly with every single citizen in Pakistan and
everywhere in the world, as energy is a very precious good and it should not
lavishly used.

Inaugural Address by the Chief Guest: Dr. Masoom Yasinzai, Vice
Chancellor, Quaid-i-Azam University, Islamabad, cautioned that we as a nation
cannot survive with an economic growth rate of 3 to 4% with a population
growing with over 2%. So, we must double the economic growth to counter that
population outburst. Pakistan has been blessed by Allah with natural resources
i.e., wind, solar, coal and bio energy. We must tap these. He claimed that country
had both physical and scientific resources to solve the energy problem but the
policy makers just didnt want to listen. He said that Dr. Samar Mubarakmand
had been crying hoarse as far as coal is concerned. There are 175 billion tons of
coal buried in Thar, Sindh. Russia, Australia, Europe and even Central Asian
States have been doing it with coal. China is generating 81% of energy from
coal, India 64% and US 56% while Pakistan is generating less than 1%. Pakistan
is also blessed with more than 1000 kilometers of coastal belt, but its pity that we
dont use wind mill or wind turbine to get wind energy from there. Pakistan has
sufficient sun exposure, are we benefiting from it?
He mentioned molasses from the sugar industry of which 80 percent was
being exported at junk market rates instead of being used as a source for energy
generation. He said making biogas and using biomass for energy generation was
not rocket science that the country could not use as a sustainable and
environment friendly source; but the academias research work was being
neglected and all of its research was going waste. We need to involve academia
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as Pakistan has been investing so much in academia. He quoted UNESCO
which says countries that made no use of their natural resources were bound to
become poor. Present economic growth rate needs to be doubled and allocation
for education must be raised to 4 percent if the country has to be saved from
economic doom. We cannot enter into knowledge economy era with just 7% of
youth in higher education. We must increase that number on emergency basis to
at least 15% so that energy research institutes could be opened.

Session I Correcting the Energy Mix: Selecting Alternatives
Mr. Mirza Hamid Hasan, former Secretary, Ministry of Water and Power, spoke
on An Overview of Pakistans Energy Sector: Policy Perspective. He said
that energy is the lifeline of all modern societies and access to reliable, affordable
and uninterrupted supply of energy is the key to economic growth and welfare of
any society. He talked about Pakistans current energy scenario; Pakistan has
been facing severe energy shortage for the last few years, both of electric power
and natural gas, which are two major sources of energy for our industry,
domestic supply and transport sectors. The shortage of natural gas which is
widely used in four sectors i.e., domestic supply, industry, power generation and
transport, in descending order, has been caused by fast depleting gas reserves
and rapidly increasing demand. However, the electricity shortage has not been
caused by a lack of generation capacity which at the moment exceeds the peak
demand by about 5000 MW.
He pointed out number of factors such as excessive line losses caused by
inefficient transmission and distribution systems coupled with high level of theft,
low recovery of revenues by distributions companies (DISCOs) from public as
well as private users, and inadequate and delayed payment of subsidy by the
government owed on account of non-revision of tariff imposed by them for
political considerations result in a chain of defaulting entities making it difficult for
the power generation companies (GENCOs) and IPPs to utilize their existing
generation capacity due to financial crunch. This has also given rise to a huge
circular debt which is currently at a level of Rs.400 billion.
He further said that excessively high power prices have also driven
electricity out of reach of a large number of people and made it unsustainable for
industrial consumers, resulting in closure or relocation of many industrial units.
The electric power supply thus suffers from the multiple problems of availability,
affordability and reliability at the consumer end. He emphasized that the current
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state of affairs lies with poor governance and management, lack of policy or bad
policy choices have also played an equally big, if not bigger, role in bringing us to
this pass.
Talking about Pakistan energy scenario, he said that during 2011-12
Pakistans total energy availability was 66.015 Million Tons of Oil Equivalent
(mtoe), of which 45.251 mtoe (i.e., 68.54%) was indigenous production while
20.764 mtoe (31.46%) was imported. He said that our energy supply has not
been able to keep pace with the demand and the supply-demand gap is
constantly increasing. According to some estimates, energy shortages have cost
the country up to 4% of GDP over the past few years. They have also forced the
closure of hundreds of factories paralyzing production and exacerbating
unemployment.
Then he talked about the key players in the power sector. WAPDA and
KESC were vertical utilities and sole players in the power sector until a few years
ago in all aspects from generation to transmission and distribution. But as a
result of restructuring of the power sector and induction of private producers into
power generation the institutions have greatly proliferated. WAPDA has been
split up into a number of entities. A new entity, Pakistan Electric Power Company
(PEPCO) was created as the controlling company of the various public sector
generation (GENCOs), transmission (NTDC) and regional distribution companies
(DISCOs) for thermal power in the country. PEPCO has since been wound up
and replaced by Central Power Purchase Agency (CPPA). The power companies
have all been made independent commercial entities. WAPDA is only concerned
with hydel power generation now. KESC continues to be a vertically integrated
utility but has since been privatized. National Electric Power Regulatory Authority
(NEPRA) is another important player. Alternate Energy Development Board
(AEDB) is a smaller player for alternate energy. As the energy crunch continues,
there is more and more emphasis on developing alternate sources of energy
such as solar, wind and micro-hydel etc.
He said that there are different issues which power sector is facing and
they are the policy, Governance and management issues, technical issues and
cost issues. The energy sector has long suffered with fragmented and ad-hoc
policies and decisions. The absence of a single energy institution and lack of
coordination and synergy between various institutions dealing with different sub-
sectors of energy is an important issue that was never addressed. Hydel power is
the cheapest way and we have abundant of it but we did not pay any attention to
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utilize it. He said that quality of governance has a direct bearing on the access,
reliability and pricing of power. Poor management, coupled with corruption and
other factors related to governance, results in poor delivery of electric power and
puts it beyond the reach of low income groups due to excessive cost. Another
factor is the inadequate maintenance and repair of public sector power
generation plants, either due to financial constraint or sheer neglect, which has
either drastically reduced the operating efficiency of the plants thereby increasing
cost of generation to unsustainable levels or made them unserviceable. He
mentioned that circular debt is one of the most important problems. He pointed
out that greater reliance on thermal power, use of expensive furnace oil as fuel,
non-availability of natural gas, poor governance and management resulting in
large scale power theft and non-recovery of revenues, expensive power from
IPPs and low efficiency of public sector power plants are the driving factors which
have contributed to making the price of electricity unaffordable for average
domestic user and unsustainable for industrial users. He emphasized that there
should be some short term; medium term and long term measures as well as
some hard policy decisions in order to overcome this deficiency.

Prof. Dr. Khanji Harijan, Professor Mehran University, Jamshoro, presented his
paper on Renewable Energy: Potential and Prospects. Dr. Khanji said that
the renewable energy is generated from natural resources such as sunlight,
wind, water, tides, and biomass which are renewable (naturally replenished).
Solar Energy, Wind Energy, Hydel Energy, Biomass Energy, Biogas, Bio Fuels
(Ethanol & Biodiesel), Bio Power (Cogeneration from Biogases), Tidal, OCTE
and Wave Energy, and Geothermal Energy are types of the renewable energy
sources (RES).
Talking about the use of renewable energy source he said that at present,
RES contribute about 16.7% of the global energy consumption. Main renewable
energy contributions are traditional, mainly non-commercial biomass such as fuel
wood, crop residues and dung (8.5%), and hydropower (3.3%). All other modern
renewables provided approximately 4.9% of the energy consumption in 2010 and
have been experiencing rapid growth in many developed and developing
countries alike.
He further described that these renewable energy sources if utilized
properly will be more advantageous for us as they are indigenous, abundant, free
of cost (resource material), environment friendly, and decentralized. Sustainable
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renewable energy resources are being replaced/generated at the same rate that
they are being utilized. Hence they will last indefinitely.
About the consumption of biomass energy, he elaborated that 65% of the
population of Pakistan lives in rural areas. Majority of these rural people have no
access to commercial energy such as gas, electricity etc. Traditional fuels like
firewood, dung and crop residues currently contribute a major share in meeting
the energy requirements of rural and low income urban households especially for
cooking and heating purposes. The rural people meet more than 95% of their
domestic energy needs by burning bio fuels. About 89% of the total final biomass
energy is consumed in the domestic sector and the remaining 11% is consumed
in the industrial sector as industrial process heat.
He gave reasons that why the development of these renewable is required
as the nation is facing energy crises widening demand and supply gap (7-8
GW power supply shortage), dwindling recourses of fossil fuel, increasing
environmental concerns, increasing energy price, increasing energy supply
security concerns, high cost and safety and security concerns regarding nuclear
power, indigenous, abundant, environment friendly, and decentralized nature of
renewable energy sources.
Talking about the potentials, he categorized it in four different types;
theoretical potential, available potential, technical potential, and economical
potential. The theoretical potential refers to the total amount of energy available
for extraction in a defined region without consideration of availability or
technological restrictions. For several energy forms such as solar, wind, and
wave the theoretical potential is therefore very huge. The available potential is
defined as the part of the theoretical potential that can be harvested easily
without causing impacts on the environment. The technical potential refers to the
amount of energy that can be harvested using existing technologies and thus
depends on the time point assessment. The economical potential refers to the
amount of potential that is economically viable by using currently available
technologies.
He explained the opportunities for renewable energy utilization in Pakistan
are that these energy sources can be used instead of fossil fuels for many
applications. Power generation sector (28.2%) is the major consumer of fossil
fuels. Wind energy, solar energy, hydropower and biomass energy can be
exploited for electricity generation instead of fossil fuel in the country. Electricity
requirements of the un-electrified rural households can be met through
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decentralized renewable energy systems. All these technologies except solar PV
are mature and economically viable in the country. Solar PV is expected to be
competitive to other power generation options by the year 2015. These
renewable energy sources have the potential to meet all the current and future
electricity requirements of Pakistan.
Finally he came up with the conclusion that Ethanol fuel could meet about
1% of the energy needs of the transport sector. Overall, renewable energy
sources could meet about 17% to 30% of the net energy needs of Pakistan by
2030. The exploitation of these technologies would reduce many of the current
environmental and economic problems as well as mitigate national energy
insecurity associated with the production cost and use of fossil fuels. The
planners and policy makers should formulate proper polices and guidelines to
promote RETs? for a more sustainable and secure energy system.

Dr. Vaqar Ahmed, Deputy Executive Director, SDPI, talked on Economics of
Energy Mix. He said that Pakistan is in a desperate need to implement an
integrated energy plan. He highlighted the key areas on which we need to focus
in order to overcome the growing energy crisis. He said that we need to
consolidate various ministries and departments dealing with energy sector in
Pakistan under one ministry or authority. Fragmented government is also one of
the major issues. He emphasized that provincial governments must be given
some role in order to reduce this crisis factor; similarly the capacity of regulators
in this area will need to be strengthened.
There must be some private investment in power, gas, hydro and coal
sectors in order to overcome this situation. He said that urgent reforms must be
done to deregulate pricing, generation and distribution. Private investment must
be there in order to reduce these factors. He said that prices should be regulated
with quality that is going in thermal power sector. There should be policy
regarding the renovation of thermal plants; by this we can get more energy. A
policy must be there to convert our oil into coal water slurry fuel and this can
reduce current 18 oil units to 8 units. He said that trade in energy sector needs to
be evaluated. Talking about the inefficiencies of existing plants and reduction in
transmission, distribution and administrative losses, he said that they can provide
a short term breather, however, in the longer run a deliberate effort will be
required for changing the energy mix away from expensive imported oil. Finally
he opined that: quick fix solution for circular debt may be for the government to
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take the existing burden on its books, after which energy sector entities may be
made available for private sector participation.

Dr. Gulfraz Ahmad, Former Secretary, Ministry of Petroleum and Natural
Resources, spoke on Least Cost Power Generation. He started his speech by
pointing out some of the strengths and challenges in the energy sector. One of
the main challenges, according to him, was low per capita energy consumption
besides that the cost for power generation was so high; there was a huge
shortfall in power and gas supply, power and gas theft and heavy losses caused
huge damage to the energy sector. Then he talked about different strengths i.e.,
Pakistan have gas based energy economy, we have country wide power and gas
infrastructure and the most important one is that strategically Pakistan is located
close to regional energy export sources in West and Central Asia.
He also talked about the issues in gas sector. He said that policy failure is
the main issue as energy sector has heavy reliance on gas and this is because of
the policy distortion. One of the factors is natural decline in the production of
energy fields. Projects like IP, TAPI, LNG and LPG, since early 1990, were
initiated but still these are in the process. He said that vision is already there but
implementation is the most important factor in order to overcome the energy
crisis. Our markets are not feasible; there are unattractive economic and financial
returns for the exploration companies. He further said that cost of generating
electricity can be minimized by optimal choice of technology of power plant and
its thermal energy, by the type of fuel that plant uses, by the size of plant to
exploit economies of scale, and by locating plants in relations to the center of
consumptions. He said that we should buy maximum capacity (90%-95%) from
efficient power plants to reduce per unit tariff to save power cost. He emphasized
that gas should be diverted from inefficient captive power plants to more efficient
IPPs which will add 40% more electricity from the same amount of gas. This will
also cut the cost of power. He further elaborated that efforts were being made to
acquire technology for economy of scales 1000 MW nuclear power plants that
would give a boost to power sector. In the end he concluded that conservation of
energy is a huge source of adding to energy supply; it could add over 20% to our
energy consumption within the present energy supply.

Session II Energy at Affordable Price: Evaluating Options
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Dr. Ehsan Ali, Head of Department, Centre for Energy System, NUST,
deliberated on Prospects of Biofuel. He opined that to meet the
consequences of fossil fuel depletion and maintain the continuous supply of
energy, Pakistan needs to set trends towards cheaper biofuel from locally
available feedstock and resources. Cost effective production of biofuel depends
upon the availability of cheap and sustainable raw material. Focusing on local
resources may lead us to establish new trends in the history of biofuel
contributing towards prosperity of the people of Pakistan. Pakistan has the
potential to utilize biomass/residual crops for energy purposes if it could be
managed at national level. Pakistan is exporting about 80% of available
molasses at very cheaper rates which can be used to produce fuel grade ethanol
by upgrading the possible facilities. In addition, the presence of 6.3 million
hectares of saline land in Pakistan is a big challenge and may be encountered to
contribute for the management of fuel and mitigating environment and economic
crisis by using algae cultivation at the expense of residual salts and saline water
for biofuel/biomass production. Pakistan has been suffering from a serious but
temporary energy crisis, he opined that it could be reversed in coming few years.
Even after recovery of the damaged energy systems and tracking to resolve the
energy related issues, there is a need of bioenergy/biofuel in Pakistan to
maintain the existing industrial and locomotive system. Pakistan needs biofuel for
self-sufficiency, prosperity and better climatic conditions. There are number of
issues regarding feedstock for biofuel which is always in conflict with the edible
oil crops and land utilization for fuel purposes. He further said that Pakistan has
the potential to produce Biofuel without creating any conflict with the edible crops
and fertile land utilization. In Pakistan, approximately 6.3 million hectares of
agricultural land is salt-affected. Almost all salt-affected area is underlain with
brackish ground water. In addition several more million acres in coastal areas
and in non-saline areas are also underlain with brackish water and unfit for
conventional agriculture.
Salt concentration in the soil does not allow any cash crop to grow
properly but algae have a natural potential to withstand high salt concentration as
in the saline lands. Through this strategy, salts in saline lands are likely to reduce
with cultivation of algae because utilization of salts by addition of organic matter
and other algal metabolites would trigger leaching of salts, possibly leading to
cultivation of cash crops after a few years. In addition to biofuel, biomass (animal
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feed) and Carbon dioxide so sequestered may be subjected to earn sufficient
carbon credits from the International Market.

Syed Shaukat Hasan, Director, Pakistan Atomic Energy Commission, talked on
Nuclear Power Generation: Challenges and Prospects. He said that energy
is the driving force for economy. Without a reliable and affordable supply of
energy, sustainable economic growth cannot be achieved, however, the
distribution of energy resources is not uniform globally which brings in the
concept of energy security. Energy security comprises 4 As i.e., availability,
accessibility, acceptability and affordability. The uneven distribution of energy
supplies among countries has led to significant vulnerabilities. To achieve energy
security, a country should try to exploit its indigenous energy sources, renewable
energy sources and diversify its energy mix so that there is no major dependence
on any one of the source. He further explained that most of the global primary
energy supplies are consumed for generation of electricity, the demand for which
is expected to keep on rising. The world electricity demand is projected to be
around 34, 000 TWh in 2035 almost double the 2010 figures while for
Pakistan it is projected to around 600 TWh almost six times the 2010 figures.
Talking about the energy scenario, he said that currently Pakistan is facing
severe energy crisis resulting in frequent electricity and gas load shedding.
Pakistan has scarce fossil fuel resources and is forced to import almost one-third
of its oil and gas to meet its energy needs. He said that renewables including
hydro, solar, and wind were also among the options for electricity generation.
During the year 2011-12, hydropower provided 29.0% of electricity in Pakistan.
Although, Pakistan has relatively high endowment of hydropower potential, only
6, 716 MW (12%) of the identified resources have been exploited so far. The
World Bank estimates that the worldwide electricity production comprised of 40%
coal, 19% gas, 16% nuclear, 16% hydro and 7% oil, while for Pakistan it was
35.8% oil, 33% hydro, 27% gas, 3.6% nuclear and 0.1% coal and 0.28%
electricity was imported in 2011.
He emphasized that in the current energy scenario; nuclear power can
play a vital role. Nuclear power is a safe, clean and reliable source of electricity.
Nuclear power has a key significance in providing base-load electricity and
minimizing imports of oil, gas and coal. It is essential to continue the
development of nuclear power, even at a modest pace, in order to develop local
capabilities and to meet Pakistans future electricity needs.
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He further explained that nuclear power generation contributed 4.9% to
the total electricity generation of Pakistan in year 2011-12. Pakistan has three
operating nuclear power plants (NPPs): KANNUPP (137 MW) at Karachi which
started commercial operation in 1972, C-1 & C-2 (325 MW each) located at
Chashma started commercial operation in 2000 and 2011, respectively. Two
nuclear power plants C-3 & C-4 (340 MW each) are under construction at
Chashma site. Talking about the Energy Security Plan of Pakistan, he said that
this plan as approved by the Government of Pakistan envisaged construction of
8, 800 MW nuclear power generation capacities by 2030. The target has now
been raised to more than 30,000 MW of nuclear power by 2050 to meet the
electricity needs of the country.
He said that Pakistan is currently facing a number of challenges to
increase the generation of nuclear electricity. These challenges are of two types:
internal and external. The internal challenges are due to current financial crisis
and yet to be fully developed indigenous industrial infrastructure. Nonetheless,
notwithstanding the financial crunch, the Government of Pakistan is fully
committed to provide the necessary finances for running the nuclear power
programme. The external challenges are the embargoes, sanctions and denials
regarding supply of nuclear equipment and components in some cases even
those which are related to the safe operation of nuclear power plants. The
Nuclear Suppliers Group (NSG) of which Pakistan is not a member does not
allow any civil nuclear trade with non-NPT member countries.
Talking about the opportunities for nuclear power generation in Pakistan,
he said that they are extensive and increasing. Nuclear power is one of the most
suitable options for base-load electricity production. Pakistan has invested
substantially in the nuclear sector during the past several decades. Rather than
sowing the seeds, now is the time to harvest the crop.
In the end, he concluded that the energy requirements of a progressive
and thriving Pakistan demand an aggressive investment of resources, financial
as well as technological, for nuclear power development. Pakistan has a solid
base of engineering and technology and time-tested human resource which can
handle the challenges and benefit from the opportunities which are available in
the nuclear arena. Notwithstanding the challenges associated with nuclear power
generation, there had never been such an opportunity in Pakistan, albeit due to
many reasons, for exploiting the benefits of nuclear power for sustainable growth
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of the country. Energy brings economic prosperity and nuclear power is one of
the major options to bring energy to Pakistan.

Dr. Shaheen Akhtar, Associate Professor, NDU, gave her presentation on
Hydel Power: Confronting Dwindling Resources. According to her, Pakistan
is currently facing a critical energy crisis which is resulting in frequent and long
power breakdowns, shutting down of industrial units, affecting economic growth
and creating social chaos and political instability. In 2011, World Bank report
estimated production loss to the economy is two percent of the GDP per annum,
and may be more. A recent report by the State Bank of Pakistan says, the peak
shortfall for the system of the Pakistan Electric Power Company (PEPCO) rose
from 2, 645 MW in 2007 to 8, 398 MW in 2012 which indicates a deepening of
the energy crisis in the country. It is estimated that the national demand of
electricity would keep on growing rapidly, at about 10% annually, owing to
growing population and economic activities. The energy crisis is generated by
variety of reasons, in particular, widening demand-supply gap, increased shift to
oil-based expensive energy mix, and lack of integrated energy strategy and
energy governance. Pakistan needs to diversify its energy options; rebalance its
energy mix with preference to cheaper energy sources; and improve energy
governance by fixing the management issues, increasing energy production
efficiency and conservation.
Hydropower is the cheapest and cleanest renewable source of energy.
Pakistan is endowed with rich hydro power potential of 60,000 MW which can be
tapped to meet its current and future energy requirements. She looked at the
potential of hydropower resources and hydropower development in the country
by examining various technical, financial, infrastructural and management
challenges that are impeding the optimum utilization of the hydro resources of
the country. She was of the opinion that the country needs to reverse the energy
mix in favour of hydropower, prioritize run of the river power projects and try to
remove all the hurdles in way of hydro development.
While there are many benefits, development of hydropower projects pose
numerous technical and economic challenges to the investor and developer.
Infrastructural constraints: projects are site-specific; sites are located in far-flung,
isolated and high-altitude areas lacking basic infrastructural facilities and
connectivity to transmission network. Detailed studies of topography, hydrology,
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site geology and engineering geological conditions are required. Hydropower
project thus involves high capital cost and long gestation period.

Mr. Ejaz Ahmad Khan, Secretary, Coal and Energy Development Department,
Sindh, spoke on Power Generation from Coal. He said that energy plays an
important role in industrial and economic growth of nations. He explained that
power production through furnace oil is costly and coal being cheap, abundant
and safe seems to be the prime candidate as it caters to over 40% of the worlds
power generation and is increasing day by day specifically in developing
countries. He said that according to the survey of World Energy Outlook (WEO),
future energy demand in emerging Asian countries will increase by 60% in 2020
as compared to 26% in 1980.
He emphasized that Pakistan faces a number of critical challenges in
energy sector and realizing these challenges, the Governments of Sindh &
Pakistan are focusing on the huge potential of developing indigenous coal
resources on fast-track basis and put coal-based power as a major portion in
overall energy mix. Coal resources in Sindh, particularly Thar Coal, form an
integral part of this planning. The current energy supply matrix is a composite of
various technologies. Oil and gas form the bulk of primary commercial energy
supply mix of Pakistan, contributing in the following ratio. Oil: 37%, Gas: 30%,
Coal: 0.1%, Hydroelectricity: 30% and Nuclear electricity: 1.8%. He said that oil is
an extremely expensive mode of developing energy and is depleted at a very
rapid speed. Moreover, its import is a heavy burden on the exchequer.
He said that coal-based power generation can provide considerable
contribution to local economic development including monetary benefits to the
province, the development will generate direct and indirect employment, the mine
and power development will require infrastructure, such as roads, rail, water,
power, and communications networks, all of which will be shared under
agreements with the local non-mine and non-power related users. This project
will play an important role in the reduction of circular debt through cheap
electricity; and by this, we can save US$ 250 Million per annum. In the end, he
said that this project can transform the Pakistan economy and bring in economic
sustainability but there must be some real and effective energy policy.

May 16, 2013 (Thursday Day II)

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Session III Governance and Legislation
Barrister Aemen Maluka, Advocate High Court, gave her presentation on
Legislation for Energy Conservation. Ms. Aemen Maluka started her
presentation by linking economy and law. She said that one cannot
make/regulate laws or economic principles in isolation. Regulation is basically
dictated through economics. She stated that energy efficiency has risen to the
top of the law and policy agenda during the past one decade, in many countries,
including Pakistan. However, in the case of third world countries where there is
rampant corruption in the energy sector, including the problem of electricity theft
and abuse, the assessments of its potential benefits vary widely. Through the
example of Pakistani law and policy, she looked at what the current energy
consumption trends show. Based on these, she sought to explain, what have
been the public sectors priorities in addressing the energy shortage. Ms. Maluka
opined that Pakistans energy conservation policy-makers and legislators,
particularly those who were reviewing and constructing the regime for
environmental taxation based on the very much-overrated Pigouvian taxation
theory,

needed to take another look at the current legal framework that aimed at
promoting energy conservation. Also, it needs to be seen that Pigouvian taxes
may not be the best solution for Pakistans political and legal environment even
though they may have, in the past, produced the desired results in many Western
jurisdictions.
Taking the case of Pakistan, she said that the continuity in environmental
policy and stability in the tax policy had suffered because the overall plan for
energy independence had followed the civil paths. With the example of
ENERCON, in the case of Pakistan, the competing rather conflicting and
contradictory politicized agenda have counter-added the intended effectiveness
of tax credits and incentives programs for energy efficiency. In the oil and gas
sector in Pakistan, the tax credits and incentives have come and gone due to
policy disruptions, nominal actions and competing policies. To elaborate it
further, she said, it is important to discuss the general principles behind
Pakistans environmental policies and the regulatory principles. Ms. Maluka with
reference to tax policy of Pakistan stated that it has potential impact on the socio-
economic and consumer demand. She said that there is also need to discuss the
fuel economy within Pakistan and the tax and environmental agendas.

A special tax that is often levied on companies that pollute the environment or create excess social costs, called
negative externalities, through business practices. In a true market economy, a Pigouvian tax is the most efficient and
effective way to correct negative externalities.
16
Unfortunately, we have done little about it i.e., to promote the technical aspects
of it through regulation.
Ms. Maluka then emphasized on the current proposed energy
programmes and legal energy policies of Pakistan that are blatant in regard to
fundamental environmental norms. The law states that energy conservation is
more effective than energy generation. She gave historical background of
ENERCON that it was established in 1980s with the US technical and financial
assistance and principally the organization has aimed to legislate through this
law of conservation but it has not been able to do well in Pakistan due to political
and economic pressure which have emerged in the last few decades. At the
same time, there is a growing public and private apathy towards the subject of
energy conservation. The ENERCON Bill of 2013 has some interesting upcoming
provisions that a council must be established that can have a suitable structure
or mechanism for the implementation of this act. The Bill aims for the
enforcement of effective energy standards, incentives, fines and other related
requirements under this act. The council has also been given power for collection
of taxes but it has become a constitutional issue with the regulatory authorities
like PEMRA etc. The private sector and third parties are also challenging this fine
and taxation system. Ms. Maluka also discussed about the purpose of Pakistan
Energy Conservation Council (PECC) that aims to promote effective use of
energy and conservation of Energy in Pakistan. The council is making effort to
remove ambiguities related to power and energy allocation and about the
collection of energy taxes and fines.
While concluding her presentation, Ms. Maluka opined that Pakistans
energy sector will not work or progress unless the improved infrastructure is in
line with the regulations.

Advocate Ameena Sohail, Senior Associate IPS, talked on Impact of 18
th

Amendment on Energy Generation. Speaking about the Spirit of 18
th

Constitutional Amendment, she said that energy sector was broadly divided into
power and hydrocarbons. Both had different legislative structures prior to 18
th

amendment. Elaborating the text provisions of the 18
th
amendment related to
energy generation Ms. Ameena explained the Article 157 related to electricity
which stated that the Federal Government may in any province construct or
cause to be constructed hydroelectric or thermal power installations or grid
stations for the generation of electricity and lay or cause to be laid inter Provincial
17
transmission lines shall consult the Provincial Government concerned and in
case of any dispute between the Federal Government and a Provincial
Government in respect of any matter under this Article, any of the said
Governments may move the Council of Common Interest (CCI) for resolution of
the dispute. She said that the electricity is now shifted to part II of the Federal
legislative list.
Advocate Ameena also discussed the impact on exploration and
production of Hydrocarbons (Oil& Gas). She threw light on the Article 172 on the
ownerless property which has given joint ownership rights to federal and
provincial government under 18
th
amendment. About the Article 161 related to
Natural gas and Hydro-electric power, she said that before the 18
th
amendment,
natural resources especially mineral oil and natural gas being part of the Federal
Legislative List were exclusively owned and regulated by the Federal
Government. She criticized the Article 161 by stating that Article 161 is silent as
to the treatment of royalty on crude oil, which would hence be dealt with in
keeping with the provisions of the revised Article 172(3) and be shared equally
between the Federal Government and the Provinces. The case of natural gas
should also be treated in the same manner and Article 161 should be
appropriately amended. The legislative, regulatory, institutional and policy control
should remain with the Federal Government as per the existing institutional
framework and all institutions; public sector entities and regulatory authorities
should continue to operate as before. She said that missing links should be
plugged and regulatory functions should be overhauled and developed for the
promotion of an integrated energy sector.

Dr. Nazir Hussain, Associate Professor, QAU, presented his paper on
Diplomacy and International Dimension of Energy Management. Dr. Nazir
Hussain started his presentation by focusing on the serious energy crisis which is
likely to aggravate in the coming years. He said that the under-production,
inefficiency, mismanagement and lack of a coherent national energy policy have
severely undermined Pakistans ability to cope with the challenging situation.
However, there are few internal and external options which can be utilized to
address its short-term energy needs and formulate long-term energy
requirements. He proposed four trans-regional pipeline options: overland Iran-
Pakistan (IP) Gas-Pipeline, overland Turkmenistan, Afghanistan, Pakistan, India
(TAPI) Gas-Pipeline, underwater Qatar-Pakistan Gas-Pipeline, and imported
18
Liquefied Natural Gas (LNG) through the sea. But each option is studded with
multiple challenges such as the US opposition to IP, Afghan security issue with
TAPI, expensive cost of Qatar-Pakistan pipeline, and heavy cost of LNG import.
Dr Nazir while speaking on the Pakistans energy scenario stated that
Pakistans electricity demands are mainly met through hydel production as the
country was blessed with abundant water resources and the two major dams
built in early 1960s; Terbela and Mangla. However, the unplanned growth of
industry and massive use of gas for commercial and transport purposes led to
the over-reliance on gas. Subsequently, the electricity generation was also
converted to thermal, which increased the production cost of electricity being met
through government subsidies. In the absence of a national energy policy, the
demand and supply gap continued to increase with no substantial alternatives.
Political controversies over building of new dams, massive reliance of industry on
gas, un-planned growth of CNG for transport, and substantial theft/line-losses led
to the massive demand-supply gap. This has resulted in massive electricity and
gas load-shedding which has not just hampered the everyday life of Pakistani
citizens but has also severely affected economic growth and political stability.
While discussing the available energy options for Pakistan, the speaker
said that Iran, crippled by the sanctions in place and fearing further sanctions, is
desperate for the IP pipeline to be completed. Other than the economic benefits
that Pakistan can acquire from IP, the most significant benefits however can be
achieved if the IP becomes IPC; the Iran-Pakistan-China pipeline. India backed
out, presumably under the US pressure and also its own distrust of Pakistan.
TAPI project is expected to generate 2000 MW of electricity for energy-starved
Pakistan, besides earning transit fee from India. This project would not only
substantially reduce Pakistans energy demands but could also become an
important economic dynamic for bridging Indo-Pakistan rivalry. Despite TAPIs
economic potential and commercial viability, the project faces a number of
challenges. Although the US is pushing for the project and India is a willing
partner, it is the Russian Federation that is opposed to the project mainly
because it would like to transport the Turkmenistan gas to Europe through its
own territory thus keeping a check on the Central Asian energy resources,
besides benefiting economically. Another important bottleneck is the instability
and insecurity in Afghanistan, which is likely to aggravate after 2014, in the post-
withdrawal period. Moreover, the project is still being considered as a
pipedream as the project has not yet been kick-started. Similarly Gulf-South
19
Asia/Pak-Qatar Gas Pipeline is blessed with the US approval as its company is
technically involved, besides the Qatari company ready to finance the project, the
proposed project is costly due to its under-water route. It is estimated that an off-
shore pipeline has, at least, twice the cost of an overland pipeline. Therefore, the
project is still on the paper, and no substantial progress is being witnessed. Yet
another option being considered is to import liquefied natural gas (LNG) from
Qatar to Pakistan with potential to include China and India at later stage.
However, natural gas transported through overland or undersea pipeline in its
natural state or as LNG in oil tankers is a costly affair.
Concluding the presentation, Dr. Nazir stated that out of the four external
options available to Pakistan, only one, the IP gas pipeline project, is without the
regional/international cooperation. In the remaining three options, the financial
support, investment opportunities and international cooperation are available.
Therefore, Pakistan has bright chances to fast-track the available options by
involving other regional/international stack-holders but that requires a proactive
diplomacy. He argued that a land-based pipeline would be four times cheaper
than any other option. Therefore, the first and foremost priority should be to work
on the overland pipelines like IP and TAPI, and later to also include GSUSA and
LNG. And lastly in order to meet the massive demand of energy, a coherent
national energy policy is required that should cover effective management, short
to long term planning, tapping of additional local energy sources, building of new
dams and fast-track working on regional pipelines.

Mr. Muhammad Mustansar Billah Hussain, ARO, IPRI, spoke on Role of
Universities and Think Tanks in Energy Conservation. Mr. Mustansar Billah
started his presentation by introducing the basic concept of energy conservation.
He said that energy conservation is a way of reducing energy consumption
through economy, elimination of waste and rational use. It also refers to efforts
and steps taken to reduce the use of energy. It can be done through judicious
use of energy, efficiency enhancement, and curtailing the consumption by
minimizing the need of energy. He highlighted the importance of energy
conservation for Pakistan as energy has a credible role in national building and
development. Globally, the appeal for energy conservation is gaining popularity
and there is an urge for energy conservation for energy security. In the context of
Pakistan, energy conservation is important because we have fossil fuel
dominated energy supply, which is a costly business. Moreover, there is low
20
reserve/ production ratio of indigenous fossil fuels (oil and gas). With the rising
demand for energy in the country, unfortunately there is a very low capital
investment in energy generation projects particularly alternative energy
resources and slow progress in alternative energy spectrum.
Moving further on the subject, the speaker emphasized the role of
Pakistani universities and think tanks for the energy conservation. He discussed
four major types of universities in Pakistan: Sciences, Engineering &
Technological Universities, Agricultural Universities, IT & Administrative Sciences
Universities and Social Sciences Universities. He explained the role of
Engineering Universities that: by designing energy efficient buildings, curtailing
consumption on lighting through building designs, insulation material, and
peculiar specifications for different climate regions in the country, these
universities can facilitate conservation of energy. Speaking about the Agricultural
Universities, he said that energy can be conserved by promoting irrigation
technologies that use less water; hence there would be less energy consumption
for pumping underground water. The IT and Administrative Universities may
contribute by designing software which could contribute in energy conservation
using occupancy sensors and daylight sensors. These universities can also
make software for weekly and monthly energy audits.
Social sciences universities could cultivate a sense of responsible use of
energy by promoting a replica of Setsuden Spirit electricity conservation
national movement in Japan. Mr. Billah also gave examples of Boston University
which has reduced 9% of its energy consumption since 2005 and example of
MITEI (MIT Energy Initiative) which has saved energy worth over US$4.5 million
per annum during 2007-2012. He also mentioned about the Think tanks
specializing on energy security that can also play vital role in the energy
conservation through conferences, research and publications and by organizing
workshops and symposiums in order to train people from industry, media and
general public.

Session IV Energy Conservation through Infrastructure Efficiency

Mr. N.A. Zuberi, MD Private Power and Infrastructure Board, deliberated on
Private Power Generation and Infrastructure. Mr. Zuberi started his
presentation by highlighting Pakistans economy which has historically been
marred by power shortages and has remained one of the chronic problems
21
hampering socio-economic growth of the country. He said that the phenomenon
of load-shedding was first experienced by the nation in the early nineteen
eighties and since then the country has been facing acute power outages from
time to time. Back in the eighties, the electricity demand for Pakistan was
progressively increasing at an estimated rate of 7-8 percent per annum but the
required capacity additions in the national grid could not be matched with the
same pace. This situation called for immediate intervention by the Government of
Pakistan (GoP) through adoption of policy measures aimed at massive resource
mobilization for investment in the power/energy sector. In 1985, Government of
Pakistan developed a long-term strategy for attracting multinational investment
for construction and operation of electric power generation facilities. The
objective of the energy strategy was to implement a plan that cultivates an
atmosphere conductive to high-level electricity generation growth without
straining the governmental resources. The key features of that policy were
establishment of the Private Sector Energy Fund (PSEDF) for financing the
private sector power projects.
The speaker then discussed about the creation and objective of Private
Power and Infrastructure Board (PPIB) that was created in August 1994 as a
one-window facilitator on behalf of GoP and its Ministries/Departments to
promote private investments in power sector. It received statutory status on 6
th

March 2012 through an Act of the Parliament. It monitors progress of
development/operation of IPPs. It also provides support to Ministry of Water &
Power, Provinces/AJ&K in technical, financial and legal matters and
coordinates/liaises with local and international multilateral development/Financial
Institutions. The speaker also mentioned about several power and infrastructure
policies processed such as Power Generation Policy 1994 (besides 1292 MW
HUBCO project which was processed prior to 1994 Power Policy); Hydel Policy
1995; Transmission Policy 1995; Policy of Private Freight Train Operations;
Power Generation Policy 2002 and Policy for Power Co-Generation by Sugar
Industry January 2008.
Mr. Zuberi also stated that PPIBs proactive approach towards enhancing
power generation capacity through private sector on urgent basis is not being
matched/reciprocated by other stakeholders. The slow tariff determination by
NEPRA has negative impact on IPPs. Similarly, lack of sufficient infrastructure
for hydro and coal projects and other issues related to land acquisition issues,
Inter Provincial issues for hydropower projects and Law & Order situation in
22
northern region are also adversely affecting the power sector. He also talked
about the dire need for the establishment of two mega imported coal based and
local coal based power projects in order to fulfill the future demand and supply
requirements of the country.

Mr. Salman Qaisrani, Director, CWS Technologies, talked on Grids and
Infrastructure: CWS Combustion Technologies. Mr. Salman Qaisrani
highlighting the significance of coal and stated that despite mounting concerns
over regulatory supply and quality risks, Pakistani coal sector remains under
limelight as an attractive option. Pakistan remains one of the worlds largest coal
reserve countries with indicated coal reserves of 185, 000 Million Metric Tons.
About 80% of Pakistani coal reserves fall under low/medium rank coal, such as
lignite and sub-bituminous coal. However, coal has one or two disadvantages;
among those are its mineral content, especially the sulfur bearing component,
and the problems in handling and storing of coal, such as dust and the need for
expensive mechanical handling and reclamation systems. However, coal is
abundant, widespread, and fairly cheap to produce; while oil reserves are much
smaller and are concentrated in politically unstable areas, and the commodity
can become very expensive. Therefore, utilization of coal as primary feedstock
for power generators will still remain a high priority option in the future. Mr.
Qaisrani also highlighted the environmental hazards of dry coal burning such as
dangerous emissions of gases like NOX, SOX, CO2, acid rain, greenhouse effect
etc.
He focused on the basic concept, history and usage of Coal Water Slurry
(CWS). He explained that CWS is an environment friendly coal based liquid-Fuel
that can be used to replace petroleum. It is prepared through a technical process
by blending 65% to 70% coal with 29% to 34% water, and minor (1%) quantities
of chemical additives. CWS is slurry of powdered coal and water, which
maintains a stable state over a long period when a small amount of additive is
provided properly. It was initially developed in Russia about 80 years ago and
developed in 1950s in Europe. Low oil prices and huge oil reserves discovered
led to a complete stagnation in CWS development. In 2000, the program was
started in China to meet the Beijing Olympics environmental challenges. Mr
Qaisrani emphasized on the advantages of CWS such as: CWS is a viable
source of energy both at generation & grids; less infrastructure cost; CWS can be
made by using low quality coal and is most suitable for local indigenous coal;
23
capital investment costs is very low relative to coal gasification and liquefaction
processes, which can be more than US$6.5 billion for a
100, 000 BPSD complex, as compared to US$150 million for CWS of the same
size; and CWS has high combustion efficiency and is low in pollution discharge.
He said that successful introduction of CWS technology into the industries,
in China, to replace heavy fuel oil has made a very significant impact in the
utilization of low rank coal, for new 100 Thermal Power Plant. Simultaneous and
parallel development of advanced coal cleaning technologies as in the case of
CWS could allow Pakistan to make a fast transition, economically, away from our
limited resource of oil and natural gas to our most abundant resource of coal.
Moving further the speaker discussed how coal based CWS will be the
fuel of this century and beyond. The comparison of Pakistani coal specification
with the limits of coal as allowed for usage in CWS combustion technology shows
that local Pakistani Coal is ideal for usage in CWS Combustion Technology. The
combustion efficiency of CWS is 96%-99%, combustion temperature of CWS is
approximately 1200 to 1300 degree C.

Concluding Session National Energy Vision 2030
Presenting Energy Vision 2030 on the concluding day of the conference Dr.
Shaukat Hameed Khan, Vice Chancellor, Sir Syed-CASE Institute of
Technology, Islamabad, said that modern economies are based on cheap
carbon-based energy and we are no exception. Energy and consumption go
together. Energy policy evolution is shared both by the governments and
consumers. We have deliberately ignored the energy factor in our economic
growth. We need energy to fuel our economic growth. As far as coal is
concerned there is huge issue of massive mining as mining in Pakistan is in its
terrible state. We do not do large scale mining at all and nobody knows how to
mine it properly. Turkey last year mined 50 million tons of coal. This is called
large scale mining. Though he favoured coal based energy but since mining of
Thar coal could take long Pakistan should import coal for immediate use in place
of diesel and furnace oil. He said that Pakistan is probably the only country in the
world where household tariffs are lower than commercial and industrial rates.
Rates should not vary that much. This is something that we have to change in
Pakistan as it would promote efficient use of energy in homes and resultantly we
would see energy conservation.
24
Dr. Khan warned that there were no easy and quick solutions to the power
shortage problem being faced by the country as there was grave dichotomy at
the policy base, the planning commission had been overshadowed by the finance
ministry, and absence of continuity had deprived the concerned authority of
institutional memory. On top of that fuel needed for energy generation as well as
funds to pay the enormous circular debt were in short supply. The energy system
was not attuned to technology which determined the demand supply equation.
On regional energy grid, he said that the IP and TAPI pipelines seem vulnerable
due to the involvement of more than two countries. There were home grown
solutions available and coal above every other resource offered a natural option
but planners had been neglecting these for over three decades now. Again we
have been unable to formulate energy pricing for many years. Unless the new
government harmonized the fragmented governance in this respect, it would be
hard to end power outages anywhere in the near future. He estimated the
country would need US$210 billion in the next 20 to 25 years to meet the growing
energy needs.
Renewable energy is beneficial and can be a solution but only for long
term; and it (solar, wind, tidal) does not offer base load as we need electricity
24/7 whereas renewable energy does not offer this. The problem is we dont
take/collect data; we need to start wind and solar profiling in Pakistan on every
single minute basis the whole year.
He gave a comprehensive comparative cost benefit analysis of nuclear
power generation and concluded that nuclear power generation is one of the
viable options for Pakistan. He said that though western countries are moving
away from nuclear power generation, Asian counties are projecting a
phenomenal growth rate over the coming decades. China and South Korea are
producing nuclear power at one third to one fifth the cost as compared with
western countries. Cheap labour and different industrial approach are
contributing factors toward lowering of cost. Unless indigenous supply of cheap
gas is assured, nuclear power generation presents the next cheap and long term
solution, beside hydel power. Nuclear fuel is cheap and does not throw up
volatile fluctuations like oil. Moreover, cost of nuclear fuel is a small fraction of
the overall cost. Though setting up of nuclear plants need initial heavy capital
investment and it takes about 48 months to come on line, these plants have long
operational life of 80-100 years. Once the initial cost is properly sunk in, which is
a long process, nuclear power plants virtually become cash machines.
25
He recommended that Pakistan should gradually reconfigure its energy
mix to reduce dependence on costly thermal fuels like furnace oil, and move
toward greater reliance on water, coal and nuclear fuel.

Conference Recommendations
Deliberations during the conference brought forth a number of recommendations
which are summarized below:
The energy crisis is a serious challenge that requires serious and sustained effort
on part of the Government. There can be no quick fixes. It would require short
term, medium term and long term measures as well as some hard policy
decisions.
It is imperative to improve governance in order to formulate power policies based
on merit rather than vested interests, check power theft, ensure full revenue
recovery, and curb corruption.
A well deliberated, clearly articulated and sustainable policy based on least-cost
options is the foremost requirement.
Circular debt is by far the most serious problem that needs to be addressed on
urgent basis. One possible solution to deal with circular debt is through creation
of a circular debt retirement fund under an organization. The fund could be
financed by a consortium of banks and financial institutions under guarantee of
the government.
Cost of generating electricity can be minimized by: optimal choice of technology
of power plant and its thermal efficiency; type of fuel that the plant uses; size of
the plant to exploit economy of scales; and location of plant in relation to the
centres of consumption.
Across the board subsidies are never a good policy option. Such subsidies not
only result in wasteful use of valuable resources but also put unnecessary
burden on other consumers and the public exchequer.
Pigouvian taxes may not be the best solution for Pakistans political and legal
environment even though they may have, in the past, produced the desired
results in many Western jurisdictions. In this context a policy review is warranted.
18 Amendments touched upon electricity in a cursory manner, leaving behind a
number of lacunas. However, the CCI, could manage the affairs through a pro-
active approach.
Provincial governments should generate energy and start building power plants
on their own.
26
Renewable energy sources can be used instead of fossil fuels for many
applications. Wind energy, solar energy, hydropower and biomass energy can be
exploited for electricity generation instead of fossil fuel in the country. Overall
renewable energy sources can meet 17 to 30 % of Pakistans energy needs by
2030. However, the basic criteria should be its economic viability. It would be
foolhardy to generate expensive electricity through these means if other cheaper
options are available.
Pakistan is blessed with rich hydro power potential of 60,000 MW which can be
tapped to meet its current and future energy requirements. It would be worthwhile
to de-link energy generation from irrigation and focus on run of the river projects.
A well planned policy shift should be made to correct the energy-mix by shifting
our focus from oil-based thermal power to hydel and nuclear power.
Pakistan must work expeditiously to complete all non-controversial hydel projects
such as Dia Mir Bahsa, Dasu and Bunji Dams etc. Run of the river projects
should be prioritized as they are relatively cheaper; take less construction time
and are environment friendly.
Vigorous and cost-effective measures should be taken for promoting the use of
micro-hydel, wind and solar energy at the household level and in off-grid remote
areas.
Pakistan must make use of the sugarcane molasses for making bio-fuels. At
present around 2 to 2.5 million tons of molasses is being produced in Pakistan.
However, 80% of the molasses is being exported at nominal price. There is a
need for policy reversal in this context.
There are around 6000 bio-gas plants in Pakistan but their production cost is
high, as presently decomposition is being done through slow natural process, if
some catalyst is used the process would become cost effective.
In the current energy scenario, nuclear power can play a vital role. Nuclear power
is a safe, clean and reliable source of electricity. Nuclear power has a key
significance in providing base-load electricity and minimizing imports of oil, gas
and coal. It is essential to continue with the development of nuclear power, even
at a modest pace, in order to develop local capabilities and to meet Pakistans
future electricity needs.
The area near Gadani, Balochistan, is suitable for coal project with potential of
producing 4000 MW. There is ample land available with very low population
density. The environmental impact of the imported coal project at this location
27
would be minimal. An Ultra Mega Power Park of at least 3600 MW may be built
there.
Coal Water Slurry (CWS) is a new type of liquid fuel that can, to some extent,
replace petroleum as fuel in the energy conversion and process industries. It also
has less infrastructure cost and high combustion efficiency.
In order to meet the massive demand of energy, Pakistan has four external
options: the Iran-Pakistan (IP) gas pipeline, Turkmenistan-Afghanistan-Pakistan-
India (TAPI) gas pipeline, Pak-Qatar gas pipeline project and import of Liquefied
natural gas (LNG). Out of these options, only the IP gas pipeline project is
without the regional or international cooperation. For the remaining three options,
the financial support, investment opportunities and international cooperation are
available. Therefore, Pakistan can fast-track the available options by involving
other regional, international stake-holders through a proactive diplomacy.
Direct electricity purchase agreements may be concluded with neighbouring
countries on the pattern of Central Asia South Asia Electricity Trade and
Transmission Project (CASA 1000), while keeping the primary focus of
purchasing the commodity at affordable price.
Conservation of energy is a huge source of adding to the energy supply. It aims
at bringing the existing energy into efficient use by eliminating wasteful internal
use, minimizing losses and theft and reducing the energy intensity. By a broad
estimate we could add over 20% to our energy availability through conservation.
Steps should be taken to educate the public in power conservation by launching
media campaigns against electricity wastage. Universities, think tanks and media
can play an important role in energy conservation through innovative concepts
and public awareness.
Energy efficiency in buildings can be improved by incorporating design related
best practices appropriate to our environment, coupled with traditional materials,
technologies and craftsmanship. An energy efficient building could reduce annual
energy bills up to 40%.
Rebalancing in energy mix with increased focus on hydroelectricity and nuclear
power generation offers a way out of energy crisis.
Public-private partnership in hydropower sector should be reinvigorated. This will
help in raising financial resources for these projects.
Political consensus on the big hydro projects should be developed.
The formation of a single ministry in charge of the entire energy sector, the
formulation of a long-term integrated policy and complete autonomy to regulators
28
coupled with intense drive to increase public awareness about energy
conservation offer a way out.
In Pakistan, approximately 6.3 million hectares of agricultural land is salt-
affected. Salt concentration in the soil does not allow any cash crop to grow;
however, this type of land can be utilized for growing algae for biofuel production.