Pakistan

Energy Crisis:
An Overview
 Contents

 Power Sector Highlights

 Pakistan Energy Stats
 Causes of Power Crisis
 Circular Debt Issue
 GoP’s Initiatives for the Power Sector/Sectoral Recommendations
 VTT’s brief Portfolio
 The Power sector was restructured in 1998 with the
creation of PEPCO (Pakistan Electric Power
Company)…
 Water & Power Development Authority’s (WAPDA) Energy Brief Description
has been structured into distinct corporate Sources
entities comprising of 4 GENCOs, 10 DISCOs
and one TransCO (NTDC). Thermal Thermal power generation stands at 8,300MW but the
 These 10 DISCOs are responsible for distribution to thermal plants have low conversion efficiencies and are
the end users. expensive to maintain/operate. Most of the thermal
 KESC meets its overall demand with its own power plants installed by IPPs, use furnace oil which
generation plus purchase from NTDC, IPPs and from has become very expensive over the recent past.
Karachi Nuclear Power Plant. The Current structure
of the power sector is: Hydro Only 34 % of total electricity generation is achieved
Power thru hydro power. Currently we are producing 6555 MW
against the potential of 41000 to 45000 MW
Wind Pakistan has a potential of producing wind energy
ranging from 10000 MW to 50000 MW, yet power
generation through wind is in initial stages in Pakistan
and currently only a plant of 06 MW capacity has been
installed in first phase in Jhampir by a Turkish
company and 50 MW will be added shortly.
NATIONAL
TRANSMISSION Solar Pakistan has a potential of more than 100,000 MW from
& DESPATCH solar energy. Building of solar power plants is underway in
COMPANY Kashmir, Punjab, Sindh and Balochistan.
Agricultur Pakistan has planned to generate 10 MW of electricity
al biomass from municipal waste in Karachi followed by similar
/Biodiesel projects in twenty cities of the country
Nuclear Pakistan’s nuclear power generation has a capacity of
425 MW, but there are plans to increase this
capacity substantially.

Source: An Overview of Electricity Sector In Pakistan, Islamabad chamber of commerce & industry
Key Abbreviations: GENCO ( Generation Companies DISCOs ( Distribution Companies) and IPPs(Independent Power Plants)
 Power Generation Statistics…

Thermal Power Hydro Power Nuclear Power

Power Installed Power Installed Power Installed
Producer Power Station Capacity Producer Power Station Capacity Producer Power Station Capacity
WAPDA Thermal Power Station, Muzaffargarh 1350 MW WAPDA Tarbela 3478 MW PAEC KANUPP 137 MW
WAPDA Thermal Power Station, Guddu 1655 MW WAPDA Mangla 1000 MW PAEC CHASNUPP 300 MW
WAPDA Thermal Power Station, Jamshoro 850 MW WAPDA Ghazi – Barotha 1450 MW PAEC CHASNUPP 300 MW
WAPDA Thermal Power Station, Larkana 150 MW WAPDA Warsak 243 MW PAEC KHUSHAB 50 MW
WAPDA Thermal Power Station, Quetta 35 MW WAPDA Chashma 184 MW
WAPDA Thermal Power Station, Pasni 17 MW
KESC Thermal Power Station, Korangi 316 MW
WAPDA
WAPDA
Dargai
Rasul
20 MW
22 MW
Steam Power
KESC Thermal Power Station, Bin Qasim 1260 MW
WAPDA Shadi-Waal 18 MW
IPP Hub Power Project 1292 MW WAPDA Steam Power Station, 132 MW
WAPDA Nandi pur 14 MW
IPP AES Lalpir Ltd, Mahmood Kot 362 MW Faisalabad
WAPDA Kurram Garhi 4 MW
Muzaffargar
IPP AES Pak Gen, Mahmood Kot 365 MW WAPDA Renala 1 MW

IPP
Muzaffargar
Altern Energy Ltd, Attock 29 MW
WAPDA
WAPDA
Chitral
Jagran (AK)
1 MW
30 MW Wind Power
IPP Fauji Kabirwala Power Company, 157 MW WAPDA Khankhwar 72 MW
Khanewal WAPDA AllaiKhwar 121 MW FFC Energy Jhimpir 6 MW
IPP Gul Ahmad Energy Ltd, Korangi 136 MW Kalabagh 3800MW
IPP Habibullah Coastal Power Limited 140 MW Bhasha 4600mw
Solar Power
Future
IPP Japan Power Generation, Lahore 120 MW Projects Bunji 5400MW
IPP Kohenoor Energy Limited, Lahore 131 MW Dasu 3800MW
IPP Liberty Power Limited, Ghotki 232 MW Building of solar power plants is underway in Kashmir,
IPP
IPP
Rousch Power, Khanewal
Saba Power Company, Sheikhupura
412 MW
114 MW
Gas Punjab, Sindh and Balochistan.

IPP Southern Electric Power Company 110 MW

Limited, Raiwind WAPDA Gas Turbine Power Station, 59 MW
IPP Tapal Energy Limited, Karachi 126 MW Shahdra
IPP Uch Power Limited, Dera Murad Jamali, 586 MW WAPDA Gas Turbine Power Station, 244 MW
Nasirabad Faisalabad
IPP Attock Gen Limited, Morgah Rawalpindi 165 MW WAPDA Gas Power Station, Multan 195 MW
IPP Atlas Power, Sheikhupura 225 MW WAPDA Gas Turbine Power Station, 174 MW
IPP Engro Energy Limited, Karachi —– MW Kotri
IPP Kot Addu Power Company Limited 1638 MW WAPDA Gas Turbine Power Station, 39 MW
(Privatized) Panjgur
IPP Saif Power Plant Qadirabad, Sahiwal 225 MW KESC Gas Turbine Power Station, 80 MW
IPP Sitara Energy 80 MW Korangi Source: PPIB, Ministry of Water &
IPP Nishat Chunian Power 200 MW Power, Alternate Energy
KESC Gas Turbine Power Station, 100 MW
IPP Nishat Power Limited 200 MW development board
SITE
 Due to rising demand, power infrastructure
issues, and poor governance severe electricity
shortages have ensued …
 Power outages have led to Historic Demand and Supply situation in Pakistan
widespread rolling blackouts that have
paralyzed industry and led to major civil
unrest.
 As of June 2013, the electricity demand
stood at about 11,000MW against
generation of about 8,000MW. As a
result, the utilities were resorting to about
10 hours of load-shedding per day across
the country.
 This acute energy crises in Pakistan has its
roots in the following causes, namely;

 Lack of Integrated Energy Planning & Demand Forecasting and Crisis having direct impact on
ROOTS OF PAKISTAN’S

absence of central & focused entity responsible for the Energy

Sector  48.4% decrease in FDI as
ENERGY CRISIS

compare to last year

 Circular Debt.
 Closure of Industries resulting in
 Imbalanced Energy Mix with heavy reliance on gas (47.5%) and Oil
Unemployment (According to
(30.5%) (72% imported)
the labor department sources,
 Non-utilization of vast indigenous resources of Thar Coal and Hydel
approx. 800,000 labors have
potential lost their jobs )
 Lack of effective project structuring, planning and implementation  Agriculture land irrigation
of identified and viable projects  Household s, schools and
 Transmission, distribution loses/theft hospitals
 Inadequate revenue collection by DISCOs
Source: http://en.wikipedia.org/wiki/Energy_policy_of_Pakistan
The Cause and Impacts of power sector circular debt in Pakistan – Planning Commission/USAID
ICCI Electricity Report
A NEW ENERGY MIX FOR PAKISTAN-EMR Consult
 One of the foremost reasons for Pakistan’s Energy crises
is the Circular Debt Issue that needs immediate
remedies…
Primary Causes 2010 2011 2012 Circular Debt is the amount of cash shortfall within
(Billion Rs.) (Billion Rs.) (Billion Rs.) the Central Power Purchasing Agency (CPPA)
Reserve Debt (start of year) 235.65 365.66 537.53 that it is unable to pay to the power supply
Non-Collection of DICSOs Receivables from: companies.
Federal Govt. 1.79 1.57 0.19

FATA (78.34) 4.30 13.42 Circular Debt Primary Reasons

Provincial Govts. 16.72 36.07 15.84
 Result of the difference between the actual cost
AJK Govt. 2.00 5.50 6.05 of providing electricity in relation to revenues
Tube wells (Agri) 3.46 (3.68) (3.12) realized by the power distribution companies
Private Consumers 25.59 39.29 54.55
(DISCOs)
KESC 4.04 (1.79) 13.78
 Insufficient payments by DISCOs to CPPA due to
poor revenue collection/governance
Total Non-collection (24.74) 81.26 100.69
 Delays in tariff determination & fuel price fixation
Tariff & Subsidy Issues 154.75 90.62 234.18
 Delayed payment by the Ministry of Finance
Total Circular Debt 365.66 537.53 872.41  Transmission & distribution losses
 Stay orders granted by courts on fuel price
adjustments charges
Share of Increase in Circular

 Unfavorable generation mix of the GENCOs

GOPs neglect in promoting demand-supply
Debt - FY2011-12


management, energy efficiency & renewable
energy resources
 Improper payment arrears settlement and the
need for enforceable authority of CPPA to
collect due payments from DISCOs

Source: PEPCO DISCOs Performance Stats Report

2012, Data from MoWP , USAID PDP Analysis
 Distribution companies are facing line losses due to multiple
reasons, but electricity theft and non-payments by the consumers
are burning issues…

Pakistan lost Rs. 90 billion

during the last five years
in electricity theft and
line losses
DISCOS (Losses/Theft) Billion (PKR)
Pak-UK Chamber
FESCO 0.6 of Commerce &
GEPCO 0.360 Industry President
has urged upon
LESCO 2.35 the authorities to
reduce 44 per
MEPCO 0.280
cent losses and
SEPCO 3.6 thefts in the
electricity being
HESCO 7.47
produced in the
PEPCO 16.17 country.
KESCO 59

Rs 360bn receivables strategy is required by PEPCO:

More than Rs 360 billion became overdue towards public holding offices of central and provincial
governments along with local power consumers, which created hurdles in minimizing the circular
debt volume of the power sector.

Source: http://freepdfdb.com/pdf/country-report-on-energy-security-amp-power-crisis-68585068.html
ICCI Electricity Report
The News, Daily times, Nation
 Pakistan is one of the emerging economies of South Asia, where the
government has declared the Power Sector as its top priority of
investment…

The Government of Pakistan is taking all the necessary measures to build a more conducive environment, to resolve issues as quickly as
possible. Long term planning and goals must be focused towards streamlining the foreign policy according to the country’s
economic and energy needs. Improving and increasing ties with future energy rich countries must not be neglected.

Electricity Agreements Brief details

/ Prospects with Other
Countries
China Ongoing projects include Karot, Taunsa, Kohala and Bunji hydro-power Projects China has offered help in the
construction of 50 MW wind power project in Jhampir (Sindh) that is to be completed in 2012 Moreover, China
has planned to invest in 300 MW solar power projects in Pakistan.
India India has offered to provide Pakistan with 5,000 megawatt electricity to fulfill its energy
requirements on an urgent basis regularly which could be transmitted through Punjab.
Iran 100 MW import project have been finalized and are ready for groundbreaking. Pakistan and Iran would
move forward on import of 1,000 MW power project from Iran.
Tajikistan Central Asia South Asia (CASA-1000) is one of the biggest regional projects through which Tajikistan would
export up to 1000 MW of electricity to Pakistan.
Germany AZUR energy group of Germany planned to setup 50MWAtt solar project in Pakistan, for which a feasibility report
and site surveys of Multan and Bahawalpur were conducted.
Qatar Pakistan is also interested in importing 500 million cubic feet per day of LNG from Qatar that produces 77
million tones per annum of LNG. The imported LNG will be initially provided to the power houses in the country
to generate 2,500 mega watt of electricity.
Norway Norwegian company NBT has expressed interest in establishing a 500-megawatt wind power project in Pakistan, by
investing about $1 billion in alternative energy
Kuwait Kuwait has extended $40 million to Pakistan for the construction of the de-sander, a vital part of the
strategic $333.3 billion Neelum-Jhelum hydropower project. Upon its completion it will generate approximately
1,000 MW of electricity.
 Pakistan is a suitable country for the installation of solar, wind power,
coal fired plants, and can become an Asian leader in renewable energy
due to its strategic endowments…

 Pakistan falls under the list of countries with  Pakistan has potential of more than
‘Excellent’ category wind speed of 7.7 100,000 MW from solar energy.
m/s. Building of solar power plants is
underway in Kashmir, Punjab, Sindh
 As per a USAID Report, Pakistan can and Balochistan.
potentially produce 132,000 MWh of wind
energy. The wind corridor, in Sindh  Alternative Energy Development
province, alone has the ability to generate Board (AEDB) is working for 20,000
40,000 MWh of wind electricity. solar water heaters in Gilgit
Baltistan.
 The ratio of Debt to Equity is 80:20, with a
guaranteed return on equity, by the
government, in the form of partial
paybacks of fuel costs, operations and
maintenance cost, and taxes/duty.

 Pakistan has estimated as the world's third-largest known coal reserves of 33.0 trillion tons in the
south-eastern part of the country i.e. Thar

 The electricity production from coal is also cheaper than thermal generation as 2 percent usage of
Thar coal could produce 20,000 Megawatts electricity.
 Pakistan’s coal reserve has ‘ZERO’ contribution in it’s energy mix. Hence, there is a substantial room for
investment considering , Abundant coal reserves, and a guaranteed 17% USD based return.

Source: The Cause and Impacts of power sector circular debt in Pakistan – Planning Commission/USAID
ICCI Electricity Report
USAID
 The current energy crises in Pakistan warrants
immediate measures for resolution, some
recommendations for improvement are…
 Promote hydro power and other domestic alternate sources of energy New Government
Prioritized Items for Improvement of Pakistan Energy

including solar, wind, coal and agriculture biomass/biodiesel Plans

 Energy conservation and demand management programs be initiated
"The government has
 GOP to remove the current overhang of circular debt and prevent its planned to gradually
recurrence retire the power sector's
 Power sector reforms to be initiated and existing power plants be huge circular debt to
overhauled to achieve maximum efficiency streamline the
 Undertake policies/programs to improve governance/performance of electricity generation
energy sector entities chain that would bring
the load-shedding
› Decrease costs and Increase cash flows
under control.”
Crises

› Ensure operational/financial integrity of the sector

› Implement international best practices including smart metering / "The malfunctioning
automated meter reading (AMR) systems and Time of Use (TOU) hardware as well as the
tariff incompetent operators
 Resolve Tariff and subsidy disputes between provincial governments and at different power
CPPA/DISCOs plants will be replaced,
adding lists of all those
 Curb electricity thefts with stringent penalties who had so far been
 Political appointment culture needs to be replaced with found sleeping on their
professionalism/merit jobs are already on the
 Fuel allocation policies be introduced concerned authorities
 Relocate gas towards power production as its cheaper than imported tables"
furnace oil
Source: An Overview of Pakistan Energy Sector Report by Islamabad Chamber of Commerce & Industry
(ICCI), The News
 New Government has summarized some key problems in the current
system and has proposed short, medium and long term solutions to resolve
the energy crisis and they are highlighted in the 16 points...

i. Creation of a Ministry of Energy and Natural Resources through the merger of These measures will
Ministries of Water and Power and Petroleum and Natural Resources
ii. Reforms of National Electric Power Regulatory Authority (NEPRA) not only solve
iii. Reforms of Distribution Companies (DISCOS) Pakistan’s lingering
iv. Reforms of Generating Companies (GENCOs) energy crisis but also
v. Permanent elimination of circular debt shift the focus of the
vi. Rationalization of energy tariffs in line with international prices across all fuels. energy sector from
vii. Reforms of Oil and Gas Regulatory Authority (OGRA) high cost imported
viii. Aggressive wellhead pricing for Oil and Gas exploration companies in order to fuels to indigenous
substantially increase production of oil and gas
ix. High priority to import gas through pipelines energy resources and
x. Expeditious setting up of coal and LNG import terminals, and coal reduce the total
transportation facilities energy import bill and
xi. Development of Thar coal fields and setting up of at least 5,000 MW of new add at least 3.5% to
coal fired power plants under the lPP mode in Sindh. This will both create
employment in rural Sindh and help solve our energy crisis. The plants to be the annual GDP. At
designed on lignite quality coal and at first to be run on imported coal and the same time
when Thar coal is available, the plants to be switched to domestic coal investment of about
xii. Developing consensus among the various stakeholders to facilitate setting up
hydropower projects by the Federal and Provincial Governments. This will US$ 20 billion to
augment and conserve our water resources and also generate less expensive generate 10,000 MW
and clean electricity of electricity in the
xiii. Developing alternative renewable energy sources, such as solar, wind, next 5 years will
bagasse, biogas, and biomass projects, especially for off-grid and micro-grid
applications. stimulate overall
xiv. Setting up national energy efficiency standards. growth of the
xv. Introducing solar-thermal water heaters for domestic and industrial use. economy.
xvi. Decentralizing and creating a wholesale market for electricity.

Source: http://pkpolitics.com/2013/05/16/pmln-energy-policy/
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