Current Essay On Energy Crisis In Pakistan 2016

Energy crisis in pakistan

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1. Introduction
-- what is energy crisis?
-- Energy crisis_ A global issue
-- Pakistan is one of the most inefficient power markets within South Asia
2. Energy Crisis in Pakistan
-- Transformation of energy mix from hydropower to thermal, and Global Economic Recession (2007-2009)
-- Energy deficits of 4000-5000MW
-- OGDCL's prediction about the exhaustion of indigenous reserves by 2030
3. Causes of Energy Crisis in Pakistan
-- Administrative Causes
a. Mal-Administration
- Lack of effective and efficient policies
- Lack of commitment and will for exploration of untapped indigenous resources
- Phenomenon of ever rising circular debt
b. Technical and operational problems
- outdated generation equipments resulting in high generation cost and less than desired output
- Poor transmission and distribution system
c. Social causes
- wastage and unnecessary consumption of energy
- Rapid growth in population resulting in high energy demands
- Energy theft and non-payment of receivables
d. Political causes
- Lack of consensus and co-operation among provinces and federal government
4. Consequences of Energy Crisis
-- Economic factors
-- Energy shortfall
-- Industrial sector
- reduction in industrial output leading towards imbalance of trade
-- Agriculture sector
-- Damage to Pakistan's credit worthiness
- Moody's rating group warned that energy shortages would damage Pakistan credit worthiness
-- Social factors
5. steps taken by current government to root out Energy Crisis
--Introduction and speeding up of power plants
- Neelum-Jhelum hydel power plant
- Tarbella 4th extension
- Coal based plants at Jamshoro, Larkana
- Quaid-e-Azam solar power park, phase-3
-- Envisioned International Initiatives
- CPEC entails about $35bn of energy
- LNG import from Qatar
- CASA-1000 project
- I.P gas pipeline
6. Recommendations to cope with energy crisis in Pakistan
-- Bringing reforms in regulatory authorities
-- Making accurate estimate of future demands and formulating policies
-- Tapping indigenous energy resources
-- Duty free imports and installation of wind and solar panels
-- Making necessary steps for construction of dams
-- Reducing energy wastage
7. Conclusion

A man is not finished when he is defeated, he is finished when he quits!!!

Pakistan is in the midst of one of the worst energy crises in its history. This is both slowing the pace of economic activity and causing public unrest with prolonged outages of electricity and gas. Capacity utilization in some key industries has fallen to nearly 50 percent. Worst affected is the fertilizer industry, which faces interruptions to its gas supply and forced closures. Pakistan has the capacity to produce more than one million tons in exportable surplus urea, yet in 2011-12 it imported more than 1.1 million tons. This eroded the country’s foreign exchange reserves and effectively entailed the payment of millions of dollars in subsidies, being the difference between the cost of locally produced and imported urea. Pakistan urgently needs to make some strategic decisions and change the national energy mix.

Immediately after assuming power, the government of Nawaz Sharif came up with two policy decisions: pay half a trillion rupees (just under $5 billion) to energy companies and announce a new power policy. Both steps are aimed at resolving problems plaguing the companies belonging to the energy chain and bringing change to Pakistan’s energy mix to optimize the average cost of electricity generation.

Pakistan’s government paid Rs260 billion in cash to independent power plants (IPPs) to clear outstanding debt. It also issued bonds to pay off liabilities pertaining to state-owned companies such as exploration and production firms and oil and gas marketing entities. After clearing the debt of the IPPs, it was expected that they would be able to generate 1,700MW in additional electricity, attenuating the shortfall that currently exceeds 6,000MW. The situation is likely to improve over time.

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According to the available data, at present installed power generation capacity in Pakistan is estimated to about 22,500MW (excluding the Karachi Energy Supply Company, more on which below), but actual power generation hovers around 15,000MW, partly because of outdated and inefficient power plants and partly because of a cash crunch, which often does not permit power plants to operate at optimum capacity because of the inability to buy the required furnace oil. This could be best understood when one looks at the available data on power plants operating in the public sector, which have an installed capacity of over 4,800MW but actual generation hovering around 1,200MW.

At present, the bulk of electricity supply comes from hydroelectric plants (6,500MW) and IPPs (6,500MW). The output of the hydro plants is dependent on water availability in the dams, and can fall to as low as 2,500MW when water levels drop drastically. And as we have seen, IPP output is limited by money problems.

Pakistan’s woes have been exacerbated by its excessive reliance on thermal power plants, mainly using furnace oil. Two factors contributed to the emergence of this situation: a change in lenders from the public to private sector, and Pakistan’s failure to complete a hydroelectric project in recent decades. The last mega dam, Tarbella, was completed in the mid seventies and no other dam has been constructed since. After the signing of the Indus Water Treaty with India, Pakistan was required to complete construction of one mega-size hydroelectricity plant per decade to ensure year-round availability of low cost electricity and irrigation water.

Of Pakistan’s 6,500MW hydro capacity, the bulk is contributed by three projects: Mangla, Tarbella and Ghazi Brotha. There are nearly two dozen IPPs, but the major players are Hub Power Company, Kot Addu Power Company and Uch Power Plant. Pakistan also has three nuclear power plants, two in Punjab and one in Karachian, with aggregate capacity of over 800MW. However, the Karachi plant is at the end of its effective life and its capacity cannot be termed “dependable.”

Unlike the rest of Pakistan, Karachi gets its electricity from a compact utility, Karachi Electric Supply Company (KESC), which handles generation, transmission and distribution. The bulk of its generation comes from the Bin Qasim Power Plant, which has an installed capacity of 1,260MW. Another 500MW comes from smaller units. Since privatization, KESC has added another 500WM capacity at Bin Qasim but its output has remained erratic because of the inconsistent supply of gas.

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