Energy Crises in Pakistan Essay Sample
Pakistan should look for all options to increase its electrical energy production by 10. 000 MW in two old ages. This is a really ambitious and hard undertaking. But if it fails to accomplish the mark. all other indexs will travel negative go forthing behind a black state of affairs. Pakistan’s Energy Crisis
Energy is presuming cardinal phase due to the rapid economic growing in different parts of the universe. forcing energy demand higher. Unfortunately Pakistan is confronting major energy crisis today. The energy crisis is impacting all walks of life in the state. The state of affairs farther deteriorated because of the arrest of the supply to industrial units by Sui Gas Company. The Company was already traveling through a system of load-shedding itself due to inordinate usage of gas by CNG users. Many electricity coevals units were shut off due to non-availability of the gas. The IPPs who were runing on furnace oil could non acquire the regular supply of the furnace oil due to the round debt issue. And so of course the incrimination game started. get downing from the H2O deficit in Dams to furnace oil transit job. force in Sind and care activity in some independent power manufacturers. The authorities admitted that in last 10 old ages non a individual MW was added. The fact is that Pakistan is prolonging an acute deficit of Power. Its demand is increasing and production is worsening due to aging of the workss. And no solution is in sight. The undertakings which are in grapevine will non come in line before 2013. And even the magnitude is such that it will non be able to carry through the demand of today.
The energy solution was in edifice of the large dikes but this became controversial issue due to the Kala Bagh dike. Cipher took any measure to decide either Kala Bagh issue or get down some new dike. The WAPDA is still in favor of big dikes sing that the hold in building of big dikes was the basic ground for the deficit of power. But the building of large dike will take at least 10 old ages and we can non wait that long. If this state of affairs persists. our economic system will so come to a phase where it will necessitate any power at any rate. Even today both concerns and families are passing immense amounts on the import of power generators and their fuel. The financess spent on these imports are seting tremendous drain on the economic system. Although larger industries can set more money in the electricity coevals. the existent job is with the little and medium endeavors which are confronting the existent crunch. The SMEs sector has to be facilitated due to its importance as engine of growing in the economic system. In the present state of affairs. it can non afford its ain electricity coevals.
Expensive import-based. oil-run power coevals is non the reply. These have already increased Pakistan’s fuel import measure. Furthermore. uncertainness prevailing in the oil bring forthing part is adversely impacting the oil monetary values which are demoing a steady rise in the last few old ages. A decennary ago oil was being traded on $ 20 and cipher of all time thought that the monetary value will traverse the $ 147 grade in a short span of clip. There is some bead in the monetary value but oil is still being traded around $ 90 today. This is seting immense load on economic systems of the underdeveloped universe including Pakistan. The state is confronting another job. Its power bring forthing substructure particularly thermic units are aging with every passing twenty-four hours and their power coevals capacity is cut downing. The acute deficit has increased torment of the state through load-shedding. The economic system of the state was on the way of economic recovery but the deficit has farther delayed it. The energy deficit is doing at least 3-4 per centum loss in the GDP.
The deficit along with planetary fiscal crisis. war on panic and inundations has pushed back the economic system into low growing way. The hold in the determination of edifice large dike has resulted in high cost of electricity coevals by imported oil. “An official energy demand prognosis indicates that the demand for natural gas. which makes up approximately 50 % of Pakistan’s energy ingestion. would increase by 44 % to 39 MTOE from 27 MTOE presently. ” The crisis is worsened with the deficit of natural gas. Many industrial units are either closing down their operations or running on their ain energy coevals. This state of affairs is earnestly impacting our fight in the international market. The energy crisis is traveling to decline in the coming old ages due to an addition in the demand and a instead slow betterment in the supply.
The power deficit. during the current twelvemonth is likely to hit 5000 MW during the peak hours and the state of affairs is non traveling to better unless some long-term disciplinary steps are taken instantly. It is anticipated that the overall energy demand of Pakistan will be about 100 million dozenss of oil equivalents ( MTOE ) in 2015. The development of H2O resources would decide the job in the long tally but in the short term. there was a bound to building dearly-won thermic power undertakings given their high economic costs. A major deficit is already at that place in natural gas supplies. as an official energy demand prognosis indicates that the demand for natural gas. which makes up approximately 50 % of Pakistan’s energy ingestion. would increase by 44 % . i. e. 39 MTOE from 27 MTOE presently.
The issue of energy deficit is non traveling to travel off in a short span of clip because of the non-seriousness of the authorities on the building of large dikes. Presently we are following assorted short-run solutions but this is non the reply to the issue. There were certain appraisals that the power deficit issue would be resolved in a short span of clip but this was non materialized and we further went into crisis. The image looks gloomier when the addition in demand over the following five old ages is taken into history with no investing made in edifice of large dikes. There will be an expected short-fall up to 50 % because of addition in demand of natural gas. Pakistan’s entire energy demand is expected to increase by 48 % in the coming old ages. The energy sector in Pakistan comprises 50. 4 % portion of gas. followed by 29 % of oil. 11 % of hydro electricity and 7. 6 % of coal. As a effect. the state has to import energy to provide the demands of the economic system. The power sector is peculiarly in crisis because of inefficiency. misdirection and dependance on imported oil. Harmonizing to the Pakistan Energy Year Book 2000-10. the energy coevals through oil is 38 % . gas 29 % . Hydal 29 % and others 3 % .
The cost is high but recovery is low. The line losingss are about 30 per centum. giving rise to the round debt issue. Government pumps in one million millions of rupees but due to line losingss after every three months this round debt once more starts demoing up. “There should be more accent on renewable energy resources but conventional hydro. thermic and coal-burning power workss should be established in the short-to-medium-run. ” The most of import inquiry now is what will go on if the oil monetary values further rise. The economic system of Pakistan will be worst affected due to its little fabrication market as compared to major emerging economic systems like China. India. Malaysia. Indonesia. Philippines and Bangladesh. As a simple regulation. the energy cost in the fabrication sector is at least 33 % at the prevailing monetary values. An addition of energy cost will countervail the cost construction of the production and will coerce the makers to cut on other costs.
They either have to cut down the labor cost or other costs to stay competitory in the market. As energy is behind all the production. the cost is non traveling to come down. The other option is to better the quality criterions but that requires immense investing in the research and development. So by all the indicants smaller economic systems will endure severely. nevertheless. the major economic systems like China and India will profit from this status. The inquiry remains. are we cognizant of the gravitation of the state of affairs and fixing ourselves to turn to the state of affairs? Apparently there is no serious attempt in grounds to work out this issue on the long term footing. This is the clip that Pakistan must measure really carefully that in instance of rise in oil monetary values. what actions it should take to conserve energy and to happen the alternate beginning of energy.
The state of affairs demands an pressing determination. We already wasted a considerable clip and could non put in energy sector decently. Energy is a cardinal factor for the stableness and prosperity of Pakistan. We have to do a determination for the safety. stableness and endurance of Pakistan. We have to maintain our production running otherwise unemployment will lift which will besides increase street force. This is the clip to reconstitute our energy policy. The aim should be to use diversified energy resources. An environment should be created where the investings are made in energy sector. Recently Government is recommending a policy of advancing the investing in private sector. Although the response is favorable but the result is really slow. Now Government has to do a immense investing in energy sector. And the investing has to be in direct purchase of power workss. fabricating chief and subsidiary units. To accomplish this aim. one cardinal ministry should look after the energy issues in Pakistan.
The authorities had planned five major enterprises. including three gas import grapevines. the Gwadar port as energy hub and the LNG import to run into these energy demands. But four of these steps. viz. the three import grapevine undertakings. are unsure at present. while concentration on energy installations in Gwadar would chiefly depend on security state of affairs. besides oil and gas import grapevines. “For illustration. if we start constructing 1-3 KW micro hydro. air current or solar power workss in Pakistan — sufficient to supply energy to one place — we can sell electricity to single households direct at low installments. The cost will be recovered in the public-service corporation measures. ” There should be more accent on renewable energy resources but conventional hydro. thermic and coal-burning power workss should be established in the short-to-medium-run. The scheme should be to research autochthonal local resources.
For illustration. furnace oil workss are best suited in Karachi where the port and refinery installations are available. Gas workss to be installed in Baluchistan. Sind and KPK near to bing gas Fieldss. KPK should research medium. little and micro size hydro undertakings. Sind must utilize its coal militias. Wind turbines to be installed in coastal belt. and Punjab must research bio-gas and metropolis waste workss. From US and Europe we should borrow and buy the engineering to fabricate assorted power workss in Pakistan. For illustration. if we start constructing 1-3 KW micro hydro. air current or solar power workss in Pakistan—sufficient to supply energy to one place — we can sell electricity to single households direct at low installments. The cost will be recovered in the public-service corporation measures. The IPP and confined power workss should be allowed to import furnace oil duty-free. This manner the bing power workss will once more go operational.
The attempts should be made to implement Iran-Pakistan gas grapevine undertaking on pressing footing. Furthermore. one extra grapevine for rough oil to be installed to cut down our dependance on sea path. Pakistan is in demand of energy really severely and desperately. Pakistan should look for atomic energy possibilities. Pakistan is one of seven states in the universe who has an autochthonal capableness to run the atomic power works for the last 40 old ages. Pakistan should look for all options to increase its electrical energy production by 10. 000 MW in two old ages. This is a really ambitious and hard undertaking. But if it fails to accomplish the mark. all other indexs will travel negative go forthing behind a black state of affairs.
Besides bring forthing more energy. one easy option for all energy users is to conserve energy. A dedicated run of energy preservation is needed to distribute the consciousness of energy preservation programmes. In many states. people on voluntary footing adopted easy ways to salvage energy and achieved up to 20 per centum nest eggs in energy. We can analyze the behaviors of modern states and can follow the same schemes to conserve energy. By and large major energy consumers have small or no consciousness of energy-saving processs. While buying the machinery. really small accent is given on electrical or mechanical efficiency of the works. The consequence is that our production units are devouring much more energy than their rivals ensuing in high cost of their merchandises and it is non competitory in international market. Energy preservation is so energy production. So if an investing is made in this sector. it will pay back in 3-5 old ages. This is the duty of Government to get down assorted energy preservation programmes suited for assorted industries.
Gas Sector: Pakistan largely relay on autochthonal natural gas which is the largest beginning of energy supply in Pakistan. Presently. this sector contributes 27. 7 million Metric tons of Oil Equivalent { TOEs } ( 45. 4 % ) in the overall energy supply of the state. followed by chiefly imported oil merchandises at 21. 3 million TOEs ( 34. 9 % ) . The other beginnings have comparatively smaller part e. g. hydel power at 7. 5 million TOEs ( 12. 3 % ) . coal. chiefly imports. at 3. 7 million TOEs ( 6. 1 % ) and atomic power at 0. 8 million TOEs ( 1. 3 % ) . The state has seen rapid growing in the ingestion of autochthonal natural gas in all sectors of the economic system whether it is residential. commercial. industrial. conveyance or power. This is the consequence of broad authorities policy on the monetary value control and usage of CNG. Over the past 15 old ages. the CNG sector has shown tremendous growing in the ingestion of gas. The result of this policy was a huge natural gas distribution and transmittal web in the state. Furthermore. the low gas monetary values provided a important deterrence to the investing in this sector. No important new investing came to this sector in the past 15 old ages. The autochthonal militias of natural gas depleted at an dismaying velocity.
The gas crisis is now taking its toll on the occupation market of the state. rendering 1000000s of workers idle particularly in the industrial metropoliss of Punjab. Fabric is the major industry in the state using 1000000s of workers. Unfortunately. cut in gas supply merely to Faisalabad was doing one billion rupees loss daily to the economic system and $ 3 billion one-year to exporting sector. A study shows that about 3 million workers are being affected by the gas load-shedding. The steel industry is the 2nd largest exporting industry and provided employment to 500. 000 people but now 300. 000 people were unemployed after the gas crisis.
The state has to earnestly seek to increase gas supplies. In the past 15 old ages it could non increase gas supplies. either through increased domestic geographic expedition activities or via imports of liquified natural gas ( LNG ) or regional gas grapevine imports. The prediction on the current gas policies indicate that Pakistan’s natural gas supply will aggressively worsen from current 4 billion three-dimensional pess per twenty-four hours ( bcfd ) to less than 1 bcfd by 2025/26. This will ensue into a heavy gas/energy deficit making at 8 bcfd ( over 50 million TOEs ) by 2025/26. The economic system will confront the brunt of this deficit and it will deject Pakistan’s mean GDP growing rate. Furthermore the possibility is that Pakistan will non be able to develop its other autochthonal energy beginnings such as hydel power and coal by 2025/26 under current policies. and the energy import demands of the state may turn from the present 30 % to over 75 % of the energy mix by 2025/26 costing over $ 50 billion per annum in foreign exchange. It has to take some steps to guarantee go oning gas supplies to its occupants. industry and commercial endeavors.
Because the monetary value is an of import instrument to convey efficiency in the gas use. so government-controlled natural gas pricing which is significantly lower than pricing of alternate fuels should be readjusted to decide the high gas demand and low supply state of affairs. The mechanism of pricing slabs for different gas ingestion degrees is besides non working and it has created demand deformation every bit good as bucked up unethical patterns. The demand of the clip is to do the natural gas pricing be compatible with pricing of replacing fuels in different sectors ( LPG. fuel oil. LNG/pipeline imports ) via an enhanced gas surcharge and pricing for new natural gas supplies. both domestic and imports. be de-regulated. At the same clip the monetary value slabs be abolished. with a individual natural gas monetary value for all volumes. The other of import issue of the gas sector is that this collectivist resource is being used for political purchase. ensuing in over-commit-ment of gas supply taking to natural gas deficits.
There is no cheque on the larceny and it reached at dismaying proportions. The bing gas public-service corporations be unbundled and a individual collectivist natural gas transmittal company be created for conveying gas on an open-access footing. Natural gas distribution & A ; selling be privatized to multiple gas companies to supply improved concern subject and client direction. A competitory gas market be created with de-regulated monetary values and open-access to the gas distribution grids for third-party gas providers. Natural gas larceny be declared a “non-bailable offence” with a high punishment. Gas monetary value inducements for the geographic expedition and production ( E & A ; P ) in Pakistan are non attractive for major new investings to be undertaken. Security state of affairs and uncertainness in continuity of E & A ; P policies by consecutive authoritiess are barriers for major E & A ; P investings.
The geographic expedition sector needs to be increasingly de-regulated and. as a first measure. be allowed to sell new natural gas finds at market-based pricing. Exploration sector be able to sell natural gas straight to consumers via unfastened entree to the gas transmittal and distribution grids. Pakistan’s current recognition evaluation of below investing class is non contributing for long-run LNG contracts. in which the LNG providers require payment securities. Pakistan does non possess LNG import substructure and its current port conditions are unequal for large-sized LNG vass. Merchant LNG import terminuss be set-up by the private-sector. under capacity-utilization warrants by the authorities for an initial period. to enable early spot/short-term LNG imports. Import terminuss needs to be opened to make a competitory LNG market. Development of ports be undertaken by the authorities on a fast-track footing to supply handiness for large-sized LNG vass.
