Energy Crisis Causes, Effects and Remedies

Energy Crisis

Not so long ago, have Pakistanis seen halcyon days, when the land of milk and honey was ignorant of energy crisis, load shedding and other such terminologies.

But it proved to be a nine day’s wonder until mid-2000s approached and our beloved country plunged into darkness.

A country’s development and progress is heavily dependent on the energy sector. Calling it a country’s lifeline wouldn’t be exaggeration. On economic front, its import is vivid from the fact that there is a need of electricity for the industries, business, agriculture and other such entities to run. Not a single department could ever think of paucity or utter absence of electric supply. The crisis nurtured in 2007 especially in 2012.

To talk about country’s energy generation potential, Pakistan has huge power generation capability. In Thar are hidden massive coal reserves, that is to say, 186 billion tons enough for coming 180 years. 50,000 MW electricity could be generated through this reserve. Wind energy replenishes the energy sector with surplus wind power; be it Karachi, Islamabad or other parts of the country. Regrettably enough, a potential of 3,000 MW of power projects remains unmet.

Knowing the proximate causes of a problem, as a rule, paves the way for unravelling the issue.

Power shortage is constantly looming large owing to forfeit of 70 percent of the demand. The power generation has lowered to about 9,400 MW; the total demand being 17,400MW. Energy demand over next 5 years is expected to grow by more than 7.0 percent per year. Private Power and Infrastructure Board forestalls that up to 2020, the demand is expected to be approximately 45,000MW and a modicum of supply i.e., 28,000MW. The shortfall may reach up to 18,000 MW. This demand and supply gap has added fuel to the fire in the growing crisis.

NEPRA’s report 2011-2012 states that over the past five years, Pakistan imported crude oil that led to the increment of generation cost causing a hike in circular debt resulting in a peak in power rates. Finance Minister, Ishaq Dar has admitted that this year the circular debt of the power sector has increased up to Rs.33 billion. This speaks volumes of nonchalance towards the issue from the administration.

Tellingly, mismanagement mars the whole structure of functioning and productivity of a system even if it is fair and square, very well in its ambitions and objectives. Ministry of Petroleum and Natural Resources comprises thirteen important companies including OGDCL, SNGPL and SSGPL. Nevertheless, we have dearth of oil and gas.

Deputy Chairman Planning Commission, Dr Nadeem-ul-Haq, in a presentation titled “Framework for Economic Growth, Pakistan” revealed that energy crisis was definitely a management failure  and not capacity issue as the country possessed electricity generation capacity. He added that there is a compelling need of taking affirmative steps to curb the energy crisis and that the government was doing as far as in it lies in this regard.

Even today, many positive steps taken by the governments are laudable. National Energy Policy 2013 developed by Ministry of Water and Power pledges to back the present and future energy requirements of the country and ensure the celerity of economic growth and social advancement. The crux of the features of the policy evinces that the power generation capacity should be built, ensure world class energy generation efficiency, and reduce inefficiencies in the distribution system and financial losses in the system.

China-Pakistan Economic Corridor (CPEC) is being regarded as ‘game-changer’ for Pakistan’s socio-economic development that is worth $46 billion; of which $35 billion is committed to tackling the power crisis.

But the efforts become worth eulogizing when sincere efforts are put in their establishment, implementation, and achievement. Conferences are arranged, commissions are made, seminars conducted and polices are designed but it is a thousand pities that no result could be seen.

History of Pakistan is replete with those who have the milk of human kindness. Quaid dreamt of constructing Kalabagh Dam to cope up with the power issues. WAPDA reports that Nandipur Power Project of 425 MW has also gone sour. Instead massive corruption has been reported. Bhasha dam is also supposed to meet the energy deficiencies by improving the hydel potential of the country. Quaid-e-Azam Solar Park is another laudable part of ‘New Silk Road’ under CPEC; which has 100 MW generation capacity. These projects fell a victim to politics and utter chaos.

PEPCO possesses the installation capacity of 22,812 MW. What is worse is that the energy generation capacity is about fifty percent of the total by virtue of inappropriate fuel mix, scarcity of water, and inapposite recovery system.

The ‘1994 Private Power Policy’ gave way to the privatization of power sector in Pakistan. It was the World Bank that defined the structure of this policy that has been responsible for privatizing the sector by private investments through hefty incentives. This policy was based on the structure for the Hub Power Project (HUBCO) which was a, 292 MW and $1.6 billion project. It was due to this policy that electricity generation mechanism parted from its transmission and distribution. In fine, private producers got immunity from corporate income tax, custom duties and sales tax on imported apparatus. The investors hurried to invest in Pakistan’s power sector and established oil-based, inept power plants. Twenty IPPs (including HUBCO) occluded having capacity of 4,500 MW. Thus privatization posed more harm than doing good.

The governments in Pakistan kept on rolling, changing and shifting. The 1988-1999 era best exemplifies it. In this scenario, the predicament of the energy sector became miserable as each government was on the trek of its attainment and survival and energy sector, not being payed any heed, started to breathe its last.

“CNG is a poor man’s fuel”

CNG is cost-effective and a rife energy resource. It must be readily available to the consumers. But the last decade was the time when CNG crisis got celerity. Previous government is guilty of providing licenses with no check and balance to the CNG station owners. Alleged corruption, CNG larceny mounting in billions have also been reported.

NEPRA’s report 2011-2012 states that the use of long figured furnace oil has been increasingly high. Coal is a dime and a dozen in our country. Needless to say, it needs to be preferred.

It is due to Independent power producers (IPPs) that WAPDA has gone to dogs. IPPs involved in corruption and were hand and glove with WAPDA to get their contracts signatured. WAPDA had to attain expensive power.

It seems as if the host of problems energy sector is facing was not sufficient that the menace of terrorism was ready to take its turn. Not only innocent citizens but energy sector too could not save its face from grim impacts of terrorism. Several gas pipelines have been exploded since the last few years. The Baloch Liberation Army has reportedly been indulged in and responsible for blasting gas pipelines spread in hundreds of thousands of kilometers. This led to sheer loss of gas pipelines, gas distribution mechanism and infrastructure, copious energy resource and a great bump to the nation’s economy.

The devil-may-care attitude of the consumers is no less than worrisome. The pomp and show of lights at offices, commercial plazas, and shopping centers render the energy preservation a far cry.

The inefficient power plants are good for nothing. These had better closed than operate because they are adding to the miseries of the energy sector.

Energy crisis is resulting in confusion worse confounded. To talk about April 2012, electricity shortfall was approximately 5000MW; a time when sweltering summers were not in full swing yet. The shortfall reached apex in October, the same year, which is known to be at 7500MW, the X-ray scrutiny says. The load shedding extended from 6 hours a day in urban areas and in rural areas it was about 16-18 hours a day. This clearly outcries the vitality of electricity for the household consumers and of course, the commercial and industrial consumers who faced the turpitude of the electric supply.

The escalating energy crisis has put a full stop to the Business and Industry. The loss to industry is about 130 billion per anum, estimates speak. Economy is crumbling little and little. Rate of unemployment is proceeding at a faster pace which has promoted dismay, resentment, and truculence among young generation. The society falls a prey to moral and social evils.

It stands to reason that when the economy stumbles; public suffers. Price hike in the products, increased energy tariff and electricity bills reading high figures are enough to shake one’s nerves. Newspapers outcry the incidents of suicide owing to high bills.

From 2008 onwards, each year the loss of GDP was 2-3 percent. This was by dint of power shortages. The crux of a report by Asian development bank issued in April 2012 evinces that GDP growth lowered by 3-4 percent in fiscal years 2011 and 2012. National Electric Power Regulatory Authority (NEPRA) reveals that owing to the energy crisis, the country is losing three percent of its GDP and if the condition persists, it can escalate even more.

 In 2013, the line losses of the department reached up to 3.6 percent. The same year, senate came to know of line losses posing a bump of Rs 90 billion to Pakistan’s economy. Energy tariff increases and the heavy price is paid by the sufferers. NEPRA’s 2011-2012 report exhibits PEPCO at stake.

One can easily see with half an eye the crippling energy sector. Luckily, the ailment is curable. Pakistan must appreciate the availability of the natural resources nature has blessed it with and learn to acknowledge its potential to make good use of these natural resources. We need to look for those new natural resources that are abundant and renewable and abandon those which cost a pretty penny.

X-ray scrutiny tells that of the total hydropower potential of Pakistan i.e., 42 GW, only 6.4 GW has been employed yet. Construction of power projects as Bhasha (4,500 MW), Kalabagh (3,600), Dasu (4,320) is indispensable. A corridor at Gharo and Keti Bandar alone could generate 40,000 to 50,000 MW electricity by wind power. Covering 0.25 percent of Balochistan with solar panels bearing potential of 20 percent could prove prolific for the energy demands of the whole country.

Dragging in nuclear energy plants would be like a fresh breeze in the suffocating condition. Pakistan’s has 47 reactor years of operational experience. Obsolete power plants need to be replaced with newer, up-to-date ones.

Asian Development Bank’s report in 2012 revealed that economic growth halted in pursuance of dearth of energy. It opined that commercial losses, resultantly, could be made up by ensuring better load management.

 Atomic energy department should be made an autonomous entity, entrusted with the opus of energy sector.

1994 power policy taught us a lesson not to commit such faus pas again. It is time to realize the gravity of the situation.

PEPCO urges to generate 16564 MW of electricity up to 2018. It resolves to generate 969 MW of electricity from Neelum Jhelum hydel by 2016. Moreover it is determined to produce 1,410 MW and 1,200 MW from Terbela 4th extension and Coal Plant at Sahiwal respectively.

Someone has whispered:

“A megawatt saved is a megawatt produced”

What we, the consumers, can contribute towards solving the quandary is to avoid impolitic usage of electricity that is tantamount to wasting and eventually worsening the crisis.

Democratic governments prioritize nations’ issues rather their own. The members of the parliament should raise their voices against the evils in the power sector.

“God gives youth but once; keep thou”

Youth possess exuberant and energetic temperament. They have leadership qualities and management skills inter alia. The management, workforce, distribution, each task of the sector should be handed over the shoulders of the youngsters for why they are imbibed with up-to-date scientific knowledge and equip themselves with the modern technological advancement.

Competent personnel in the energy department are just a drop in the bucket. Researchers, engineers, and scientists should be appointed to mend or end the energy sector. Because ‘right person in the right place’ would serve to ameliorate the malady. Masses should be made aware through seminars, competitions and campaigns.

Every year devastating floods ruin the country, wreck the humanity and crumble the economy. What if we construct dams, instead of investing on rehabilitation at provincial and divisional levels, so that massive amount of water hitting the country could be stored and preserved? This would serve multifarious purposes. It would save the citizens from horrific catastrophe on one hand and would be a resolution to the growing energy crisis on the other.

Gas leakage is often unnoticeable but frightening and usually fatal. Moreover, it, unknowingly, is posing quite significant loss to the economy. The out of order gas valves, the meters must be rectified so as to prevent gas leakage.

Power larceny of billions of rupees is another nightmare to be tackled. Power theft mafia must be held in leash and given strict punishment.

The industrial plants have well-orchestrated system of electricity production. They should be welcomed by government and private sectors to contribute in the mainstream.

The reliance of agriculture on energy is not incidental. Sensu stricto, Pakistan is an agrarian land; agriculture that was the cause of yielding gross domestic product (GDP) of more than half in the 1940s. Now, it has curtailed to mere 21 percent. Resolving the issue of energy crisis would revolutionize the agriculture sector. This would open new vistas for employment and such social evils as immorality, social injustice, unemployment, theft could be expunged. Foreign exchange will increase import and export improved and staggering commercial industry and business would also be revived given the proper management of the issue at hand.

Prime Minister Nawaz Sharif pay a visit to Karachi on December 28th, 2015; where he monitored the Port Qasim Power Project of around 1320 MW. He urged that approximately 2,000 MW would be added into the national mainstream in the coming two years. We stand a good chance that other such projects be put to implementation.

Energy crisis, to say the least, is a self-inflicted issue. We should not walk upon crutches. Instead, we have to rely on our own resources, explore new dimensions and work diligently to illuminate Pakistan once again.

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