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Pakistan Energy Crisis: Immediate Attention Needed!

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By Yasmeen Ali

From http://www.flickr.com/photos/95482862@N00/7004881064/
by Oran Viriyincy

In Pakistan, depending on your place of residing, there is no electricity from six to twenty hours a day. Whereas it has hit hard the lives of the common man, making it impossible to function on a day to day basis, it has also brought down production in industrial sectors drastically, costing contracts and jobs of millions across the country.

If we look at the issue- two reasons emerge. First the demand is far greater than the supply. Pakistan is just not producing enough of it to go around. Second, the government is failing in paying dues to power generation companies thus giving rise to the phenomenon of "circular debt." This is basically piling up of government dues outstanding to the power supplying units thereby disabling them from covering their overheads and producing /importing power. Once this debt is paid off, the IPP's can pay off their petroleum import expenses and start producing at optimum levels. The IPP's at current are responsible to provide electricity to half of our country. As the Govt. did not pay their debt so now they are charging or demanding higher per unit prices from the consumers. This hike in electricity prices is affecting not only our local industries and homes but is also affecting our exports of manufacturing goods. The govt. must intervene and pay out the circular debt. Or provide subsidy on electricity.

Most of the systems here run on either Gas or Coal i-e they are thermal systems. Both Gas and Coal are considered as scarce and expensive commodities for electricity producers. We lack high quality lower end grids that are used to carry electricity from power houses to the ultimate consumers via grid stations. The infrastructure is old and deteriorated. The system is unable to sustain extreme weather conditions hence most of the grids shut down at extreme temperature or either completely stops working. WAPDA is facing huge line losses due to electricity theft or illegal usage of electricity.

Then also, we face the very real problem of foreign investor being shy to invest big bucks in Pakistan owing to the socio-political-corrupt system.

There will be no honeymoon period for the Nawaz Sharif Government. The test of his government will be to provide immediate relief to the people. Nawaz Sharif needs to put together some sharp plans to address this pressing issue. Short term ones must be married to long term goals.

Some short term steps to address the situation are: Line Losses & reasons must be look into & steps taken to correct the same, Incoming government MUST look into discrimination of electricity distribution. Why is Punjab (more particularly) and in particular Lahore, Faisalabad & some other cities facing power outrages for 16  hours a day? Whereas this is reportedly not happening to this degree in other provinces. Upgrade Grid Stations, govt. must convert inefficient gas plants to efficient ones in order to conserve electric energy. In areas where over 80% of bills are being paid must not suffer power outrages as sharply as in areas where they are not. This will not only encourage timely payment of bills but will also be seen as being in the spirit of fairness.

Long term solution requires focused attention. Pakistan cannot sustain flawed judgment in taking of a final decision in this regard. It is exorbitantly expense neigh impossible to convert present energy giving units into one with different source of energy production. It will require virtual revamping of the entire existing set ups. However, Govt should look into the possibility of setting up Energy Units with LNG. I am told this is cheaper in terms of setting up & operational costs. LNG is cheap (comparatively).Very cheap. Qatar is the biggest producer/exporter for LNG. Qatar can export gas in liquefied form anywhere in the world and focus on the places where the state earns the most income for the gas. The idea at first was to ship LNG by boat to the US, which was supposed to help meet the demand of hungry Americans, but the continuously low natural gas prices in the US mean that it is more profitable for Qatar to supply its gas elsewhere, e.g. the United Kingdom, India, Japan and other countries in south-eastern Asia and Europe. Demand for Qatar's liquid gas increased immediately in Japan after the earthquake on March 18 -- supplying gas over such a distance through a system of pipelines would be practically impossible, especially when there is more than just dry land between the two locations. In addition to these distant places, some neighbors of Qatar have also shown an interest in buying gas from the country, especially Bahrain, Dubai and Abu Dhabi. Four of the six GCC countries -- Saudi Arabia, Bahrain, Kuwait and the United Arab Emirates -- are importers of natural gas and only two are exporters -- Qatar and Oman. As the gas exports of Oman are ca 10% of the gas exports of Qatar, there is no doubt that Qatar is the most influential supplier of natural gas in the region. There is no reason to fear that Qatar will run out of gas any time soon. The country has the third-largest natural gas deposits after Iran and Russia -- Qatar owns 14% of the total gas reserves of the world. Qatar has enough gas for more than 200 years at current production quantities.

The incursion of foreign investment will depend on a conducive atmosphere directly linked to political & social stability of the country. Corruption must be checked to encourage it-with incentives.

Nawaz Sharif will be well advised to review and down size the massive increase of Rs 5.82 per unit price of electricity by the caretaker government. This step is being termed as facilitation for incoming dispensation. In a situation where due to unavailability of gas & electricity the business community is struggling to do business, common man struggling to manage expenses, the step is seen in direction of lowering Nawaz Sharif government popularity even before being sworn to office!

The writer is a lawyer & Author of a Media Book .Her twitter handle is @yasmeen_9

 

Lawyer,Writer,University Professor based in Lahore Pakistan. View my blog:
http://pakpotpourri2.wordpress.com/
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The first test of Nawaz Sharif Govt will be faced ... by Yasmeen Ali on Monday, May 20, 2013 at 10:18:32 AM
Apart from the very common and well known problems... by Haya Khattak on Monday, May 20, 2013 at 8:51:14 PM