Pakistan’s energy sector crisis is posing challenges to the country’s national security now. Around six to eight hours of daily loadshedding in the urban areas and a twelve to eighteen hours in rural areas, coupled with unemployment also caused by energy shortage in the industrial sector, has led to significant vulnerabilities that are now rapidly leading toward political instability. At a time when the country is fighting a war against terrorism, violent riots triggered by chronic power cuts have created the perfect environment to nourish violence resulting in widespread civil disturbance.
Pakistan having a surplus of electricity in the year 2002 is now short of more than 5500MW at a time when its peak demand is 18100MW. One of the causes of this energy crisis is the failure to anticipate the growing demand of electricity annually that was 3% in the year 2003 and rose up to 10% in the year 2008 due to higher economic growth and unplanned continuous rural electrification on political pressure.
The fundamental cause of the energy crisis is its dependency on fossil fuels. The system has the capacity to generate almost 17,500MW of electricity but it’s not working on its full capacity due to non-affordability of the rising cost of electricity generation, severe shortage of gas and the skyrocketing cost of imported furnace oil.
Pakistan’s daily gas requirement is 6.5 billion cubic feet (BCF) against its current supply of 4.0 BCF, which means that Pakistan at present faces a shortage of 2.5 BCF. The major consumer of gas is the power sector, which consumes nearly 40% of the total production of gas, has not only declined the hydroelectricity share from 52% to 30% but also caused the depletion of our limited gas reserve. To overcome the impact of the shortage of gas supply, the thermal power plants have had to switch from gas to furnace oil.
Consequently the cost of generation has tripled as compared to the amount of the cost of gas. Not only this, the already crippling economy of country is over burdened with a loan of $3.7 billion for the import of furnace oil.
Due to the former mentioned reasons, the cost of providing electricity to consumers could not be fully recovered, while the tariff for consumers remained unchanged from 2002 to 2007. For the first time in early 2007 the government increased the electricity tariff but still could not pass the whole cost of production on the consumers. The gap in cost of electricity generation and government-notified tariff had swelled to Rs3.39 per unit in 2010. Gas crisis and shifting toward oil coupled with the inability of the power distributions companies to pass on the cost of electricity to consumers, had turned power sector hostage to circular debt. Thus, dependency on fossil oil pushed country’s power sector between devil and deep blue sea, if power plants run on oil it created circular debt, if not then large-scale loadshedding is the only option.
When Zardari Government started ruling the roost in March 2008, the crisis was piling up. The sycophant adviser of Ministry of Water and Power (MOWP), had briefed Zardari and his prime minister that Rental Power Plants (RPPs) is the panacea of energy crisis. Inline with the party decision, the federal cabinet approved installation of 14 rental power plants to generate of 2,700MW. The RRPs, initiative rental power plants was turned into a mega corruption swindle and the country’s energy crisis only deepened. In this most extroverted deal, country has to pay high captive cost, but due to gas shortage, the cost of electricity generations very high, that why the RPPs are only are contributing 68 megawatts in the national grid.
This was the Himalayan blunder committed by Zardari’s government. Otherwise, hydroelectricity that is one and so far the cheapest and environment friendly source of energy was neither considered nor given due priority. Keeping a generation mix dominated by cheap hydroelectricity generation the government could have achieved the objective to keep consumer-end tariffs at affordable levels while also passing on the true cost of electricity.
However, whenever the question about hydroelectricity is raised, the MOWP has always given a stereotypical answer-hydropower project takes a long time and needs a huge capital investment-but this is a rather weak argument in light of modern hydropower project management.
In our neighbourhood, Indian policymakers are working towards adding 50,000MW of clean and renewable hydropower to their energy mix and have resultantly set some significant records in this regard. Many public sector hydropower projects, for instance, 520MW Omkareshwar project on the Narmada River has been completed in four years. Small hydropower projects are taking just 20 to 22 months for completion. However, at the top of the list of excellent hydropower project management is the 86MW Malana hydroelectric power project in Himachal Pradesh. It is unique because it was constructed within 30 months against its five-year schedule, and at almost 50 per cent less cost than the approved budget — and that too at a high altitude amidst difficult mountainous terrain.
While in Pakistan, the MOWP deliberated with stakeholders for two and a half years and finally brought out a power generation policy in 2002, nineteen run-of-rivers hydropower projects were planned and accordingly funds and the schedules were chalked out to add 4325MW of electricity. Regrettably, only two projects were completed in nine years. All these projects were delayed causing a serious energy crisis in the country. Had they been implemented according to the plan, Pakistan would have had 4325MW of cheap hydroelectricity to keep the wheel of economic growth turning.
Deliberate and abnormal delay in hydropower projects and wastage of heavy foreign exchange in RPPs is not the only crime of MOWP. In 2008, when the government was finding it difficult to lure foreign investment to overcome the increasing energy shortfalls, an entrepreneur requested MOWP for permission to start 600-MW Mahl hydropower, which was advertised by the Board of Investment (BOI) for private sector investment. The private entrepreneur arranged 800 million dollars to generate and then sell electricity just Rs4 per unit. Unfortunately, all his efforts aimed at benefiting the nation and public at large through development of cheap and environment-friendly hydroelectricity were made unsuccessful by adviser to MOWP. As a last resort, the investor published an appeal to the prime minister and the president of Pakistan for intervention to develop the Mahl hydropower project, on 27 of March 2010 on the front page in this most popular daily paper to avail their attention in this regard.
Nevertheless, he has never had any reply from both the offices. However, in April 2011, adviser to MOWP sent another demand to Friends of Pakistan (FOP) seeking funds of $37 billion for hydropower projects, including Mahl.
Development of hydropower is the only solution to the Pakistani energy crisis. Failing to address energy crisis shows that some authorities in the government have arcane plans. Destabilising Pakistan, using energy as an instrument, would prove dangerous for global peace. To make Pakistan prosper, global community should not help Pakistan financially only but more importantly, the country needs honest, dedicated and sincere advisers who can help to create an enabling competitive environment so that the private sector can also participate in investment without any fear.
This is only possible if the global community extends its help and intervenes. Without their help, the current regime neither capacity nor has will in providing reliable, consistent and cheap electricity. I plead to the 175 million Pakistanis and media out there to help form their own government and fight for this situation of political turmoil and energy crisis.
(The writer can be contacted at email@example.com)
This article was originally published at: The News
The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.