Not all of the projects currently being proposed sound like good ideas. For instance, about 1,100 of those 3,500 megawatts will be built in a nuclear power plant on the coastline near Karachi, perilously close to a tectonic fault line. ILLUSTRATION: JAMAL KHURSHID
Take, for instance, the decision by the Executive Committee of the National Economic Council (Ecnec) to approve $13 billion worth of projects that are expected to add about 3,500 megawatts of electricity to the national grid. On the surface, this seems like a good idea. What is wrong with adding to the nation’s capacity to produce energy, especially when demand is growing at a breakneck speed? Fair enough, but this country has not had a problem with adding capacity. Pakistan’s problem is the lack of a comprehensive energy plan, and despite repeated promises, the government has yet to tell us what it is. Power generation is a remarkably complex business. A power plant can take up to 10 years to build, and the larger ones frequently have costs that run into billions of dollars. Once operational, they are supposed to last for up to 30 years. A short-term gamble, this is not.
These plants are supposed to be built only after highly sophisticated analysis on the expected rise in their fuel prices, so that there can be reasonable projections of how much energy will cost over the next few decades. It is precisely the lack of this planning that got Pakistan into trouble in this decade, because plants built in the mid-1990s assumed that the record low oil prices of that decade would last forever. Now the government is about to force the privately-owned power sector to spend over $4 billion in trying to fix that original sin. Should we not, at least, try not to repeat that mistake?
And not all of the projects currently being proposed sound like good ideas. For instance, about 1,100 of those 3,500 megawatts will be built in a nuclear power plant on the coastline near Karachi, perilously close to a tectonic fault line. Need we remind the government of what happened to the Fukushima power plant in Japan? The nation deserves a fuller debate on energy policy. Mr Prime Minister, may we have that speech, please?
Published in The Express Tribune, July 8th, 2013.
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Let's not criticize the power policies which attracted many local and foreign investors to come and invest in Pakistan. Let's compare what is the price of GENCOS. Its horribly much above the price at which the Governemnt gets power from IPPs.These power policies were made by different Governemnts. had it been so bad, the next power policy would have taken care off. In today's free enterprise, people invest where there is peace and assurance of safety of capital first. Then comes the return they expect. Higher the risk, they would demnad higher price and vice versa. We have a hostile environment. Pakistan Governemnt failed to honour soveirgn gurantee also. The best thing the current Government did was to pay all IPPs and tried to get the case withdrawn against them and restore confidence of investors.
@C. Nandkishore: Pakistan already has enough thermal plants to meet its requirements. problem is that the country can no longfer afford the fuel expense needed to run them. Hence search for alternatives.
I thought the original sin was the signing off on high rates of whole energy purchase from IPPs by giving sovereign guarantees. There was more than a rumour of huge kick backs at the time, with a very dubious individual now holding a very high office in the thick of it. The results of that have been apparent for last few years.
Now we are going to compound that bad error by getting the same IPPs to convert to natural gas. IPPs are not going to foot that bill, the people of Pakistan will. Second, where is the natural gas going to come from ? As it is,gas supply is so low that domestic consumers have to endure load shedding in winter and summer. Gas pipeline from Iran is a good idea, if it goes ahead and if Pakistan can stand up to American pressure, but increases dependency on foreign powers good will.
There is no energy plan in Pakistan. Government "planners" have no clue over the growth in demand yet they are focusing on the furture price. Basic economics should tell these "experts" that demand/supply AND price are linked. Pakistan is taking reactionary decisions (rental power plants anyone ?) which is like using a band-aid to staunch carotid artery perforation.
Which brings me very nicely to my pet peeve. IMO, the problem in Pakistan is not power generation but wholesale power theft. Yet, successive governments continue to blame power capacity yet many including politicians (one example - the former Foreign Minister's spouse's company, its been in the press) , industrialists and even domestic consumers continue stealing electricity through various means. No one even considers fixing the distribution losses. Resolve that and a bulk of the power problem simply disappears.
@C. Nandkishore: Great. In everything that NS does I find lack of focus. +++++++++++++++++++++++++++++++++++++++++++ If I were his adviser I would have had just one topic on the table in China: Energy. Rest all can wait. After all what would he do on subsequent visits? The Chinese can smell his lack of focus miles away.
I thought the original sin was the signing off on high rates of whole energy purchase from IPPs by giving sovereign guarantees. There was more than a rumour of huge kick backs at the time, with a very dubious individual now holding a very high office in the thick of it. The results of that have been apparent for last few years.
Now we are going to compound that bad error by getting the same IPPs to convert to natural gas. IPPs are not going to foot that bill, the people of Pakistan will. Second, where is the natural gas going to come from ? As it is,gas supply is so low that domestic consumers have to endure load shedding in winter and summer. Gas pipeline from Iran is a good idea, if it goes ahead and if Pakistan can stand up to American pressure, but increases dependency on foreign powers good will.
"The Nation deserves a fuller debate on energy policy' Very good.. I live in a city where the 30 years are over. Now, we have a union that wants to keep jobs, very high paying management that wants to keep their job. The top man has a 1.5 million dollar salary. How can the average person trust their rational? Now, the plan is 'aging management',, not refurbishment or rebuild or dismantle, that all costs too much. Keep them working is the plan. In the meantime, population growth within 3,10,30km zone has grown tremendously. Now we have over 30 years of high level radioactive waste to deal with. Your plans must include 10 year build, 30 year operation, plus 30 years thereafter of population growth and proximity, waste solutions, evacuation solutions and clouded judgement after too many years of 'cheap energy' because the actual numbers are buried, and the greater expense is after, not during the 30years. And the bears will not part easily with their honeypots. Will such bears really care about the dense population? Radiation effects? Balancing energy needs with drinking water need? Only you can be the judge of your people. God give you wisdom.
I will give you a plan. Forget hydro, forget nuclear. The fastest power plants to build are the thermal power plants. These are quite easy. These can be built in three years. China is the leading supplier of all the equipments. Five plants of 1000MW each or eight plants of 660MW each can be built in three to four years. All you require is land. Rest all is standard design and off the shelf. For higher efficiency coal has to be imported. Thar coal has high ash content. Each MW costs a maximum of 4 crore Pakistani rupees. Also one single port can cater to this power plants eg Krishnapatnam in Andhra has a sanctioned power plants of 13,000MW and Tuticorin in Tamilnadu has 8,000MW.
A good editorial which raises critical points related to energy crises. A comprehensive plan for energy is the need of present time to provide short-term relief and to steer out our country from energy crises on sustainable bases. Since energy demand will keep increasing over time because of change in life style and increasing population. We will not be able to come out from energy crises until a comprehensive plan for a long period is developed and implemented.