ENERGY CRISIS; A POSSIBLE SOLUTION

The never ending power shortages and extensive load shedding, the ever present furnace oil crisis, the issue of circular debt, the increased cost of fuel imports, the ever increasing cost of electricity and automotive fuels are problems that are inextricably interlinked. We need to solve them desperately but traditional solutions are not forthcoming and the country sinks further into the morass of increasing debt and power shortages.

There is no immediate fix; at least not any conventional one. Outside the box?  Yes. There are always solutions outside the box.

In  2009, I submitted such an ‘outside the box’ proposal to the Government of Pakistan. My paper recommended a short term measure for bridging the gap between energy demand and generation capability using a very potent yet untapped source of electrical energy available in the country estimated at between 5000 to 8000 MW. The Oil and Gas Regulatory Authority (OGRA) carried out its independent survey and refined this figure to 7000 MW and then recommended the proposal to the Planning Commission for further action. The World Bank came into the loop and I ended up discussing my proposal with its economists. These gentlemen, while appreciating my efforts, were not too enthused with the proposal. They were of the opinion that Pakistan needed to push for the long term solutions to its electrical needs even while acknowledging that my proposal was a short term measure. Nothing came of it and the proposal died eventually somewhere around July 2010.

I still maintain that while there is no doubt that we need long term solutions; we do not have the luxury of waiting around for them to mature. There has to be a short term fix to help us out of our misery. No matter who sits in Islamabad, if that government is unable to provide electricity to the citizens in an immediate manner; it shall be doomed to failure. Unrest and riots will overshadow even the most well intentioned development plans.

In my paper I had highlighted the fact that there exists, within the country, a huge, already installed, power generation ability, presently dormant, completely untapped. This 7000 MW of available energy is in the form of backup/standby generators installed in every business concern across the country. Only those gensets that are larger than 150 KW rating are considered; the 7000 MW does not include the hundreds of thousands of small generator sets that meet domestic and small business needs. If the owners of these industrial generators are allowed to generate their own power, the shortfall would more than adequately be made up. Equally importantly, power generated in house would be reliable and not subject to any transmission losses or theft. Gas bills would be paid promptly by all businesses and this would ensure good cash flows. Circular debt would reduce. With power available, industry would be revived. It would trigger growth, increase production; create jobs. With a huge portion of industrial demand being met in house, other users would be provided more electricity.

The problem is that our national policy strictly prohibits the use of Natural gas for power generation. Only export oriented industries, which now are woefully few, are allowed gas for electricity production. This is why the bulk of installed generators that can produce the extra 7000 MW are diesel fueled. They will never be used as the burn an expensive, imported fuel. Diesel based electrical energy is extremely expensive and not viable.

My paper argued that the government should allow business houses and industry to use gas for power generation for the short term. Diesel generators can be converted to run on cheap natural gas. These conversions are being carried out in large numbers Iran, India, Afghanistan, Bangladesh. Indonesia, Africa, Europe, North and South America; wherever natural gas is available. Even in Pakistan where, sadly, because of the ban, this is being done in a thriving black market where unscrupulous individuals carry out illegal, inefficient conversions in Pakistan with the connivance of crooked utility personnel.

Pakistan has a shortage of natural gas but still allows its citizens to use it for transportation.

3.5 million households can travel from one darkness to another but we will not allow industry to use gas for power generation.

In fact we do worse. Consider this situation.

  • The Government provides Sui gas to Power Producers (both IPP and others).
  • The Power producers generate electricity.
  • About 30-40% is lost in transmission or stolen.
  • Poor transmission and theft also promote frequent outages, surges, low voltages that cause equipment damage and failures.
  • Disgruntled end users pay their monthly bills to the Utility Companies.
  • 60-70% of the total cost of electricity generated is recovered at best.
  • The utility companies never collect enough to service their debt.
  • SSGC and SNGPL do not get paid for the gas they supplied.
  • Liquid fuel suppliers suffer a similar fate.
  • This causes circular debt.
  • Increased debt means lower fuel availability.
  • Lower fuel supplies mean lower power generation.

THIS IS SHEER WASTE; GROSSLY INEFFICIENT. WHY DOES THE GOVERNMENT NOT GIVE THE GAS DIRECTLY TO THE END USER AND LET HIM GENERATE HIS OWN ELECTRICITY USING HIS OWN GENERATORS?

WHY CAN WE NOT IMPLEMENT THIS SHORT TERM MEASURE WHILE THE GOVERNMENT BUILDS DAMS AND NUCLEAR POWERPLANTS WHICH WILL TAKE YEARS.

THE ANSWER IS SIMPLE. CONVENTIONAL.

WE DO NOT HAVE ENOUGH GAS. THE IRONY IS THAT THE GOVERNMENT IS WILLING TO GIVE 7000 MW WORTH OF GAS TO IPPS AND WAPDA/KESC ON CREDIT BUT IS NOT WILLING TO GIVE IT TO THE END USER DIRECTLY FOR CASH.

GO FIGURE.

 

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