Energy crisis: the critical options

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The sustained and criminal negligence on the part of two previous governments about energy needs of the country have brought its economy to near collapse and a melt down. One wonders what the mindset of the rulers and planners was during these years. Every nation needs 6-7% annual increase in energy supply to maintain its level of subsistence for the increasing population and its needs. It is mind-boggling to see that instead of increasing the energy supply, they multiplied the problems in energy such as circular debt. Consequently, even the available capacity remained at about 50-60% during these years.

 

The obvious result was the most damaging menace of loadshedding. This has alarmingly disrupted the normal life of citizens in many ways. This loadshedding has caused closure of many industries and deprived many of their livelihoods because of the shrinking job market. It is really shameful to see that many industries have been shifted from Pakistan to other countries simply because of loadshedding of power and gas. If proper planning was in place and the operational management had been to the mark, the nation would not have to face the crisis.

 

The new government of Nawaz Sharif will have to energise all the charisma at his command, employ scattershot intensity and will have to be fiercely demanding to achieve the satisfactory results in tackling the issues relating to energy crisis. His government would need to cut to the heart of issues with lapidary skill. It needs to be remembered that “Any system works as good as the people who run it”. President Reagan was not one of the smartest and intellectual American Presidents, but he had the courage and art of selecting the right people for the right job and, thus, proved to be one of the most successful. I have reasons to believe that Main Sahib would be able to put together a team who would deliver. He may not know much about the technology but he sure has an amazing instinct for what works.

 

Pakistan does need addition in generation capacity of power and supply of more gas to meet future development needs of the country and many proposals seem to be floating to generate more power from various sources. However, the most important factor that needs immediate attention is to ensure to get maximum output from the existing assets of power and gas. If we have a drum for oil with a big hole at the bottom, no matter how much oil we use to fill the drum it will never be full. Unless the hole is plugged the loss will simply multiply with more filling. Comprehensive, “Energy Efficiency Programs” is the only answer. The government owned thermal power plants are too old and are known to operate at about 23% efficiency. It is not hard to know as to how much loss is being incurred on the operation of these plants. They badly need rehabilitation, up-gradation and optimisation. With an investment of about US$ 500 million, the government owned 10 thermal power plants can be upgraded to operate at about 85% efficiency and thus, give around 1700-MW additional power.

 

Similarly, the existing hydro-power plants also need up-gradation. With an investment of about US$200 million these plants can be upgraded to produce additional about 1,150-MW.

 

A massive campaign to replace all streetlights country wide with LED lights which have 10 times more life, consume only about 30% power and high load factor energy-savers which consume only 18% of power compared with incandescent lamps can save up to 1500-MW. Investment for this programme can be made available. I say that PEPCO’s efforts to get a loan from ADB, buy energy-savers at double the market price and then try to distribute free among the consumers would never yield any positive results. It could be another scandalous effort with serious consequences for the country.

 

The energy efficiency programmes discussed above will give about 4350-MW additional power, to the national grid in a period of 12-18 months which should help mitigate shortage to a great extent.

 

However, the critical factor resulting in energy crisis is the theft of power and gas and so-called line-losses. In a presentation to parliamentary committee a few months back, the Ministry of Water and Power had stated that the losses of power had reached to a level of 45%. It is worth noting by all concerned that not only the national exchequer is being robbed but also the bill paying consumers are being taken for a ride. All electric meters are running 5-25% faster. Further the component of theft by those who can steal, is very cleverly passed on to the generally non-paying consumers i.e. the government departments and eventually the government (again public) ends up paying in the shape of subsidy or special relief. The thieves enjoy while all others suffer. Hundreds of billions are stolen every year and the good citizens are penalised.

 

The only viable solution to efficiently meet the energy needs of the nation lies in arresting the colossal theft and line-losses in both power and gas sectors. For this purpose, there can be two solutions: one administrative and the other technical. Under the administrative solution, the power and gas should be supplied to the provinces against payments deducted from their shares of NFC Award and let the provinces manage DISCOS and respective gas companies. However, this could entail serious problems particularly the capacity of the provincial governments to manage these assets. The losses will pile up and eventually the federal government will be asked to pay. However, a very formidable, permanent and dependable solution is the technical one.

 

The PML-N manifesto has already identified the possible solutions. The Transmission & Distribution grid performance up-gradation and improvement can save up to 1500-4000-MW in a period of not more than 24 months. The other most important step is the installation of a comprehensive smart metering network (AMI) with prepaid provision. The system will eliminate any human intervention and RFID communication network, through remote control, will enable the managing agency to detect any interference immediately. The line and theft losses will be reduced significantly and most importantly the recovery of revenue will be secured because the consumer would have prepaid for utility to be consumed. This system though costly and would require 3-5 years for completion, would immediately save up to 2000-MW by reducing the losses in the existing system and serve for all times to come. This is the most critical factor for controlling losses and ensuring recovery of revenue.

 

Similarly, the shortage of gas can be mitigated through i) detection and reduction of leakages in the existing system and ii) employment of smart metering network. With these programmes about 100,000 MMCF/year gas can be saved which should be sufficient to avoid gas load-shedding. The investments of over $10 billion for these EEP in power and gas can be mobilised, on the basis of “Pay As You Earn”.



Courtesy:  The News


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