Energy Crisis in Pakistan and the role of IPP and

Renewable Energy Resources

Presentation by:
Haris Khan,
Muhammad Muzammal,
Abid Ali
Executive Summary
 Abstract
 Introduction, Energy demand & supply in Pakistan
 Power production sources in Pakistan
 Causes of Energy Crises
 Social & Economic Impact of Energy Crises
 Consequences of Energy Crises
 The Role of Independent Power Producers (IPPs)
 Solution to Energy Crises
 Agreements with other countries
 Solution, Recommendations & conclusion
 This report is based on the facts and figures
related to energy crisis in Pakistan and the role of
renewable energy resources to overcome this
issue. Firstly, there is an overview on energy
crisis, its causes and it’s effect on social and
economic aspects of Pakistan. Secondly, the role

Abstract
of renewable energy and the measurements
taken by the government of Pakistan to overcome
this dilemma has been deliberately discussed. It
also represent suggestions to overcome this
issue. It’s concluded that by owing the
recommended resources and solutions, Pakistan
can easily overcome the dilemma of energy crisis
it’s facing in form of load shedding and short fall.
 Introduction

Globally, the main cause of energy crises is related to the scarcity of resources
available which are related directly or indirectly with the formation of energy.

•The resources of energy is depleting day by day. Due to increase in population and
demand of energy, the use of energy has also been reached to its peak.

•The whole world is extracting nonrenewable resource like oil and coal to convert it
in to the required form of energy. There is always a downfall after peak, in this way
the energy resources are also depleting.

•Pakistan is also suffering the scarcity of energy resources. Such scarcity gave birth to
energy crises all over Pakistan. Electricity is the main outcome and the back bone of
all energies.

•The difference between production and demand of energy in Pakistan varies

drastically. According to the latest reports the production of electricity in Pakistan is
about 22,000MW, whereas the demand is figured out as 25,000MW. The deficit
between the production and demand is up to 3000MW.
Power Production Sources in
Pakistan Resources Total Production
Capacity
Thermal 14,365
   
Hydral 6,611
 
Nuclear 775
 
Wind 2064
 
Solar 1000
   
Total 22,957
 
 Causes of Energy Crises
• Poor Distribution Infrastructure:

• Power Theft and Under Recovery Bills:

• Poor Real Production Factor:

• Reliance On Non-Renewable Energy Sources:

• Ever Increasing Energy Demands:

• Low Rate of Hydro-Power Production:

• Fuel Shortage

• Return On Investment; the Circular Debt:

• Development of New Housing Schemes:

• Unmapped Renewable Energy Selection

• Overpopulations
 Social and Economic Impact of
Energy Crisis:
Energy is considered as the life line of an economy. In this 21st century it’s
impossible to survive without electrical energy. This is an era of digitalization so
every aspect of life is connected with electrical or electronic solution. Such crisis in
this era leave a remarkable impact on social and economic aspects of life and a
nation as a whole.

•Shortage of electricity affects all. Students of all ages are highly affected by the
shortfall of electricity, due to which there are so many problems and obstacles
mounted in their way of success and goal achievement.

•Pakistan is a country which is facing threatening and devastating shortage of

electricity due to which all sectors of economy are being adversely affected too. For
example, the economic progress is hampered by decline in agricultural productivity
as well as by halt in operations of industries. Lower GDP growth and high inflation in
recent years has also been attributed to shortfall in energy supply. As a result of
decline in energy supply, new industrial units cannot be opened, rather the existing
industrial units are gradually being closed.
 Consequences of Energy Crisis
Humanitarian Crisis
Energy crisis is actually the humanitarian crisis. Electricity has become the basic
commodity today. Load shedding and blackouts create frustration in society, lack of
tolerance, increasing rate of crime, rate of disputes, murders and such other social
evils. Workers on daily wages are suffering a lot due to this crisis.

Economic Effects
Energy crisis is penetrating in all key sectors of economy; shaking the quality and
distressing the standard of life of natives’ at large scales. Economic sector is being
adversely affected because energy is essential for the smooth running of its various
sectors. Economic losses are suffered due to less productivity and unusual
termination of operations due to load shedding. Inferior gross domestic profit (GDP)
and extraordinary inflation rate can be attributed directly to energy crisis. Textile
sectors have turned to local markets. Many branded textile producing industries like
Gul Ahmed and Nishat have shifted their set ups to Bangladesh and India due to
power crisis. This phenomenon greatly affected our economy.
 Consequences of Energy Crisis
Agriculture Sector
Agriculture sectors are also affected badly due to power crisis because productivity
profoundly depends on the electronic machineries like tube wells etc. Moreover,
production of insecticides, pesticides and fertilizers is also hindered. Thus, decline in
electrical production cause decline in agricultural output that is the backbone of
Pakistan’s economy

Unemployment:
As a consequence of the above mentioned consequences occurred due to energy crisis
like closing of units, breakage in operations, and shifting industries to abroad great
dismissals of workers lead to increasing unemployment. Moreover, increasing inflation
rate also worsened the condition. New employment opportunities are also not there
because businessmen, financers and investors have stopped investing in Pakistan.

Poverty
Decline in industrial growth, low agricultural production, deteriorating economy,
unemployment and wicked social conditions: all result in aggregating poverty.
Presently, about 40% of Pakistan’s population is living below the poverty line and this
numerical figure is increasing day by day. Sufficient control on energy crisis is
required instantly to eradicate this poverty.
 The role of Independent Power
Producers (IPPs)

The IPP is an entity, which is not a public utility, but that owns facilities to generate
electric power for sale to utilities end users. In Pakistan, private power producers
control about 30 percent of the total generation capacity, the electricity market was
opened to IPPs in 1990. Subsequently, 15 IPPs achieved commercial operations under
Pakistan’s first power policy 1994. Independent Power producers contribute
significantly in electricity generation in Pakistan but unfortunately, IPPs are
producing below capacity as a result of working capital shortage caused due to
outstanding amount of receivables from PEPCO. For several years afterwards, the IPP
program remained stagnant, only to be revived as a huge power shortage hit the
country in 2006-07. In a regional context, Pakistan offers a relatively sophisticated
operational and regulatory framework for the IPPs.
 Solutions to End Energy Crisis

In view of existing ground realities, it is impossible to overcome the crises by short

measures, however, we implement short term measures to reduce the crises. In order
to address this crises a two dimensional implementation measures are required.
These are:

a) Short term measures

b) Long term measures

a)Short terms Measures.

With power needed immediately, wind turbines look suitable because they are
relatively fast to install whereas dams and nuclear plants take five to six years to
complete and thermal power plants need two years at least. Wind power can play a
big part of solving Pakistan’s energy shortages, and now that comprehensive wind
maps already been researched in the country.
 Solutions to End Energy Crisis

b) Long term measures

•Pakistan has estimated as the world's third-largest known coal reserves of 33.0
trillion tons in the south-eastern part of the country i.e. Thar. The answer to long
term solution of power crisis in Pakistan lies in using local coal for power generation.
The electricity production from coal is also cheaper than thermal generation as 2
percent usage of Thar coal could produce 20,000 Megawatts electricity.

•In the long-term, Pakistan should also build more nuclear plants and dams.

•Rehabilitation and replacement of the outdated transmission and distribution

systems.

•Most important in the long term planning and goals must be to streamline the foreign
policy of the country according to its economic and energy needs. Improving and
increasing ties with future energy rich countries must not be neglected.
 Electricity Agreements of Pakistan with
other countries-China
The prospects for Pak-China cooperation in hydro-power projects are bright as the
Chairman of China Three Gorges Project Corporation (CTGPC) a state owned
enterprise and China’s largest hydropower developer had already offered financial
and technical assistance to develop hydro and wind power projects in Pakistan.
•These ongoing projects include Karot, Taunsa, Kohala and Bunji hydro-power
projects. Bunji dam will be constructed some 83km from Gilgit on Skardu Road. After
completion it will generate 7200 MW electricity.

•The government of Pakistan has signed an agreement with China for the construction
of the dam in 2009.

•Second important project has been Taunsa hydroelectric project in Punjab that will
generate 120MW electricity.

•Another proposed project is Kohala hydro-power project in district Muzaffarabad

that will have capability to generate 1100 MW electricity.

• Karot hydro-power project that will generate 720MW electricity will be completed
in four years time.

•China has offered help in the construction of 50 MW wind power project in Jhampir
(Sindh) that is to be completed in 2012. Moreover, China has planned to invest in 300
MW solar power projects in Pakistan
Pakistan-India Electricity
Agreement:
India has offered to provide Pakistan with 5,000 megawatt electricity to fulfill its
energy requirements on an urgent basis regularly which could be transmitted
through Punjab.

Pakistan-Iran Electricity Agreement:

Iran wants to install 1400 MW power project in Zahidan near Pakistan border from
where the electricity to be transmitted to national grid of Pakistan
 Suggestions, Recommendations &
•
Conclusion
Maximum outputs should be taken from installed units. Efficiency of these units
should be increased. Proper fuel supply to these plants should be insured.

• Power theft should be controlled. Implementation of law in this regard should

be made. Thieves should be punished severely so that it will become the
benchmark for others.

• A research center should be made by the government to explore new energy

producing resources available in Pakistan and to find out the ways through
which maximum output can be taken from installed power plants.

• Production from non-renewable power resources like solar, tidal and biomass
should be promoted at public level as well as individual level. Government
should provide finance, research and technical facilities as well as expertise to
common man through workshops and funds.

• Transmission and distribution system should be renovated and their great

maintenance should be carried out.
 Keeping in view the above mentioned ground
realities, it is concluded that burning issue of
energy crisis is not new to Pakistan rather this is
the global issue. Not only under developed
countries like Pakistan but also many developed
countries are threatened by energy crisis. As

Conclusion: tabulated above, Pakistan has already enough

installed capacity that can cope with the present
demand if all the installed units would operate and
give their maximum possible outputs. Moreover,
according to the given records, Pakistan has
many untapped fuel reservoirs which may meet
the increasing demands of the country. Influential
planning on the part of government is required. In
that case, this issue can be easily resolved.
Furthermore, efforts are required on individual
basis by wise consumption of energy as well as
timely bill payment system to improve the
efficiency of the concerned department.