Price of Power

Similarities in history

Seymour Hersh’s seminal book the Price of Power is a discourse on the politics of Nixon and Kissinger, particularly how, for short term political gains, these two politicians damaged the long term interests of the United States. Nixons’ trickery and penchant for trying to work the system to his advantage came back to haunt him and history now only remembers him as ‘Tricky Dick’.

The PML-N government has a similar problem, in a desperate attempt to be seen to be seen to be doing something about load shedding before the 2018 elections they have opted for the most expedient solutions instead of long-term sustainability, in particular a reliance on expensive imported coal-fired and re-gasified LNG power plants.

The world is moving away rapidly from calamitous coal for power generation.  In the UK coal-based power, at present, forms less than twenty percent of the total generation capacity; down from approximately forty percent six years ago. In fact Saturday 9^th April, 2016 will go down in UK’s history as the first day when power output from Solar resources exceeded that from coal: 29 Gigawatt hours (GWh) were generated from solar resources as compared with 21 GWh from coal.

By 2025 UK intends to phase out coal power completely, the current low wholesale price for power, and an increase carbon tax from £8 to £18/per GWh has now made coal power plants unprofitable.  Consequently UK has reduced its coal power capacity from to 10 GW, while solar, driven by incentives, has now increased to an installed capacity of 12 GW.

Manchester in the UK annually gets 1,017 hours of sunshine or an average of 2 hours and 25 minutes per day, as compared with (say) Multan, which receives 3,190 hours or an average of 8 hours and 45 minutes per day. So, despite more than three times the hours of sunshine than the UK, we continue to have negligible solar power capacity in our electricity mix.

Pakistan is one of the few countries that despite many energy efficient/environmentally friendly options still insists on setting up of new coal-based power plants, and that too based on imported coal. For example the under construction power plant in Sahiwal will occupy 1,200 acres of productive agricultural land, in addition to polluting the local environment, will utilize 120 cusec of fresh water for cooling purpose, which would be sufficient for agriculture use by over 40,000 farming families.

The traditional excuse for continuing to use coal-based power plants is that it is a cheaper fuel, unfortunately does not hold true any more as there are now cheaper renewable alternatives available, particularly as the coal is imported. Based on NEPRA records, the agreed price of power for Sahiwal project is 8.4 cents per unit, or similar to that of other fossil fuels, including the super expensive Re-gasified LNG.

We have abundant coal reserves in Thar, but somehow the government is reluctant to use Sindhi coal and prefers expensive imported Indonesian coal for its power plants.  Across the border, India has the same quality of lignite (low grade coal similar to that in Tharparker), these are being mined and the average cost for power generated in India from that coal is approximately 4.5 cents per unit or half the price of the Sahiwal power plant.

On the website for Bin Qasim power plant another imported coal-based plant, the justification for using imported coal is that local coal is not suitable as it has high Sulphur content and its calorific value is low. So, will someone please explain how similar quality coal is being used to fuel power stations in India and other parts of the world? The technology is available, but for reasons unbeknownst the government wishes import expensive coal.  Moreover, while the power produced with Indian coal is priced in Indian rupees, the power proposed to be produced at Sahiwal, Bin Qasim and at other plants in Pakistan is priced in US Dollars; so if the Rupee depreciates against the dollar – something plausible, given the current deficits, the price of our electricity is bound to increase appreciably. In fact the cost of the line losses and payment delinquency will also be totted into our bill, all in US dollars.

The price of solar PV (photovoltaic) panels has decreased by nearly 80% over the last five years, and it is expected that by 2020 solar will be the cheapest source of energy in the world, particularly for countries like Pakistan that have more than 330 days of annual sunshine in certain areas.

The Dubai utility DEWA has contracted solar power at 6 cents/ unit. In India the current price of solar power is 6.5 cents per unit, while in Mexico the price of solar power to be delivered in 2017 is approx. 4.5 cents per unit. Moreover, the energy is always priced in local currency, as there is no imported fuel. By comparison the price of solar power in the Quaid Azam solar park was an absurd 14 cents per unit, why? No one is able to explain.

Embracing solar power in Pakistan will require a fundamental change in mindset, from introducing smart metering, to allowing households to sell power back to the grid, innovative financing for purchase of the technology and tax breaks for producers, as well as encouraging local production of panels and batteries. But sadly our decision makers are not even considering such an eventuality.

So with so many exciting renewable energy options availbale why is the government pushing for reliance on expensive imported fossil fuel that will cause us a balance of payment issue for years to come, And will irreversibly damage our environment (a la China)?

Before her execution Marie Antoinette the French queen cried “Liberty! What crimes are committed in thy name” substitute “Liberty” for “Democracy” – and it would accurately sum up the situation in today’s Pakistan.