A pragmatic move

The new government’s energy policy

fter taking oath as Prime Minister of Pakistan for a record third time, the major policy initiative taken by Mian Nawaz Sharif is the decision to convert all thermal power plants into coal-powered power units to contain the burgeoning energy crisis that has put the industrial development in reverse gear besides adversely affecting the lives of the masses. He made this decision at a high level meeting called at Lahore to discuss the energy situation in the country, and which was attended by industrialists, CEOs of distribution companies, technocrats related to energy sector, officials of the Ministry of Water and Power and senior leadership of the PML-N. It was also decided to form a commission to look into the phenomenon of power theft and to suggest measures to eliminate the menace. Another decision made at the meeting was to remove the heads of WAPDA, PEPCO, managing directors and heads of distribution companies and to replace them with competent officers to get things moving in the right direction.

Ostensibly, the decisions taken at the meeting are very pragmatic, as tiding over the crisis requires a comprehensive strategy that adequately deals with issues pertaining to enhancement of electricity production, optimum utilisation of the already installed power generating capacity which is operating much below its potential, fixing financial variables hampering generation of electricity, managerial inadequacies and shortcomings, theft of electricity and above all rampant corruption in the power sector.

All these factors have contributed to the energy crisis in varying degrees and therefore a well-knit approach to grapple with all of them was needed simultaneously. Only the technical experts can tell how long it will take to switch-over to the coal generated electricity and at what additional cost but one thing is certain that the immediate benefit of this move would be that billions of dollars that are spent on the import of fuel for generating thermal power in the country will be saved besides reducing our vulnerability to the fluctuating oil prices at the international level. The money thus saved can be utilised to tiding over the problem of circular debt for now and forever. Notwithstanding the environmental concerns, the initiative is the best possible indigenous solution to our energy needs under the prevailing circumstances.

Thar, Sindh, has estimated coal deposits of 175 billion tones, sufficient enough to cater to our energy needs. According to the feasibility studies prepared on the coal deposits at Thar by Dr Samar Mubarak, Member Science and Technology, Planning Commission, these reserves can last well over 500 years and can be utilised to produce electricity, diesel and fertilisers. A 50 MW gasified unit is already in the process of being installed and likely to be operational very soon. Dr Samar believes that the success of this project will open the floodgates of foreign investment in Pakistan which is needed in the vicinity of US$ 175 billion. We also have coal in Balochistan.

Pakistan not only needs to overcome the present energy crisis but also needs to take care of its future needs to avert a similar situation in the future. According to IAEA, the demand for electricity in Pakistan is increasing by eight percent annually and by 2025, the country will require 49,078 MWs to meet its energy needs. That indeed is a very worrying situation. Apart from overcoming the power crisis in the short term by eliminating the circular debt and enhancing power generation through revitalisation of the existing installed capacity, we have to more than double the power generating capacity in the next 12 years to be able to conceive a sustainable development process in the country.

There is also an imperative need to take rational decisions on the energy-mix keeping in view the likely impact on our financial resources, reliability of supply and other relevant considerations. That element unfortunately has been missing in the past policy planning which has also contributed to the current energy situation. Some of the possible solutions to dealing with the problem of power outages that can possibly be employed are: the establishment of coal-based electricity units in every town and city catering to the local needs which can tackle the problem of line losses through the national grid and also increase the reliability factor of the electric supply. The government can ask and encourage the big industrial units to generate electricity for their own needs as is currently being done by a number of them. In most of the European countries, the big industries produce their own electricity for their plants and household consumption of their employees. This measure can reduce the burden on the national grid and spare sufficient electricity for smaller industrial units and households. Successfully dealing with power theft and corruption in the power sector and improvement in the management techniques and changing the prevalent culture of lack of initiative can also immensely contribute to improving the situation.

There is, however, an unqualified consensus at the global level that the energy security – without which no sustainable economic progress can be conceived – can best be secured by switching over to renewable energy resources which include wind energy, solar energy and hydel power. Pakistan has a potential of generating 150,000 MW wind energy, out of which nearly 40,000 MW can be produced from the Sindh coastal corridor, according to a report of the USAID. Similarly, there is an infinite potential for generating solar energy.

In view of the controversy over construction of Kalabagh Dam and a pall of uncertainty hanging over the Basha-Diamir Dam in regards to its financing and international reservations on its location, we have no choice but to tap the wind and solar energy resources besides utilising our indigenous coal reserves for generating electricity. How well we can capitalise on the availability of these resources and how we manage to raise the finances required to tap them, only time will tell. Nevertheless, it will require a well-thought out strategy with broad-based support and Nawaz Sharif probably seems fully mindful of this fact when he talks about keeping all the stakeholders on board.