electricity shortage in pakistan in

8/7/2019 Electricity shortage in Pakistan in

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Electricity shortage inPakistan in comparisonwith air conditioners

imported andHusnain Afzal Page 1 of 1 mc060401747


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Produced in 2005-2006Submitted byHusnain Afzalmc060401747

Fall 2008.

Vir tual University ofPakistan, Defence Road

off Raiwind Road, Lahore.Husnain Afzal Page 2 of 2 mc060401747


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Executive Summary:Electricity Shortage in Pakistan becomes more severe during the year 2005-2006 due

to extensive use luxurious appliances of electricity by domestic users.According to

the report, in the fiscal year 2005-06, some 2,250MW power was required to operate

some 7.7 million electric home appliances i.e. number of refrigerators in the country

were 1,100,000 and power required for them was estimated at 110MW, the number

of deep freezers were estimated at 200,000 and required power for them stood at

60MW, some 1,000MW power was required to run 2 million air conditioners. Thesefigures are so alarming for Pakistan because in the decade starting from 1991 these

appliances are less than a half million. the study was made on the topic shortage of

electricity in Pakistan in comparison with air conditioners imported and produced

during 2005-2006.in this study the hypothesis were set as, is

Electricity shortage in Pakistan is caused by Industrial growth or massive use of Air

conditioners by domestic users. However after finding out and analyzing the data

that the increased domestic use of air conditioners is the cause of electricity

shortage in Pakistan.

Husnain Afzal Page 3 of 3 mc060401747


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Table of Contents:Topic Page No.

Acknowledgement

1.Introduction 6

1.1.Introduction to the Problem 61.2.Objective 9

1.3.Significance of the study 9

2.Literature review 10

3.Problem Statement 15

4.Theoretical Framework 16

4.1.Inventory of Variables 16

4.2.Direction of Relation 16

4.3.Explanation of the Relation 17

4.4.Propositions 17

5.Hypothesis 18

6.Research Design 19

6.1.Data Collection Techniques 19

6.2.Population and Sample 19

6.3.Tools of Data Collection 19

7.Data Collection, Processing and Analysis 228.Findings 32

9.Conclusion and Recommendations 33

10.References 34

11.Questionnaire 35



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AcknowledgementThanks to the ALLAH Almighty who gave me courage and willpower to

complete the task I have been given.



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1. Introduction:

1.1. Background of the Study:

This study was made to demonstrate the effects of massive installation and usage of airconditioners in Pakistan during 2005-2006.Before going to details here is the some textwhich gives you the overview of the Pakistans economy, and Pakistans over all energyusage.

The introduction phase consists of three parts.

1. Pakistans overall economy review2. Pakistans energy overview3. And the third portion consists of introduction of load shedding problem in

Pakistan due to increase in the usage of air conditioners.

1. Pakistans overall economy review (2004-2006)

Pakistan's economy has recovered from years of sluggishness, caused primarily todroughts, with growth experienced in the agriculture, industry and service sectors. Infiscal year (FY) 2004/2005 (ending in June), Pakistan achieved gross domestic product(GDP) growth of 8.4 percent and in 2005/2006 the country had GDP growth of 6.6percent. High inflation (9.1 percent) in 2004/2005 was attributed to escalating oil prices,higher housing rents and food item shortages. country in 2005. In an effort to decreaseinflation, the central bank of Pakistan announced that it would raise interest rates. The



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strategy worked, with inflation decreasing to 7.6 percent by the end of FY 2005/2006.The International Monetary Fund (IMF), and the World Bank, both major donororganizations to Pakistan, have acknowledged the favorable performance and progress inPakistans structural reforms, but have stressed even greater reform in the publicinstitutions and the public energy sector where progress has been slow. In 2004, the IMF

approved a fresh loan of nearly $250 million as part of its overall $1.5 billion aid packageto Pakistan. In 2005, the United States began the first installments of a $3 billion aidpackage, which will continue through 2010. In 2006, the World Bank approved loans of$185 million for various reform and infrastructure projects, in addition to the nearly $850million loaned to the country in 2005.The devastating earthquake that stuck Pakistan inOctober 2005 destroyed lives and caused considerable damage to the countrysinfrastructure. However, the majority of the damage occurred in rural areas of the countryand had minimal impact on the economy. Furthermore, international aid inflows in theaftermath of the earthquake have served to bolster Pakistans economy. The United States pledged $510 million for rebuilding Pakistani infrastructure, but relief coordinatorsestimate that Pakistan will need billions of dollars and up to ten years to fully rebuild.

Pakistan and India decided to extend aid to one another after the earthquake. They alsoagreed to continue confidence building measures, which include the notification ofmissile testing, creating new bank branches and increasing the number of airlinedestinations in both countries. In recent years, the combination of rising oil consumptionand flat oil production in Pakistan has led to rising oil imports from Middle Eastexporters. In addition, the lack of refining capacity leaves Pakistan heavily dependent onpetroleum product imports. Natural gas accounts for the largest share of Pakistans energyuse, amounting to about 50 percent of total energy consumption. Pakistan currentlyconsumes all of its domestic natural gas production, but without higher productionPakistan will need to become a natural gas importer. As a result, Pakistan is exploringseveral pipeline and LNG import options to meet the expected growth in natural gasdemand. Pakistans electricity demand is rising rapidly. According to Pakistanigovernment estimates, generating capacity needs to grow by 50 percent by 2010 in orderto meet expected demand.

2. Pakistans energy overview

In recent years, the combination of rising oil consumption and flat oil production inPakistan has led to rising oil imports from Middle East exporters. In addition, the lack ofrefining capacity leaves Pakistan heavily dependent on petroleum product imports.

Natural gas accounts for the largest share of Pakistans energy use, amounting to about 50percent of total energy consumption. Pakistan currently consumes all of its domesticnatural gas production, but without higher production Pakistan will need to become anatural gas importer. As a result, Pakistan is exploring several pipeline and LNG importoptions to meet the expected growth in natural gas demand. Pakistans electricity demandis rising rapidly. According to Pakistani government estimates, generating capacity needsto grow by 50 percent by 2010 in order to meet expected demand.



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Table evaluating Pakistans Energy Supply.

Sector Energy Supply

Oil 29.40%

Natural Gas 50.30%

Hydroelectricit

y

15.69%

Nuclear 1.20%

Coal 7.60%

LPG 0.40%

Diagram evaluating Pakistans Energy Supply.

Oil, 29.40%

LPG, 0.40%Coal, 7.60%

Nuclear, 1.20%

Hydroelectricity,

15.69%

Natural Gas,

50.30%

Oil

Natural Gas

Hydroelectricity

Nuclear

Coal

LPG



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3. Introduction of load shedding problem in Pakistan due to

increase in the usage of air conditioners:

Pakistan is facing a huge electric power crisis today. This crisis appears insurmountable

in the near or even long-term future, unless proper understanding and correctimplementation is undertaken on priority basis. At present total power productioncapacity in the country is about 19,500 MW, out of which Hydel Power is only 6,500MW, balance of 13,000 MW is thermal either using Natural Gas or Furnace Oil. Smallcapacity of 450 MW is Nuclear and only 150 MW is through coal.

The problem of massive load shedding in Pakistan was properly introduced in 2004-2005.Because in these days the overall GDP growth was very high near about 9% peryear. In these years the business progress was very well and banks industry grows at avigorous speed. Banks introduces new schemes in which peoples were provided homeappliances on lease. Thus resulting an increase in production and exports of homeappliances. These home appliances not only include the necessity objects like refrigeratorbut also the Luxury objects like Air conditioners. Although most of the air conditionerswere made in Pakistan but 60% of the raw material used in air conditioners was importedfrom different countries of the world.

Due to these reasons Pakistan was hit badly by two basic problems such as budget deficitand shortage of electricity.

Now a days the consumption of Air conditioners in Pakistan is slow comparing to 2005-2006.But the Load shedding Problem becomes more severe.

1 . 3. Objectives of my research:

The main objective of my research is to find out either the consumption of airconditioners in Pakistan is responsible for Load shedding or the growth in industrialsector in Pakistan is responsible for load shedding, or no installation of new power plantsis responsible for the problem.

From different resources it is also confirmed that during 2002-2006 Pakistans industrysector was also at boom so without testing the hypothesis we cannot say that the Loadshedding problem is due to usage of Air conditioners. Here we also have to note down

that the ratio of growth in consumption of electriicty to production of electriicty.

To find out the past trends of electriicty consumption and present and future situations isalso an objective of my research.

1. 4. Significance of the study:



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The research work on load shedding will help us to demonstrate the true reasons of loadshedding problem. It also helps us to find out the total energy consumption andproduction of Pakistan. The province wise electriicty production and consumption and abrief note on line losses of electriicty due to bad power supply system of Pakistan. Thestudy will also help us to evaluate how much growth is needed in electricity production

sector to cease the load shedding problem. In our study we will also compare Pakistansenergy production consumption ratio with other countries of the world. Whenever we

2. Literature Review:

Almost two years ago the then WAPDA chairman who happens to be a caretaker ministeradmitted that WAPDA cannot meet the current demand for electricity. Its surprising that

such a senior and experienced person took so long to find this out. On top of that thegovernment which talked about Pakistans supposedly booming economy failed tounderstand the gravity of the situation. General Musharraf (R) after becoming ChiefExecutive used to talk about building dams especially Kalabagh Dam. This was one ofthe many promises he failed to keep. Even after that very few power plants have been setup to meet the demand for electricity. During the second government of Benazir someindependent power plants were set up. Had they not been setup then we would have had amuch bigger crisis with life almost coming to a standstill. I come from the softwareindustry which has been badly hit by the present power crisis. On an average thegenerator at my office is on for three hours. Our work is not much affected but overall thecompanys operating expenses have increased. The policy makers of Pakistan have so far

failed to understand one thing. They do talk about making dams and setting up nuclearpower plants but why do they not understand the importance and benefits of alternateenergy sources such as solar, windmill energy etc. They are cheap and quick methods forproducing electricity. Pakistan is a very blessed country because solar energy is availablein most cities all year round similarly wind energy is readily available in the coastal areas.These energy sources if tapped can be of great help in reducing the current demandsupply gap. After the founding of Pakistani State in 1947, the Governments economicpolicy concentrated attention on developing an economic infrastructure, achieving self-



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sufficiency in food, and developing export industries. However, an intrusive and oversized public sector, an over regulated economy, excessive discretionary powers oftenincompatible with the level of the official, and an absolute lack of transparency, providethe optimal environment for opportunities of corruption restricting the economicdevelopment in the country. Combination of these factors with weak accountability

ensures that economic backwardness get entrenched into the entire fabric of society.Despite the pervasive pessimism that is undoubtedly felt, we have come across many whowould willingly embrace new practices if only the scourge of corruption could be liftedfrom their lives. The countries that have surged ahead, on the other hand, arecharacterized by high level of human capital accumulation where the educated labor forcehas raised the level of output and the rate of growth over a sustained period of time.Inefficient public expenditure process, higher cost of basic input, lack of skilled humanresources, corruption and nepotism restrict Pakistan far behind in development accordingto recently announced World Bank report. Pakistan is suffering from shortage ofinfrastructure in the water, irrigation, power, and transport sectors. Infrastructure isessential for sustained growth and competitiveness both in the local and international

markets. The gaps between demand and supply in these sectors are alarming. The plansneeds to put in place urgently, these critical shortages would continue to undermine theefforts to improve socio-economic indicators and to reduce poverty. Without adequateirrigation resources, power and transport infrastructure, the very sustainability of Pakistanas an independent nation may be at stake as shortages could lead to increased socialdiscontent and disharmony amongst the federation and the provinces. Pakistan is on thelist of the most water stressed countries in the world, and forecasts indicate that availableresources are depleting rapidly, possibly leading to a state of water scarcity in the nexttwo decades. Much of the water infrastructure is in poor repair and Pakistan has to investalmost Rs 60 billion per year in new large dams and related infrastructure over the nextfive year. In the energy sector, Pakistan will face severe power shortages ofapproximately 6,000 megawatts by the year 2010 (equivalent to about three Tarbeladams) and 30,700 MW by the year 2020.The per capita energy consumption in Pakistanis amongst the lowest in the world and a lack of adequate energy resources precludesindustrial growth affecting all sectors of the economy. Similarly, the transport sectorinefficiencies are costing the economy between 4 to 5 percent of GDP each yearindicating the need for massive investment in roads, rail, air and ports as indicated in theWorld Bank report. There were large gaps have been observed between the actual andallocated funds for infrastructure development projects. Public agencies were taking toomuch time and delivery was too little. Majority of the developmental projects were basedon political priorities. The infrastructure projects in Pakistan cost twice as much and takethree times longer than planned time there are few number of known firms in Pakistanand majority of big projects were given to them. There are implementation, monitoringand feedback missing in the projects and the average cost of every project increases morethan double due to several gaps. Given the paucity of human resources and materials, thepoor planning and management skills, and the inability to timely attract substituteexternal implementation resources, it appears difficult that the large infrastructureprojects can be implemented on-time and within budget unless some drastic reforms areundertaken. Out of the four broad thematic areas of business environment, humanresources (HR), plant and equipment and construction materials, HR and business



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environment were identified as having the maximum number of constraints. Delays inproject implementation reflect poor planning, programming and weak implementationcapacity. Public agencies take on too many projects in their development programs andend up delivering little, and what they do deliver is often determined by politicalpriorities. The delays in payment, imbalanced contracts, inefficiencies and corruption in

the system force contractors to incur additional financial and economic costs resulting insqueezing the already poor margins in the industry. The contractors and consultants arenot being paid the right cost for products and services. Costs of materials and equipmentinputs in Pakistan were found to be about 200 percent higher as compared to othercountries in the region, while contractors rates in Pakistan were more or less the same asthose prevailing in the region. Local rates despite appearing to be competitive in aregional context are in fact unworkable - most contractors also contend that rates are low, precluding adequate profit margins and allowing better salaries to professionals andworkers. Given the current disparity between market rates and actual product costs,demand-supply gaps will widen when the Medium Term Development Framework(MTDF) program is implemented, unless rates are increased. Pakistan should lesson from

international case studies on the development of the construction industry and theliterature reviews clearly show that a holistic long-term planning and a detailed strategymust be evolved with a clear vision and commitment towards developing the industry,and this process may take as long as a decade or more of sustained effort. TheGovernment needs to make serious efforts to strengthen revenue mobilization, contain itsunproductive expenditure, and utilize scarce external assistance more efficiently.Thecountry is facing a huge electric power crisis today. This crisis appears insurmountable inthe near or even long-term future, unless proper understanding and correctimplementation is undertaken on priority basis. At present total power productioncapacity in the country is about 19,500 MW, out of which Hydel Power is only 6,500MW, balance of 13,000 MW is thermal either using Natural Gas or Furnace Oil. Smallcapacity of 450 MW is Nuclear and only 150 MW is through coal. Although gas is to beprovided for 5800 MW to various thermal plants, but in actual fact much less gas is beingmade available, the deficiency is being filled through furnace oil. It can be inferred that inthe recent past, only furnace oil was used as fuel for about 9000 MW generation. It isvery important to understand the consequence of the prevailing situation. Current price offurnace oil is about Rs 49,000 per ton, which amount upto Rs 49/- per kg. On an averageone kg of furnace oil produces 3.8 kWh of electricity. Thus, the cost of furnace oil forgenerating one unit of electricity is about Rs 13. On top of this the fixed cost of a thermalplant works out to be about Rs 3 per unit. Therefore, one unit (kWh) of the electricity produced by all thermal plants using furnace oil is Rs 16 per unit. According toWAPDA/IPP agreement, the private power producers will charge WAPDA the actual fuelcost for which they have a direct contract with PSO. As we all know that WAPDA tariffcharged from the consumers is about Rs 5 per unit (kWh).The production cost of furnaceoil electricity is Rs 16 per unit, add to it the transmission, distribution cost (includingloses), the total cost of such electricity works out to approximately Rs 22 per kWh. Thedifference between WAPDA tariff and the furnace oil electricity is Rs17 per kWh. It isestimated that the country consumes at least 25 billion units of electricity producedannually through furnace oil, which amounts to the total deficit of Rs 425 Billion. IfWAPDA has to balance its books it would require a subsidy of Rs 425 Billion. This



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deficit is somewhat reduced due to cheap power produced through hydel energy andnatural gas, but the deficit cannot change substantially, unless bulk of electricity isproduced through hydel energy. Obviously, a deficit of Rs 300-350 Billion cannot besustained, the government does not have resources to pay such a huge subsidy, and it isalso not feasible to increase the power tariff very much. Therefore the power crisis is far

greater than what is being perceived. In the absence of extremely heavy subsidy, WAPDAis delaying payments to IPPs and also to the oil companies. The result is that IPPs arenow producing much less electricity than their capacity. To any planner, it should beobvious that the country cannot afford electricity produced through oil. Indigenous fuelslike coal, gas, atomic will have to be developed and developed quickly. The final solutionhowever lies in depending on the hydroelectric renewable energy, but unfortunately thenarrow minded bickering on construction of dams has persuaded the planners to find aneasy solution, which we cannot afford any more. Since the shortage or high price ofelectricity has severe detrimental effect on all sectors of economy, the situation calls forconcerted short-term, medium-term and long-term actions to overcome the problem ofenergy shortage. Way Forward: In the short-term, the shortages have to be somehow met.

The foremost immediate action which can give some relief is the conservation of energy.The government has already announced certain measures like shutting down power onbillboards, hoardings and neon signs. Recently in Lahore super size televisions have beeninstalled on important traffic points. In order to keep the temperature down airconditioners are installed behind these sets. In spite of government directions, the energysaving measures is not being implemented. Shops use excessive lights, which can beconveniently reduced. A suggestion that cities are divided in zones, and the market onthese zones be closed on different days, can also save peak time energy usage. In order toimplement conservation measures, the nazims, naib nazims should visit the areas and tryto convince and negotiate with the people, shopkeepers etc requesting them to cooperatein the overall interests. At present the IPPs, and WAPDA owned thermal plants areaveraging about 50 percent plant factor, which means that they are not being used to theirpotential level, 70 to 80 percent plant factor is quite feasible; this would require bettermaintenance of such plants. A higher plant factor on these power stations can provide 20to 30 percent more energy, which will circumvent the present shortages to a certainextent. Improving the plant factor of the existing plants is far more economical thensetting up new plants, although new plants will still be needed. One of the reasons for lowplant factor is that the funds are not made available for the purchase of oil; solution forthis factor will help in short term increase in energy production. The government hasannounced that immediately 1200 MW of additional plants will be set-up. If these plantswill operate on furnace oil, the deficit will further increase. At present the country hasabout 28 Trillion cft of recoverable gas available, the yearly consumption is about 1.2Trillion cft, which means that even if gas consumption is increased, the existingrecoverable gas will be sufficient for the next 15 years. Therefore the additional thermalgeneration should be based on gas, but in order to make additional gas available, the gaspressure and its transmission system will have to be enhanced. The money saved by usinggas instead of furnace oil, should be invested in developing new gas fields which havealready been discovered. Mid and Long Term: The oil prices are not going to come downdrastically; therefore all efforts are needed to stay away from oil. For thermal plants onlyCoal and Natural Gas should be used. Vast deposits of coal exist at Thar, but it is



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inconceivable why the mining of this coal has not yet started. There is a number of newgas fields discovered; but their development has been put on the back burner, again forsome unknown reasons. The gas purchase agreement with Iran be finalised immediately,even without India. A large power station using this gas can be installed at Gwadar, 500KV transmission lines can bring the power to load centres. In addition agreement with

Kazakistan is persued diligently for the import of gas. Currently the country loses 29billion units of electricity annually due to heavy losses in the system. All efforts must begenuinely applied to reduce the losses. If losses are reduced by even 5 percent, the savingwill be over 7 Billion rupees. For hydroelectric projects, the large ones can only be builton the Indus River, where not only hydroelectricity can be produced, but highly neededwater storage can also be a by-product. Some legitimate objections on the environmentand social impacts of large dams are there, but solutions for such objections can besatisfactorily found. The will of the government leaders is needed, with the presentcoalition partnership in the centre, matters can be resolved. Experts from variousprovinces can get together and put forward a solution for mitigating the objections. It wasdue to the clear vision of the leadership that the Tarbela Dam was constructed, without

which where would we have been today. Similar visionary approach is needed andneeded now. There are a number of other attractive runs of the river hydel projects whichare being offered to the Private Sector. None of these projects have yet started, becausethe tariff is still not finalised. With the huge losses being accumulated in thermal plants,again it is strange that the hydel projects in the private sector are not being encouraged.Under the present circumstances, a rational and market oriented policy has to be adopted,hopefully the present government will immediately look into this. It is good to know thatthe work on Neelum Jhelum Hydro Project (900MW) has started by WAPDA.The currentpower crisis is grossly due to very high oil prices, and the country has to prepare itself atleast for the next several years to somehow cope with it, since no immediate cheaperalternate solutions are available. It has been a big set back that new Hydel Projects havenot been undertaken, neither the indigenous coal mining has started, investments in theexisting as well as new gas field have been lacking. The policy orientation needs a drasticmodification and indigenous resource like hydel energy.



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3. Problem

Statement:

Do the increased

consumption and

production of Air

conditioners in

Pakistan is

responsible for severe load shedding in Pakistan or other

factors like growth in industry and no installation of electricity

capacities were responsible for that.


ElectricityShortage

Air ConditionersNEC

Installed

Industrial Growth


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4. Theoretical Framework:

After analyzing the Pakistans energy shortages and their different reasons for theseshortages the following variables were identified.

4.1. Inventory of Variables:

Dependent Variable:

Electricity

Independent variables

Air conditioners

New electricity capacities installed

Industrial growth

4.2. Direction of Relations:

In above relations usage of air conditioners negatively affects electriicty supply.



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No installation of new electriicty capacities negatively influences the electricitysupply.

And in last industrial growth positively influence the electriicty supply.

4.3. Explanation of established relationships amongvariables.

The Increased usage of air conditioners in homes will ultimately affects the electriictysupply in the country because it is very difficult to control production process in thecountry. If the income levels in the country are high then people will ultimately useluxury items. on the other hand heavy industry also needs much electriicty to generateproduction in this scenario we can say that if during 2005-2006 new industries open thenthis will also create shortage however this could be decided in the findings portion of thereport that either industrial growth or no installation of electriicty capacities or massive

usage of electriicty appliances is responsible for this problem.

4.4. Inventory of propositions in a sequential order:

Massive domestic usage of air conditioners due to high income level negativelyaffects electriicty supply.

No installation of new electriicty capacities negatively influences the electriictysupply.

The industrial growth during 2005-2006 positively influences the electriictysupply.



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5. Hypothesis:

1. Null Hypothesis:

H0: Massive usage of air conditioners in the country is responsible for the electriicty

shortage in the country.

1. Alternative Hypothesis:

H1: Massive usage of air conditioners in the country is not responsible for electriicty

shortage in the country.

2. Null Hypothesis:

H0: Growth in industrial sector is responsible for shortage of electriicty in Pakistan.


H1: Growth in industrial sector is not responsible for the shortage of electriicty in

Pakistan.

3. Null Hypothesis:

H0: No installation of new electricity capacities is responsible for electriicty shortage

in Pakistan.


H1: No installation of new electricity capacities is not responsible for electricity

shortage in Pakistan.



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6. Research Design:

6.1. Classification of research:

In my research the purpose of study would be descriptive and also quantitative becausesubstantial information is known about situation and hand on how this particular issuehave been solved in past.

6.2. Data Collection Techniques:

As my research is based on historic data. Such as data regarding shortage of electriicty inpakistan during 2005-2006.So the process of data collection involves two steps first stepwas to collect data from two historic sources such as different government sources andthe second source is private institutions such as newspapers.and the second step was tosend questionnaire to different energy suppliars of the country.these resources arecontacted through PEPCO to provide necessary information. For the purpose of datacollection a request was sent to PEPCO to provide data regarding Electriicty.The research was of quantitative nature and the quantitative data was collected throughvarious sources.

6.3. Population and Sample:

As my research is totally based on historic data so for data collection the population is all power supply companies of Pakistan.These all companies are headed by PEPCO.(Pakistan Electric Power Company. ) These companies are responsible for electric supplyin pakistan. A list of these companies is given below.



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No. Electricity Supply

Companies.

1. LESCO.

2. GEPCO.

3. FESCO.

4. IESCO.

5. MEPCO.

6. PESCO.

7. HESCO.

8. QESCO.

9. TESCO.

10. NTDC.

11. GENSCO.

12. KESC.

13. GENCO I.

14. GENCO II.

To collect data these companies are contacted through PEPCO for bettercooperation.Thus the data collected from these sources is divded into two froms one isdomestic consumption of electricity and the other one is commercial consumption ofelectriicty during 2005-2006. The staff of PEPCO also forwards me a report made byEngineer Tahir basharat cheema the chairman of PEPCO. which was presented to thePrime minister.

6.4. Tools of Data Collection:

The data collection tools were Filling up a questionnaire in which the details forelectriicty consumption and production were asked from the staff members of thsecompanies.the analysis data was also colleced from different news papers, websites andother sources. The responsible members of different electric supply companies arecontacted through e-mails and Telephones. The e-mail id,s and phone numbers are given



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in references.

6.5. Forms of data collected:

Thus data collected from different sources are of two typs one type is completely filledquestionnaire and the other type is different reports on Electriicty supply andshortage.The data thus collected is and managed so that results can be identified and alsothe trends of electriicty consumption during different seasons in Pakistan. There are twoobjectives of data one is based on past situation and one is based on present and futuresituations.



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7. Data Collection,Data Processing and

analysis

The Primary and secondary data collected from different sources thus managed. Primarydata was collected in the form of filled questionnaire and the secondary data wascollected in the form of reports of different journalists and other government officials.The data collected in the form of filled questionnaire is of primary nature thus it isdirectly analyzed by using different statistical tools such as coefficient of variation andother measures of location and measures of dispersion. Then the data was arranged andpresented in a graphical form so that any one can analyze the situation of electriictyshortage in Pakistan.

Here is the picture of Forecast of Pakistans Energy Consumption andproduction. (Source: World Energy Data.)



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As it is clearly evident from the figure that consumption of electricity was increasing dayby day.

Now looking at the data which was collected from different electriicty supply companiesof Pakistan.

Before going to detai led studi es here are some Concepts and

Definit ions

CONCEPTS AND DEFINITIONS:

WATT: Watt is a unit of power. A watt is defined as the rate of doing one joule (J)of work in one second. Common units of power are multiple of the watt.These are as under:

One Watt (W)

=

01 J/S



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One kilowatt (KW)

=

103

J/S

One Megawatt (MW)

=

106

J/S

One Gigawatt (GW)

=

109

J/S

KILOWATT HOUR: Kilowatt hour is a precise measure of energy and work. It is the workequivalent to 1000 watts (Joules per second) over one hour time.

Work = Power x TimeOne Kilowatt hour (Kwh) = 3.6x103 Joules

One Million watt hour (Mwh) = 3.6x106 JoulesOne Giga watt hour (Gwh) = 3.6x109 Joules

Domestic Supply

It includes power supply to residences, places of worships, approved charitableinstitutions, Government approved educational institutions, hospitals etc.

Commercial Supply

It includes power supply to offices and establishments such as shops, hotels,restaurants, petrol pumps, private hospitals, cinemas, offices of associations andconsultants etc.

Industrial Supply

It means power supply for bona fide industrial purposes in factories including the supplyrequired for the offices and for normal working of the industry and also for water pumpsand tube wells other than those meant for irrigation or reclamation of agriculture land.

Agricultural Supply

Agricultural Supply means a supply for lift Irrigation Pumps and/or Tube wellsintended solely for irrigation or reclamation of agricultural land or forests, and includessupply for lighting of tube well chamber.

Maximum Demand

Maximum Demand means the highest demand obtained in any month measured over



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successive periods each of 30 minutes duration.

Public Lighting

Public Lighting means illuminating public lamps.

Bulk Supply

Bulk Supply for the purpose of this tariff means a supply given in a bulk at onepoint to consumers having their own distribution facilities, i.e. own grid station etc.

Beside that Electricity consumed in auxiliaries and system losses are referred as otherConsumption.

Statistics of Number of Consumers of Electricity by Branch in Pakistan

All Nos. are in (000)Branch 1998-

99

1999-

00

2003-

04

2004-

05

2005-06

1 2 3 4 5 6 7

Nos. % Nos. % Nos. % Nos. % Nos.

Total 12,248 100.0 13,192 100.0 15,841 100.0 16,718

100.0 17,795

1

Domestic 10,005 81.7 10,783 81.7 13,086 82.6 13,888

83.1 14,838

8

Commercial

1,840 15.0 2,001 15.2 2,313 14.6 2,379

14.2 2,476

1

Industrial 220 1.8 224 1.7 230 1.5 234 1.4 245

Agriculture

174 1.4 175 1.3 201 1.3 204 1.2 223

Others 09 0.1 09 0.1 11 0.1 13 0.1 13

FIG.7.1



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Partition of consumers of electriicty by branch

Agriculture

1%

Others

0%

Domestic

84%

Commercial

14%

Industrial

1%

Domestic

Commercial

Industrial

Agriculture

Others

Statistics of Electricity Consumption in MKH by Branch

Branch 1998

-99

1999

-00

200

3-04

2004-

05

2005-

06

Unit

s

% Units % Units % Units % Units

1 2 4 5 6 7 8 9 10

Total 45,756

100.0

46,358 100.0

59,316 100.0 63,298 100.0 70,241 1

Domestic 19,268

42.1 21,485 46.4 25,394 42.8 27,601 43.6 30,720 4

Commercial

2,381

5.2 2,544 5.5 3,586 6.0 4,080 6.4 4,730

Industrial 12,924

28.3 13,972 30.1 19,738 33.3 20,561 32.5 22,441 3

Agriculture

5,620

12.3 4,542 9.8 6,669 11.2 6,988 11.1 7,949 1

PublicLighting

225 0.5 239 0.5 271 0.5 306 0.5 353



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BulkSupply& others

5,338

11.6 3,576 7.7 3,658 6.2 3,762 5.9 4,048

FIG.7.2

Electricity consumption in MKH by branch

Lighting

0%

& others

0%

Public

1%

Bulk Supply

6%

Agriculture

11%

Industrial

32%Commercial

7%

Domestic

43%

Domestic

Commercial

Industrial

Agriculture

Public

Lighting

Bulk Supply

& others

Electricity Consumption by Province and Branch (2005-06)

All nos are in (000)Branch Pakistan Punjab Sindh NWFP Balochistan

1 2 3 4 5 6

Total 70,241 43,618 14,448 8,256 3,919

Domestic 30,720 18,884 5,873 5,562 401

Commercial 4,730 2,953 1,276 411 90

Industrial 22,441 15,599 5,252 1,383 207

Agricultural 7,949 3,668 698 451 3,132

Public lighting 353 170 162 18 3

Bulk supply andOthers

4,048 2,344 1,187 431 86



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Year-wise Electricity Consumption by Province

Year Pakistan Punjab Sindh NWFP Balochistan

1 2 3 4 5 6

1996-97 43,486 25,121 10,062 6,638 1,665

1997-98 45,112 25,638 10,976 6,794 1,704

1998-99 45,756 25,245 12,581 6,243 1,687

1999-00 46,358 27,033 10,975 6,528 1,822

2003-04 59,316 36,246 12,573 7,230 3,267

2004-05 63,298 38,591 13,480 7,645 3,582

2005-06 70,241 43,618 14,448 8,256 3,919

Year-wise Electricity Consumption by Branch

MKH

Year Total Domestic Commercial Industrial Agricultu

re

Public

Lighting

Bu

Sup

& Ot

1 2 3 4 5 6 7 8

1990-91

32,128 10,400 2,066 11,690 5,619 262 2,0

1991-92

34,962 11,458 2,144 12,824 5,848 310 2,3

1992-93

37,180 13,205 1,726 13,658 5,620 287 2,6

1993-94

38,246 14,134 1,786 13,392 5,772 298 2,8

1994-95

40,385 15,583 1,941 13,306 6,252 325 2,9

1995-96

42,479 17,116 2,174 12,885 6,696 378 3,2

1996- 43,486 17,684 2,241 12,754 7,086 390 3,3



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97

1997-98

45,112 18,670 2,334 13,042 6,937 387 3,7

1998-99

45,756 19,268 2,381 12,924 5,620 225 5,3

1999-

00

46,358 21,485 2,544 13,972 4,542 239 3,5

2003-04

59,316 25,394 3,586 19,738 6,669 271 3,6

2004-05

63,298 27,601 4,080 20,561 6,988 306 3,7

2005-06

70,241 30,720 4,730 22,441 7,949 353 4,0

Graph Showing Electricity Consumption by Branch during 2004-2005

FIG.7.3

Domestic

Commercia

l

Industrial

Agriculture

Public

BulkSupply

2004-05

0

5,000

10,000

15,000

20,000

25,000

30,000

2004-05

2004-05


FIG.7.4



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Total

Domestic

Commercial

Industrial

Agriculture

PublicLit.

2005-06

05,000

10,00015,00020,00025,00030,00035,000

2005-06

2005-06


FIG.7.5

Total

Domestic

Commercial

Industrial

Agriculture

Public

1999-00

0

5,00010,000

15,000

20,000

25,000

1999-00

1999-00

The above tables and graphs show some facts of Pakistans power energy data. Now wewill look at the electricity generation graph of Pakistan.

Year Units Generated

MKW

System Losses

Losses



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Units %

1 2 3 4

1996-97

59,894 14,172 24.6

1997-

98

62,915 15,453 25.5

1998-99

65,402 17,179 27.3

1999-00

66,562 17,664 27.6

2003-04

83,607 21,117 25.3

2004-05

88,379 21,603 25.4

2005-06

96,478 22,521 24.3

Graph of System Losses

FIG.7.6

2005-06

Units

Generated81%

System

Losses

19%

Units Generated

System Losses

We can clearly see the difference between consumption of electricity during 2004-2005



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and 2005-2006 and 1999-2000. FIG.7.1 to 7.6 illustrates the story. That how electricityconsumption increases from 46,358 MKW to almost 60,000 MKW. Here is a point tonote that during year 2005-2006 system losses or line losses are about 20% which isalarming. i.e. 20% of energy made by Pakistan is lost in lines during delivery ofelectricity to destinations. In developed countries the line losses percentage is only 3%.

Analysis:

According to The Director General (Energy Management & Conservation) PEPCO.

It was found that half a million ACs mainly of the split version was sold and added to the power system during fiscal 2005-06. Thereafter, another 750,000 pieces of suchequipment was installed in Pakistan during the next financial year. 2005-06.Importers and manufacturers of air conditioners had planned to sell upwards of a millionACs during 2006-06, but due to the on-going power crises they could only purvey750,000 such appliances. A market survey revealed that people wanting to add three ACsduring 2008 would now buy two and spend the rest of the money on procurement of a

generator. The sale figures for the three years viz. 2005-08 add to a phenomenal twomillion pieces or an addition of 4000 MW of load or at least a usage effect equaling 800MW at 20 per cent diversely factor. It was estimated that four million ACs of both thewindow and the split versions (in addition to package and centrally air conditionedbuildings) were added between 2000-08 or a load of 1600 MW (with due diversity) to thesystem. One can safely assume that a large number of such contraptions would be hookedup to the system in addition to the equipment bought during 2000-2008. And if wequantify such use, we safely come up with the figure of about 4000 MW as specificallyAC load on the system. This 4000 MW of AC load simply vanished from the systemdemand after the mercury dropped by 7-8C on late September 5. The system remainedso till September 08 where-after it has slowly built up at a rate of 800-900 MW a day.Energy labelling is unheard of and Pakistan remains a dumping ground for gas guzzlingand inefficient electrical equipment. The present requirement of cooling is being managedby double the required load viz. only 2000 MW. As such, besides being unduly loaded bya non-productive AC load of 4000 MW, the power system has also to arrange forexpensive peaking generation without many returns. Pakistan cannot afford suchextravagant usage of ACs and that all such usages have to necessarily result in greatincrease in utility revenues. We must use ACs most frugally, and these have to be energylabeled with only efficient models allowed to be imported and manufactured locally.



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8. Findings

From above analysis it is found that shortage of electricity in Pakistan is caused by onlyfrequent use of Air Conditioners in by domestic consumers only. As it is evident fromgraphs that domestic consumption of electricity is raised about 30% during 2005-2006.

The other variables of our research such as industrial growth and consumption ofelectricity in industry has almost no impact on shortage. Because industrial growth isonly 7% during 2005-2006 raised from 3.5% from previous year. But Domesticconsumption is increased from 5% per year to 30% which is alarming.

So we accept the first null hypothesis that Massive usage of air conditioners in thecountry is responsible for the electriicty shortage in the country. And we reject all

other hypothesis.



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9. Conclusion & Recommendations

The problem of energy shortage can be solved by imposing more duties onluxurious goods such as Air Conditioners.

Installation of low cost new energy generation plants is very necessary. (Low costplant includes solar energy and wind energy systems theses systems are expensive

at purchasing but after installation these are the free sources of energy).

Line losses should be decreased to 3% currently it is 20%

Line loses in shape of theft of electricity should also be decreased by making newand harder laws.

A strong media campaign should also be introduced on TV. Channels to create



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awareness in the society to decrease energy consumption.

Electricity saver appliances should be introduced in the country.

Home users use less energy so that industrial can benefit from it.

10.References:

World Energy Data: www.eia.doe.gov

Daily Times

Daily News

Contemporary issues in Pakistani Economy by DR. M. Aslam(2005-2006 Edition)

Major issues in Pakistans Economy BY. A.Hamid Shahid(2005-2008 Edition)

Statistical bureau of Pakistan

PEPCO (Pakistan Electric Power Company)

www.worldbank.org

http://www.eia.doe.gov/http://www.eia.doe.gov/http://www.worldbank.org/http://www.worldbank.org/http://www.eia.doe.gov/


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11. Questionnaire:

1.Name and Address of Electric Supply Company:____________________________

_______________________________________________________________________

3.Tele PhoneNos:_________________________________________________________

4.E-Mail:_______________________________________________________________

5.Type of Owner ship: Public___ Private___ (Please tick mark).

Electricity Received from PEPCO:

In Table Format

Electricity Lost In Line Losses: In Table Format



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Electricity Used by Branch (All

available records)

In Table Format

Electricity Shortage by branch wise(All

available records)

In Table Format

No. of users by branch wise(All

available records)

In Table Format

6.Electricity Statistics Table:

--The End



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Husnain Afzal

M.B.A (VU)

Sialkot, Pakistan.

E-mail:[email protected]

Ph: 052-8116425

Cell: 0333-8691306
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

electricity shortage in pakistan in

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