pakistan energy growth

8/12/2019 Pakistan Energy Growth

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Chapter 14

Energy

Energy is the lifeline of an economy and is a vitalinput to sustain industrial, commercial and domesticactivities. Energy disruptions and energy shortagesnot only result in loss of economic growth andemployment but adversely affect social cohesion inthe society. Energy crisis in Pakistan had been

brewing since 2007 and deepened in 2012 whichhugely negatively affected the economic growth andemployment. Absence of effective planning, an

economically and financially viable strategy andincapacitated regulator resulted in supply-demandgap. The situation has been further compounded dueto high transmission and distribution losses,development of black-market for power anddeclining revenue collection. This led to persistentaccumulation of circular debt. Consequently, thefederal budget had to absorb huge quantum ofsubsidies to bridge the financial gaps in power sectorthreatening the fiscal stability on the one hand, andincreasing the public debt.

Nevertheless, realizing the gravity of situation andimportance of energy for economic activities with

particular emphasis on reviving the almost stalledindustrial sector, job creation and incomegeneration, the present government has put this issueon top of its economic reform agenda by pursuing acomprehensive plan to address these problems. Inthis context, government retired the circular debt (Rs480 billion) immediately after taking oath which

added 1752 MW of electricity into the system. Inorder to resolve the issue on permanent basis,government developed National Power Policy(2013) which was announced to provide anaffordable energy in the country through efficientgeneration, transmission and distribution system. Itis expected that the policy will set Pakistan on atrajectory of rapid economic growth and socialdevelopment. More specifically, in order to reduce

the cost of power generation to an affordableamount, a 84 MW New Bong Hydropower Project

being the first hydro IPP in Pakistan/AJ & K hasbeen commissioned while 10.5 MW Gas BasedDavis Energen Project at Jhang started producingelectricity and is contributing to FESCO's Network.Likewise 2 x 660 MW Imported Coal based PowerProject at Port Qasim, Karachi has been inaugurated.

In short, the government has realized the challengesfaced by Pakistan energy system. Thus efforts areunderway to reform existing energy system to

actualize the energy sectors aspirations. It isprojected that by the end of the decade Pakistan willbe transformed from an energy deficient to aregional exporter of power while the efficiencyimprovements in transmission and distribution willdecrease the high cost of power to the end consumerwhich will bring prosperity and social developmentin the country.

Box-1: Salient Features of National Power Policy 2013

The Ministry of Water and Power has developed Power Policy to support the current and future energy needs of thecountry and to set Pakistan on a trajectory of rapid economic growth and social development. It will also address thekey challenges of the power sector in order to provide much needed relief to the citizens of Pakistan. To achieve thelong-term vision of the power sector and overcome its challenges, following nine goals have been set:

i. Build a power generation capacity that can meet Pakistans energy needs in a sustainable manner.ii. Create a culture of energy conservation and responsibility

iii. Ensure the generation of inexpensive and affordable electricity for domestic, commercial, and industrial use byusing indigenous resources such as coal (Thar coal) and hydel.

iv. Minimize pilferage and adulteration in fuel supplyv. Promote world class efficiency in power generation

vi. Create a cutting edge transmission networkvii. Minimize inefficiencies in the distribution system

viii. Minimize financial losses across the systemix. Align the ministries involved in the energy sector and improve the governance of all related federal and provincial

departments as well as regulators


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218

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of 1994. Ththe entire pegulation o

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supplied totrochemical,me of it iso 1985, theonsisted odifficult forfinance theo bring the 1292 M

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220

pressure oterms of eefficient so

14.2.1 Oil

Overtimesources ofis highestrisks andeconomy.energy forincreasingThe priceincreased tan increaseits price in

prices dom

May 2014generatingincreased

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reserves wmillion baroil and 37recoverableon accountcrude oil rMarch FYcorrespond11 percentgrowth of

barrels inmillion bar

(MMCFD)

akistan Eco

domestic rfficiency, orce of prim

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brought neOil is mosPakistan, tontinuouslyf oil was $

$ 110perbof almost h1995. Thisstically, es

from Rs 9one unitanifold i.

n furnace ohrough diectricity inther words,s a subsidyroot causet. Furtheralf of the

. On June 3

ere 1,102.6els(68 perc

1.0 millionreserves. Fof importmained 44.14 comparng period lwhile loca

12 percentJuly-Marchels in corre

(-0.

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Figure14.

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changing py, still reliaposed theative repertly an impe price ofespecially

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er liter in 1at IPP th., Rs.18/-l and Rs.24el, while takistan isevery unitof Rs 9 toof the groore, Pakistariginal dom0, 2013, ori

million bant) cumulatbarrel (32rther a hug

of crude oi million ba

d to 40.9st year pos

l crude extas it stoodFY 14 co

sponding pe

9%) (0.4%)

l Aug

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gas, howevonsidered applies.

attern ince on oil ancountry tocussions oorted sourcwhich hasn last few yl in 1995y 2014 shos as comparn increase is 107 per lit

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s have beemade. Altly yet duesubstitutedce of energ

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original

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ulative propercent)n comparedatural gason cubic fec feet of n

parison of gent year anw:

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(-4.1%

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s, US $ 4.leum crudeponding pent.

sk and cha

troleum crung to explary 21,arded 50

companies ies. The totaq. Kms whady unders are locatyber Pakhtof agreemeities in the

provincets in termshe current fi spudded aough oil isto continuooil in mansupplies.

omestic r

55.6 trillioon cubic feuction andas balancwith domen June 30,

et which reatural gasas productio last year i

) (-4.2%)

Feb

20121

3 billion wcompared t

riod last ye

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de, the Gore domesti

2014 thepetroleumncluding bol area of thch is arounexploration.d in Balucnkhwa andts for thes

country wil

will getof social

scal year, 7nd 18 discefficient pris rise in it ways bein

coverable

n cubic feetet (56 perc24.7 trillio recoverabstic recovera

2012, thesresent thateserve aren during Juls shown in

(-2.3%)

(0.5

Mar April

20131

s spent ono US $ 4.0r posting a

lved due to

ernment oc resources.governmentexploration

th local andse blocks is38 percent

Out of 50istan, 15 in6 in Sindh.blocks, thepick a new

immediateelfares andnumbers overies haveary energy

prices, gasg a cheaper

reserves o

on June 30nt) was the cubic feete reserves.

ble reserves were 56.00.38 trilliondepleted. April forFigure 14.4

)


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Energy 221

The worrisome factor is that our gas reserves aredepleting and if gas consumption grows annuallyeven at moderate rates, the present recoverablereserve will largely be exhausted by 2025. As thislimit approaches the marginal cost of gas supplieswill rise.

To avoid such a situation we have two choices:efficient use of gas and an increase in the gasexploration rate along with diversification of energymix. Realizing this fact, the government is attractingforeign investment to explore new fields. Althoughexploring of natural gas is sub-component of miningand quarrying, yet on a positive note it should benoted that both private and public gross fixed capitalformation in mining and quarrying at basic prices of2005-06 had shown positive growth of 25 percent inFY 14 that earlier had declined to 14 percent in FY13.

Increasing demand of natural gas with its limitedsupply has made room for Liquefied Petroleum Gas(LPG) which is also a primary source of energy.Currently about 1000 tons/day LPG is being

produced domestically contributing less than 1percent to the total energy supply mix. Because ofits characteristics LPG is fast becoming a fuel ofchoice in the areas, where natural gas distributionnetwork is not available. Pakistan PetroleumLimited (PPL) is the pioneer of the natural gasindustry in the country which operates six producingfields in Sui, Kandhkot, Adhi, Mazarani, Chacharand Hala while Oil and Gas Regulatory Authority(OGRA) is empowered to regulate the LPG sectorunder OGRA Ordinance 2002 and LPG (Production& Distribution) Rules 2001 w.e.f 15th March, 2003.OGRA has simplified the procedure for grant ofLPG license and the same is granted on fast track

basis once the requirements are met / compiled.During July-Dec, 2013 two licenses for constructionof LPG storage and filling plants were issued. In

addition, OGRA has also issued 15 licenses forconstruction of LPG auto refueling station. OGRA isplaying a vital role to increase private investment onmidstream and downstream petroleum industry,During July- December, 2013 an investment of Rs.0.264 billion has been made in LPG infrastructurewhereas total investment in the sector till end of thisfiscal year is estimated about Rs. 17.464 billion.

Natural gas and LPG are considered as cheaper thanoil but both are expensive than coal and fortunatelyPakistan has huge coal resources estimated to exceed

185 billion tons which generally ranks from ligniteto sub-bituminous. However, less focus has beengiven to this cheaper primary energy supply.

14.2.3 Coal

The share of coal in energy supply is almost stagnantto 6 percent since 1995. The federal and provisionalgovernments have started giving importance to coalexploration and development activities. The federal

government has been striving hard for optimumdevelopment and utilization of indigenous coalresources and pursuing the policy of promoting coal

based power generation. A summary of the effortsmade in this regard is presented below:-

i. The federal government sponsored discoveryand evaluation of Thar coal deposits,development of infrastructure in this coal-field and studies to determine its mine abilityand for gasification incurring more than Rs2.000 billion.

ii. Lakhra Coal Development Corporation hasbeen set up as a joint venture of PakistanMineral Development Corporation, WAPDAand Government of Sindh to fulfill coalrequirement of 150 MW Khanote PowerPlant.

iii. The Finance Division has sponsored underPSDP a pilot project for Underground CoalGasification at Thar Coal Block- V.

iv. Federal Government is pursuing the policy ofpromoting coal based power generation andconversion of oil and gas-based power plantsto indigenous/imported coal that would lateron, be replaced by Thar coal depending uponits availability.

Government of Sindh has leased out a coal block foran integrated mining project and power generation toincrease the share of coal. The details are as under:-

a) Government of Sindh has entered into a jointventure with M/s Engro Powergen (Pvt)Limited for Coal Mining in Block-II and

established a Company under Companies Act,1984 viz. Sindh Engro Coal MiningCompany for development of Coal Mine andinstallation 600-1000 MW Power Plant.

b) M/s Cougar Energy UK limited has beenallocated Block-III in Thar coalfield forextraction Underground Coal Gasification andestablishing 400 MW Power Plant.

c) M/s Bin Daen Group, UEA has been allocatedBlock-IV in Thar coalfield for developingCoal Mine and installing 1000 MW PowerPlant.


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224 Pakistan Economic Survey 2013-14

the unsustainable level of circular debt there was1752 MW increase in capacity utilization.

To diversify the primary energy supply in thegeneration, Pakistan Atomic Energy Commission(PAEC) produce electricity through nuclear plants.

By this time three nuclear power plants areoperational. The first nuclear power plant i.e.Karachi Nuclear Power Plant (KANUPP) completedits 30 years design life in 2002.

14.2.5 Nuclear Energy

Pakistan Atomic Energy Commission (PAEC) isresponsible for planning, construction and operationof nuclear power plants in the country. PAEC iscurrently operating three nuclear power plantsKarachi Nuclear Power Plant (KANUPP), Chashma

Nuclear Power Plant Unit-1 (C-1) and Unit-2 (C-2).The construction of two more units C-3 and C-4 of340 MW each is in progress. The second and thirdnuclear power plants i.e., (C-1 and C-2) are

performing very well. Performance of all three

operating nuclear power plants is given in thefollowing Table 14.3:

Table 14.2: Electricity generation

S.No Source Capacity addition(MW)

IPPS Fuel Operated Plants1 KAPCO 282

2 HUBCO (RFO) 363

3 HUBCO Narowal(RFO)

204

IPPS Gas Operated Plants

4 Liberty (Gas) 193

5 Saif Power (Gas &HSD)

56

6 Halmore (Gas &HSD)

48

GENCOs

7 Jamshoro (RFO) 388

8 Guddu (Gas) 136

9 Muzaffargarh (RFO) 82

Total 1,752

Source: Ministry of Water and Power

Table 14.3: Performance of the Operating Nuclear Power Plants in Pakistan

Plants Gross Capacity (MW) Grid Connection Data Electricity sent to Grid (million KWh)

July 1, 2014 to

March 31, 2014

Lifetime upto March

31, 2014

KANUPP 100 18-Oct-71 291 13,004

C-1 325 13-Jun-00 1,840 26,781

C-2 330 14-Mar-11 1,866 6,096Source: Pakistan Atomic Energy Commission

The construction of fourth and fifth nuclear plants,Chashma Nuclear Power Plant unit 3 & 4 (C-3 andC-4) at Chashma site, is ahead of the schedule. TheDomes on containment buildings of C-3 and C-4were placed on the 6th March, 2013 and 2ndJanuary, 2014, respectively. Status of underconstruction nuclear power plant is given in thefollowing Table 14.4:

Table 14.4: Status of under construction nuclearpower plant

Plants Gross

Capacity

(MW)

First

Concrete

Pour Date

Target

Commercial

Operation

Date

C-1 340 4-Mar-11 30-Apr-16

C-2 340 18-Dec-11 31-Dec-16

Source: Pakistan Atomic Energy Commission

PAEC is implementing nuclear power program 2030set by Energy Security Plan of the Government of

Pakistan. The ground breaking ceremony of KarachiCoastal Power Project (K-2 and K-3) was held on26th November, 2013. To meet the targets, sites are

being identified for more under power plants.

Technical and engineering infrastructure is in placeto provide technical support to existing underconstruction and future nuclear power plants

One reason of energy crises is expensive input and iftimely efforts are not made for cheaper energy mix,the problem can be more severe in future. Thegovernment is committed to achieve less oildependent power generation mix through

development of indigenous energy resourcesparticularly hydel and coal. Recently, the ExecutiveCommittee of the National Economic Council(ECNEC) approved four development projects in

power sector having a combined generation capacityof 3,511 MW. The approved projects include K-Iand K-II Nuclear Projects situated in Karachi(Province of Sindh; generation capacity 2,200 MW),

Nandipur (Province Punjab; generation capacity 425MW; cost Rs 57,380 million) and Neelum-Jhelumhydroelectric project (AJK; generation capacity 969MW). Government of Pakistan is committed to

arrange timely finances for these projects andmonitor their development regularly in order tocomplete them as per schedule. Also one other


9/14

Energy 225diversification in using energy mix in the generationof electricity is by producing electricity by Co-Generation for which government is seriouslythinking. Co-Generation is a high efficiency energysystem that produces both electricity (andmechanical power) and valuable heat from a single

fuel source. Pakistan being the fifth largestsugarcane producer in the world has the potential togenerate electricity of almost 2,000 MW throughCo-Generation. Bagasse (process waste of sugarindustry) is a fibrous residue of cane stalk obtainedafter crushing. When burned in quantity, bagasse

produces sufficient heat energy to supply all theneeds of a typical sugar mill, with energy to spare.To this end, a secondary use of bagasse is in Co-Generation. Development of Co-Generation plants

based on high pressure boilers is gaining momentumworldwide. Thus Co-Generation by sugar mills by

utilizing bagasse and coal provides one of the mosteconomically viable options for thermal powergeneration, earlier it remained unexploited inPakistan.

14.3.Energy Consumption

Energy consumption is the amount of energy left forfinal use after subtracting energy lost intransformation and distribution from primary energysupplies. It is considered as the oxygen of aneconomy and the lifeline of the economic growth

particularly in the industrialization stage of anemerging economy. The importance of energy

consumption in the economic growth can be realizedfrom the fact that the excessive productivityslowdown around the world in 1970s which was

primarily due to oil crises. Prior to 1970s, economicgrowth and prosperity of a country in the long rundepends on the basic factors of production like labor,

capital and land. Economists mostly link therelationship between these factors of production andeconomic output through the production functions.However, for considerable amount of time,economists did not consider energy as a factor of

production and ignore its importance in theproduction process. Arrows learning by doing andHicks induced innovation did not include resourcesor energy explicitly in their models. However lately,the geological economists have given energy a keyrole in the production process. They placed hugeemphasis on the role of energy and its availability in

the production and growth processes. These modelshave shown that scarcity of energy imposes a stronghindrance in the economic growth of a country.Similarly is the case of Pakistan. In past, Pakistani

policy maker and planners had given less importanceto energy in development plan. During period ofhigher economic growth, failing to implement

proper energy plans for addressing future needs ofthe country resulted in cyclical pattern in theirrelationship. The fluctuation in energy consumptionaffected the large scale manufacturing growth whichin turn affected the real GDP growth as shown infigure below:

During FY 13 energy consumption was 40,185million TOEs compared to 40,026 million TOEs inFY 12 showing a growth of 0.4 percent. The currentfiscal year much improvement has been seen ineconomic activity due to better available energy for

usage on account of relatively less losses intransformation and distribution as compared to lastyear.

Although by source gas has the major share inenergy consumption, however, since 2008 its shareis almost stagnant 43 to 44 percent and due to rise in

prices of oil there is decline in its share in energyconsumption.

-30

-20

-10

0

10

20

30

1995-96

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

%

Years

Fig-14.7: Relationship between growth rate of Real GDP, LSM and Energy Consumption

GDP (fc)

LSM

Energy Consumption

Source: Pakistan Bureau of Statistics, Economic Adviser's Wing, HDIP


10/14

226

14.3.1 Oil (

Transportsector in tHowever, dincrease inshare increof oil in treason is t

Source: Hyd

During Julconsumptiowhile shar0.8 and 0.compared t

During FYwas US $ 1it was 19.

million memillion metMarch FY

Power41.1

Other Go1.6

S

akistan Eco

Petroleum

nd powerhe usage ouring last tthe usageses to 40.0

ransport seat majority

ocarbon Devel

Marchn is increas of transpo6 percentage same duri

13 the im4.9 billion.2 million

ric tons ofric tons of p14, the imp

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

ercenagea

re

Figure14.8

Source: Hydroca

Households0.5

vt.

hare of secto

Oil/P

July-

nomic Surv

roduct)

ectors remaf oil / petro decade tf oil in po

percent intor is almof commer

Figure 14.9:

opment Institu

Y 14, shared by 1.7t and induse point, reng July M

ort bill off to look inetric tons

petroleumetroleum crrt bill of pe

2008

:EnergyCon

rbon Developme

rs in Consu

troleum (%)

arch FY 13

y 2013-14

ined the hioleum prodere is signier sector a013 whilest stagnantial transport

Share of sec

e of Pakistan

of power iercentage ptry decreasepectively,arch FY 13.

petroleumto quantity t

including

roducts ande. Duringtroleum pos

2009

sumptionby

nt Institute of Pa

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ource

istan

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oil and thee usage of otoward Cn agricultuine in activ-March FYoleum prodesponding p

mption of Oi

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ng July-Maon during cgative growort of petrolwas US $pared to Uod last yeatities of bote (5.0 percereason attr

2011

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r

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re is negliil in househG from oil.e and induity due to14, the comuct is littleriod last ye

l / Petroleu

of 1.3 percroducts stoch FY 14rrespondinh of 5.6 peeum crude i.3 billion d$ 4.1 billir. Thereh petroleumnt and 4.3 pbuted to the

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eholds.4

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uly-March FY 1

ible shift tld decline tThe declinestry couldower shortosition ofvariant fr

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ent. The vald at US $compared tperiod lastcent. Howencreased byring July-n during cas positiveproducts aercent respeincrease in

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sumption o

(%)

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ward CNGat show the

in usage oe linked to

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6.2 percentarch FY 14rresponding growth ind petroleutively). The

quantity and

griculture0.2

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11/14

decrease in

prices ofwas globalchange inwhich refl

product.

14.3.2 Nat

Pakistan ishouseholdsmajor endof consumThere wasfertilizer i

performancreason of ato frail fun

confronting

Source: Hydr

14.3.3 Elec

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value of peetroleum princrease inits consumct that petr

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re of sectors

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0

5

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15

1995-96

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Fig-14.1

Source: H

troleum prooducts glob

price of pettion patteroleum crud

consumertilizer and

last two damong itsine in gasch had ner sector. Inction in gaGPL-base

gas crisisFigure

pment Institut

ctricity hasg all sourcelogical advnt change

lical relatielectricity

in Consum(%)

ly-March FY 13

1996-97

1997-98

1998-99

: Relationsh

and elec

IP, PBS and E

duct is declally. Evenoleum crud had beene is an ine

of the gas.industry arcades the pasers is chaconsumptioatively affFY 13, thes supply wafertilizer pl

which caus4.10: Share

of Pakistan

increased ras of energy.ancementin lifestyl

onship betconsumptio

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Ce0.

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tion of Gas

1999-00

2000-01

2001-02

ip between g

ricty consu

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tternged.n incted

maindue

ants,

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ent1

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2002-03

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2004-05

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rowth of GD

ption

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ercent whiod last fiscamitment ofehold, pow

rity basis.stry is decliith gas. Ti

of gas (CNoad manacribed houred declineumption as

onsumption

ies that theigher groh is obvioustandard once technth of GDP

umption of

Power26.1

Transport(CNG)

7.0

Share of s

2005-06

2006-07

2007-08

s

P (fc)

in the ovon the SNd Herculesned the mag July-Mary in gas c

h was 15year. Thisthe governr industryowever, thing as pow

ll FY 13, t) as input iement in/ days forin the sha

shown belo

of Gas

period of hith rate ofs in the sen living orlogical gwill negati

electricity a

ctors in Co

(%)

July-March F

-

2009-10

2010-11

2011-12

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GDP (fc)

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ercent in cmajor upturment to prnd fertilizer usage of gr industry cere was inctransport,

gas sectorupplying Cre of trans:

gher growthelectricityse that growproductionods. Likeely affect t

shown bel

H

sumption of

14

2012-13

2013-14

sumption

227

ction. Fourk, includingw plant and of the gashe share oincreased to

rrespondingwas due tovide gas toindustry onas in powern substitute

rease in theowever duethere wereG that had

port in gas

is followedonsumptionth improves

by utilizingise, lowere growth o

w:

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Fertilizer19.0

Gas


12/14

228

The loweroccurred dgrowth inwill lower t

Prior to usectors exconsumptiohousehold.

percent inindustrial uof load shhome appli

made the sincreased t1993. Inconsumptio10 percentransformatindustrialagriculturealmost 26significant

14.3.4 Coa

Pakistansbituminous.2000. Abothe countryand 56.1decrease o

percent, reshas been shence utilmomentum

Pakistan ha185 billioidentified aThe powersignificanc

akistan Eco

rowth in ele to loss ofonsumptionhe growth o

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are of resid47 percent

case of an decreased

in 2013,ion awayand servicin real GDPpercent inchange in

oal general. Coal cont 39.1 perchas been ut

percent byf 3.46 per

pectively. Awitched ovzation of.

s huge coaltons; in

Thar coalproject at

due to

0

1993

1998

2003

2008

2013

Years

Fig14.1

Source: Hyd

nomic Surv

ectricity corowth mo

of electricif GDP in n

f WAPDAange in

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ntial electri in 2013 frriculture sfrom 15 pthis sho

from agrices sector.declined to

1990s.Howthe consum

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cent and ilmost wholr from furingenious

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importance

%

:Shareinel

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y 2013-14

sumption centum and lty in one pxt period. P

to presenttheir elect

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ption patter

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Alternativ

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t of Pakistes to ensuelopments bid to divue attenti Alternativ in the couard (AED

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ultural I

mercial

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14.13: Sha

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an (GoP) ire energyin the corsify its enen towardse / Renewtry. Altern) has been

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rch FY 13 July-

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ultural

arch FY 14


13/14

Energy 229act as a central agency for development and

promotion of Alternative & Renewable Energy(ARE) technologies in the country and to facilitatethe private sector investment in this sector.

Steps Taken By AEDB to Attract Investment in

the Sector

AEDB has undertaken a number of supportivemeasures in order to promote ARE technologies andto attract private sector investments, which include;

Identification of new corridors for wind and solarenergy projects development. Resourceassessment of these corridors is underway.

National Grid Code for wind power projects hasbeen amended. Grid Integration Plan 2010 -2015for wind power projects has been developed byAEDB to support NTDC.

Local manufacturing of micro wind turbine hasbeen started. Manufacturing for large windturbines is also being encouraged. M/s DESCONhas setup a wind turbine tower manufacturingfacility and has provided towers for the first wind

project in Pakistan. M/s Three GorgesCorporation / CWE (China) has also established atower manufacturing facility which will beupgraded to wind turbine assembling facility infuture.

Issues related to financing of projects have beenresolved and now leading financing agencies likeInternational Finance Corporation (IFC), AsianDevelopment Bank (ADB), Overseas PrivateInvestment Corporation (OPIC), EconomicCooperation Organization (ECO), Trade Banketc. are offering financing to wind power projectsin Pakistan.

14.4.1 Wind

Thirty five wind power IPPs holding LOIs issuedby AEDB are at various stages of projectdevelopment.

Operational (Achieved Commercial OperationsDate) FFC Energy Limited: 49.5 MW wind project,

Jhampir, Distt. Thatta, Sindh Zorlu Enerji (Pvt.) Ltd. 56.4 MW wind

project, Jhampir, Distt. Thatta, Sindh.

Under Construction 50 MW Three Gorges First Wind Farm

Pakistan (Pvt.) Ltd., Jhampir Sindh 50 MW Foundation Wind Power I Ltd.

Khuttikun, Gharo, Sindh 50 MW Foundation Wind Power II (Pvt.)

Ltd., Khuttikun, Gharo, Sindh

Twelve projects with a cumulative capacity of630 MW are expected to achieve Financial Close

by 2014.

NERPA announced a new upfront tariff of UScents 13.5244 per kWh on 24th April 2013 for500 MW wind power projects. The wind powercompanies interested in opting Upfront Tariffwill have to achieve Financial Close of their

project by September 30, 2014.

14.4.2 Solar

In Solar Energy, 24 LOIs for cumulative capacityof approximately 792.99 MW On-Grid Solar PV

power plants have been issued. Four (4)companies have submitted the feasibility studiesof their projects and one feasibility study isapproved by AEDB. Other sponsors are at thestage of preparation of feasibility studies

Solar Village Electrification Program wasinitiated under PMs directive. 3000 Solar HomeSystems have been installed in 49 villages ofdistrict Tharparkar, Sindh. Another 51 villages inSindh and 300 villages in Baluchistan have beenapproved for electrification using solar energyand will be implemented shortly.

AEDB in light of SRO 575(1)12006 issued dutyexemption certificates for a large number of solar

panels / solar modules to private sectorcompanies for installation / generation of almost

64.57MW of energy in the country. These solarpanels / solar modules are deployed all over thecountry.

AEDB issued tax exemption certificate forimport of almost 16715 units of Solar WaterHeaters in the country. These heaters aredeployed all over the country especially inBaluchistan, Gilgit-Baltistan, KhyberPakhtunkhwa and Northern Punjab.

AEDB also issued tax exemption certificate forimport of about 1429 units of Solar Water

Pumping System in the country. These waterpumping systems are installed for communitydrinking and agriculture purpose all overPakistan.

14.4.3 Biomass / Waste-to-energy

Framework for power Co-Generation has beenapproved by ECC for bagasse/biomass based sugarindustry projects. 1500-2000 MW of power isexpected to be generated in next 2-3 years. LOIs has

been issued to following investors / sugar millsunder this framework;

M/s JDW Sugar Mills Unit-II (26 MW), RahimYar Khan, Punjab.


14/14

230 Pakistan Economic Survey 2013-14

M/s JDW Sugar Mills Unit-III, (26 MW),Ghotki, Sindh.

M/s Hamza Sugar Mills Ltd., (15 MW) M/s RYK Sugar Mills Ltd., (19 MW) Rahim

Yar Khan, Punjab. M/s Chiniot Power Plant, (15 MW), Chiniot,

Punjab.

14.4.4 Small / Mini / Micro Hydro

Eight hydro projects have been initiated under theRenewable Energy Development SectorInvestment Program (REDSIP) with the supportof Asian Development Bank (ADB). These

projects are being implemented in KhyberPakhtunkhwa and Punjab with an estimated costof US $ 290 Million.

Another 02 small hydro power projects have beeninitiated under REDSIP. PC-I for these projectshave been approved. Loan approval from ADB isawaited.

The Government of Punjab issued LOIs toprivate investors for establishment of 10 smallhydro projects with a cumulative capacity of 142MW at different location in Punjab.

AEDB is building capacities for private sectorinvestment in Khyber Pakhtunkhwa (22 projectsof cumulative 92 MW capacity throughPakhtunkhwa Hydel Development Organization

(PHYDO) and Punjab (30 projects of cumulative240 MW capacity through Energy Department /Punjab Power Development Board (PPDB).

AEDB initiated a program with the assistance ofGIZ support to assist the provinces solicit privateinvestments in small hydro sector; under this

program Pre-Feasibility Studies for 25 hydrosites in AJK, Sindh, Punjab and KhyberPakhtunkhwa with the cumulative capacity of284.14 MW have been completed.

Public sector Hydro power projects initiated in: Khyber Pakhtunkhwa (worth U$ 150.99

Million, of 17.0MW, 36.6MW and 2.6 MW) Punjab (worth U$ 138.74 Million, of

5.38MW, 4.04MW, 2.82MW, 4.16MW and7.64MW)

Gilgit-Baltistan(worth U$ 71.12 Million, of26MW and 4MW).

14.4.5 Clean Development Mechanism (CDM)

CDM is one of the instruments that developers of theAlternative and Renewable Energy (ARE) Projects

pursue and earn financial returns by getting theirprojects registered with CDM Executive Board andselling the accrued Certified Emission Reduction(CER) certificates in the international carbonmarket.

Way Forward

Realizing the criticality of energy for economicgrowth, it is the main focus of Pakistan Vision 2025.The vision aims at ensuring uninterrupted access toaffordable and clean energy for all sections of the

population and aimed at resolving structural changeswithin the energy sector are fundamental to futureeconomic prospects. The main elements of thisvision include:1. Optimize energy supply mixeconomic,

scalable, indigenous by 2025

2. Reduce cost per unit3. Reduce supply gap by 2018 and exceed demandgap by 2025

4. Create and encourage culture of conservationand efficiency in the usage of energy

Nonetheless, these projects have long digestionperiod and would come in to system in few years. Itis also highlighted that through efficient reallocationof natural gas based on economic sense is essentialto get best value for money.

pakistan energy growth

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