Asian Development Bank’s Energy Outlook 2013

Pakistan needs to enhance reliance on imports

With continued energy demand growth in Pakistan, it will be increasingly difficult to meet the demand with domestic sources and Islamabad will have to increasingly rely on imported energy sources, the Asian Development Bank’s Energy Outlook 2013 revealed on Monday.

In the business as usual (BAU) case, the primary energy demand for Pakistan is projected to increase from 84.6 million tons in 2010 to 145.8 million tons in 2035, growing at an annual rate of 2.2 percent, it showed. With this growth, Pakistan’s per capita energy demand will reach 0.59 tons per person as compared to that of 0.49tons in 2010.

Meanwhile, with the deployment of advanced technologies, around 10.3 percent of the primary energy demand (or 15 Mtoe) could be saved by 2035 in the alternative case, according to the outlook.

Diversification of the energy supply source away from natural gas and imported fuel oil, in addition to securing necessary financial sources and an enabling environment for building energy supply infrastructure, will be the important elements for energy security of Pakistan.

Pakistan has proceeded with the demand side energy efficiency improvements and consistently implements policy and measures for energy efficiency improvement across the sectors.

According to the report, despite economic rebound, the energy shortages have been constraining economic growth. Pakistan is faced with domestic energy supply shortages of coal, oil and natural gas, as well as a shortage of hydro generation capacities. These fuel constraints have severely affected the power sector, resulting in a significant decline in the power production — some generators were unable to operate at their installed capacity.

At its peak, the gap between electricity demand and supply was as high as 40 percent (ie, 40 percent of the demand could not be met).

 

Securing energy supply sources of natural gas, oil, hydro, and coal will be critical for Pakistan’s economic growth. Currently, Pakistan is self-sufficient in natural gas — the main energy source to meet its primary energy demand — while domestic production will decline from the current 38.4 billion cubic metres (bcm) to 13bcm in 2035 and Pakistan will have to start importing natural gas sometime after 2015.

Some projects are now being planned, such as for liquefied natural gas (LNG) imports from Qatar and pipeline imports from Iran or from Turkmenistan through Afghanistan. Oil import dependency may rise to nearly 90 percent by 2035, if domestic oil production is maintained at a constant level. In contrast, coal import dependency will decline to 20 percent in 2035 from 67 percent in 2010. Coal production is projected to increase from the current 1.4Mtoe to 9.7Mtoe by 2035, with the expanded production from the Thar coalfield.

Additionally, Pakistan is endowed with potential new and renewable sources such as wind, solar and biomass and their contributions will be important, as well, to diversify the energy sources, the outlook showed.

Nevertheless, the prospects of their making inroads into the energy market in Pakistan are small in the BAU case because the policies and measures are not in place to incentivise the private sector.

Pakistan has substantial energy savings potential with the deployment of advanced technologies for the energy savings. In the alternative case, Pakistan’s primary energy demand will increase at an annual rate of 1.8 percent through 2035.

The power sector represents the biggest energy savings potential at 6.5Mtoe in 2035, followed by residential and commercial at 4.8Mtoe, industry at 2.2Mtoe and transport at 1.5Mtoe.

In the alternative case, Pakistan’s electricity generation in 2035 will be around 16 percent lower at 192 terrawatt per hour (TWh) in 2035 as compared to that of the BAU case at 230TWh. Substantial savings in total generation in 2035 will result from electricity demand savings in the industry, residential and commercial sectors.

Despite lower electricity generation requirements, it will be almost twice the 2010 level, it concluded.

The News report by Mehtab Haider

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