Challenge of power crisis in Pakistan


ARTICLE (July 20 2008): Electricity consumers all over the country are enduring long hours of loadshedding – 6 to 12 hours on a daily basis – in the wake of prevalent power crisis that has crippled civic life as well as industry, trade and commerce. According to the reports, power deficit in the national network during April 2008 was 3,700 MW per day that widened to 3,730 MW in May.The supply-demand gap was projected to reduce to 3,335 MW during the current month of June, on the basis that Malakand III hydropower project of 81 MW and two rental power projects of total 225 MW would go into commercial operations by May/June. These milestones however could not be achieved. Malakand III power station located in the NWFP, which was commissioned in January this year, has run into snags and is delayed for starting commercial operations.

Likewise, rental power projects being arranged by Pakistan Electric Power Company (PEPCO) that are in the pipeline, have been delayed. The month of June therefore witnessed even longer-duration loadshedding compared to past months, in spite of achieving increased hydropower generation.

Not only there are any signs of improvement in the situation in coming months; the worse loadshedding has yet to come. Expecting that Malakand III and all rental power projects of cumulative capacity of 475 MW as planned come on stream during the next three months, the consumers will still continue to suffer miserably in the months of August and September. Power deficit during the period will be around 4,000 MW.

Against a demand of 17,200 MW there would be firm electric supply of 13,270 MW in August, resulting in a shortfall of 3,930 MW. Likewise, power supply-demand gap in September will be 3,910 MW, when demand and supply are projected at 17,000 MW and 13,090 MW, respectively. Conserving electricity to the optimum level of 1,000 MW, as a result of emergency measures adopted recently, has been taken into account, though achieving the desired results is doubtful.

On the other hand, the government has devised a three-month action plan for the summer season, and claims that an additional cumulative 1,000 MW to 1,500 MW power would be generated. Implementation of the plan, if pursued earnestly, could reduce the present daily loadshedding by one to two hours.

This, however, will be possible mainly as a result of restoration of available capacity of power generation fully by the Independent Power Producers (IPPs) that remained under-utilized till now because of financial constraints and lack of required fuel storage reserves.

Given the conditions of furnace oil supply, power plants’ outages and poor transmission and distribution facilities, the additional power supply to the consumers, in effect, may not come to the projected level.

Again, it may not be possible to end loadshedding in the country by the target date of August 14, 2009, as promised by the government, or by December 2009 for that matter. It is envisaged that 2,200 MW would be added to the system by end April next year and, subsequently, a total of 6,000 MW by end December. This is too tall a claim.

It will simply not be practical to create an additional power generation capacity up to over 40% of present installed capacity of WAPDA/PEPCO system within 1-1/2 years’ time, given the limitations of financial, physical and human resources. Even if all the planned projects, in public and private sectors, are implemented timely, the commissioning dates of power plants could slip for a number of reasons and factors. This is so particularly when creation of most of additional power generation capacity would be in the control of private sector and not the government itself. Many of the on-going IPP projects are already facing delays owing to various bottlenecks.

The existing availability of power in the WAPDA/PEPCO system in December 2009 will be 10,300 MW, whereas demand is projected at 16,200 MW. This results in power deficit of 5,900 MW. To meet this shortfall, it is planned to add to the existing system 1,200 MW from PEPCO thermal power units, 1,270 MW through the IPPs, 1,200 MW from the rental power facilities (PEPCO) and another 150 MW from hydropower (WAPDA).

The total capacity addition thus works out to be 3,820 MW and total available power of 14,120 MW during the period. Still, there will be a shortfall of over 2,000 MW, resulting in countrywide loadshedding to continue until December next year and beyond.

All these projections exclude the KESC system, to which PEPCO plans to continue to provide 700 MW electricity on regular basis. It therefore may be added that demand forecast at national level during 2008-09 and 2009-10 is projected in the range of 17,868 MW and 19,352 MW, respectively.

Nonetheless, another plan to develop fast track rental power projects in the private sector has been launched by the Private Power and Infrastructure Board (PPIB). The projects, each of about 200 MW capacity, will create an additional cumulative power generation capacity of 1,200 MW. These projects, including barge-mounted units, will also cater to the KESC system.

Inadequate power generation capacity is just one of the factors affecting power supply. Others are lack of capacity for transmission and distribution, mismanagement and inefficiency of the systems and a host of institutional problems.

Frequent power breakdowns, besides the scheduled loadshedding, are indicative of the poor state of affairs. Power sector, therefore, needs to upgrade and improve its transmission and distribution capacity throughout the country. In fact, there has been no substantial revamping and expansion of the system after 1980s.

PEPCO is currently implementing the Power Transmission Enhancement Investment Programme, at a total cost of $800 million, aiming at rehabilitation and expansion of 220 and 500 kV transmission systems. The Asian Development Bank (ADB) is financing the project.

Only last month the second phase of Power Transmission Enhancement Investment Programme has been launched, which will cost $220 million. Procurement of main materials for 220 kV transmission line is in hand. Further, the government has already requested the ADB for another $200 million loan for implementation of the third phase of the programme.

Also, the World Bank has agreed to partially finance another project titled the Electricity Distribution and Transmission Improvement Project, which is in the pipeline, costing about $310 million. These projects will require at least three years to complete.

Decision-making at PEPCO is lengthy and time-consuming, to put it mildly, that need to be essentially improved. This becomes more important at this stage since PEPCO has to make arrangements for fuel supply and dispersal of power for the planned rental power projects.

These arrangements have to be done in parallel to processing for acquisition of rental power facility and PEPCO has to gear up for the same. The past government had coined the idea of distributing ten million energy saver bulbs (self blasted compact fluorescent lamps) among consumers free of cost for replacing the installed 60/100 W incandescent bulbs and tube-lights. Energy saving through this measure alone has been envisaged to the level of 400 MW.

These ten million energy saver bulbs have not yet been purchased even after a lapse of more than four months. Tender for energy savers, which was issued as a gallop tender, has been extended twice, now till end July, 2008. Similarly, international tender, advertised on 1st April, for 200-MW rental power plant for Faisalabad – a fast-track project – has been extended twice by PEPCO, whereas tenders for the remaining rental power plants are yet to be issued.

It may be concluded that, in essence, overcoming power shortage is not likely seen in the near future. Only time will tell whether the government’s plans to declare year 2009 as loadshedding-free year were realistic to achieve or not.

But one thing is sure; electricity will no more be affordable to the consumers. PEPCO has to pay an amount of Rs 13 billion in excess to normal purchase while buying electricity from three rental power plants of 386 MW cumulative capacity for a period of 3 years.

(The writer is director of Nespak Board, a company of the ministry of water and power, government of Pakistan



Source: Business Recorder, 20/7/2008


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