Energy Crisis in Pakistan

1. Introduction :

Energy is considered to be life line of any economy and most vital instrument of socioeconomic development of a country. Energy is pivotal in running machinery in factories and industrial units, for lighting our cities and powering our vehicles etc.

There has been an enormous increase in the demand of energy as a result of industrial development and population growth, in comparison to enhancement in energy production. Supply of energy is, therefore, far less than the actual demand, resultantly crisis has emerged. An energy crisis can be defined as any great bottleneck (or price rise) in the supply of energy resources to an economy.

2. Pakistan’s Energy Sector:

Pakistan’s energy infrastructure is not well developed, rather it is considered to be underdeveloped and poorly managed. Currently the country is facing severe energy crisis. Despite of strong economic growth and rising energy demand during past decade, no serious efforts have been made to install new capacity of generation. Moreover, rapid demand growth, transmission losses due to outdated infrastructure, power theft, and seasonal reductions in the availability of hydropower have worsened the situation. Consequently, the demand exceeds supply and hence load-shedding is a common phenomenon through power shutdown.

2.1 Energy Supply :

During 2009-10, Energy supply and per capita availability of energy witnessed a decline of 0.64 % and 3.09 % respectively in comparison to previous year.

Pakistan needs around 15,000 to 20000 MW electricity per day, however, currently it is able to produce about 11,500 MW per day hence there is a shortfall of about 4000 to 9000 MW per day. This shortage is badly hampering the economic growth of the country.

2.2 Energy Consumption :

Pakistan’s energy consumption is met by mix of gas, oil, electricity, coal and LPG sources with different level of shares. Share of gas consumption stood at 43.7 %, followed by oil 29.0 percent, electricity 15.3 percent, coal 10.4 percent and LPG 1.5 percent.

3. Sources of Energy in Pakistan:

3.1 Non-renewable resources (Fossil fuels): [Limited – Expensive]

Non renewable resources are primarily fossil fuels emanating from remains/decomposition of animals and plants deposited deep into the earth crust and converted into oil and gas. These resources cannot be replenished. There are three main types of fossil fuels: coal, petroleum, natural gas and liquefied petroleum gas (LPG).

    a). Petroleum products:

In 2009-10, consumption of petroleum products was 29% of total share of energy. Majority of crude oil is imported from gulf countries to meet the demand. Power, industry and transport sectors consume higher quantity of petroleum followed by agriculture and house holds. Petroleum is also used in generation of electricity, which counts 64 percent of total electricity generation (34 coming from hydro generation). Balance recoverable reserves of crude oil in country have been estimated at 303.63 million barrels and we are extracting approximately 24 million crude oil annually, meaning if we do not explore new wells, we will exhaust our current crude oil reserves in 12-13 years.

    b). Natural Gas: 

Importance of natural gas is increasing rapidly. Average production of natural gas is 4,048.76 million cubic feet per day as against 3,986.53 million during corresponding last year, showing an increase of 1.56 percent. Natural gas is used in general industry to prepare consumer items, to produce cement, for manufacturing fertilizers and to generate electricity. In form of CNG, it is used in transport sector. Share of natural gas in energy consumption is 43.7 percent. Due to price differential between CNG and Petrol, vehicles are using converted to CNG and approximately 2.0 million vehicles are using CNG and currently Pakistan is the largest CNG user country in the world. Liquefied petroleum gas (LPG) contributes around 0.7 percent to total energy supply in country and is being imported to stop deforestation in hilly areas.

    c). Coal: 

Pakistan has coal reserves estimated at over 185 billion tonnes, including 175 billion tonnes identified at Thar coalfields. Coal is primarily being used in brick kiln and cement industries and approximately 67 percent coal is imported because indigenous coal is not considered of good quality.

Guddu plant is largest plant thermal operated plant with a capacity of 1,650 MW, while two largest Independent Power Plants (IPPs) in Pakistan are Kot Addu (1,600 MW) and Hubb River (1,300 MW).

Causes of Energy Crisis : 

Pakistan’s energy crisis traces its roots to following distinct causes :

 Growing Energy Demand

; over the years there is greater need of energy because of;

    • increase in population,

    • enhancement in lifestyle

    • industrial and agricultural growth

    • greater transportation needs

 Lack of proactive and integrated planning for production of energy:

Pakistan has had wider potentials to tap energy, however, due to lack of any integrated/proactive planning, very less number of power producing plant were installed to meet futuristic demands. Resultantly, over the years, the gap between energy demand and supply drastically grew and now against demand of 20000 MW, we are having around 11500 MW.

Imbalanced energy energy mix

Energy mix in Pakistan is quite imbalance in comparison to other countries, with greater reliance on non-renewable resources of gas (43.7 %) and oil (29 % - majority of which is imported). Prices of petroleum products/crude oil fluctuate and in current Afro-Arab political crisis, the oil prices are likely to increase manifold affecting oil prices in Pakistan.