Saturday, 8 October 2011

Rich in oil?

The ministry of water and power has claimed that there will be no load shedding from now on as the demand is 13000 MW and supply is more or less the same. The reason for terrible load shedding in the past week was the suspended supply of oil from Pakistan State Oil (PSO) to power generation companies which owe PSO Rs 150 billion. The power generation companies were, in turn, waiting for payment of Rs 120 billion from PEPCO.

Sources said that Rs 8.5 billion were paid to the PSO and independent power production companies by PEPCO. It took a week of unrest in all the cities of Pakistan, with violent protestors destroying public and private properties to vent their anger against the load shedding, for the Government of Pakistan to pay heed to the situation.

Now the protest against the load shedding will definitely stop as it has happened before and no one will care if the real problem is dealt with. The circular debt will keep rising because we are consuming more than we are producing. The Government will absolve their guilt after providing temporary solution to the problem in spite of finding more reliable and cheaper energy resources.

Pakistan needs 32,000 metric tons of furnace oil daily to produce sufficient energy. The figure shows the incompetence of the energy planners in Pakistan. Even oil rich gulf states do not consume this much oil for the production of electricity. The energy planning commission of Pakistan has turned deaf ear to the clamor of energy pundits of the world that the world is running out of oil and we need to shift to renewable energy resources to meet our demands. This is the reason that our circular debt rises by one billion with each passing day.

Pakistan has three major power sources- oil, natural gas and hydro. Each contributes around 32% while coal and renewable energy produces about 2% energy combined. Most countries have adopted cheap coal based power resources to produce 40-50% power while expensive oil for power production is reduced to less than 5% while Pakistan continues to use expensive oil for one-third power production.

What hurts the most is that Pakistan is suffering from blackouts, shortages, public unrest, lag in economic and industrial sector due to power outage while we are sitting on the top of one of the largest coal reserves in the world. Pakistan can produce 100,000 MW electricity for the next 100 years and only 25% of the coal reserves will be consumed if coal is included as major power source, where the current demand according to the Government is 13,000 MW and it can go up to 20,000 MW in extreme summer.

Coal is available in abundance in Sindh and Balochistan and provinces have the autonomy to set up power plants on their own but the problem lies in the incompetent administration and lack of interest from the government. It takes only 3 years to set up a plant up and running powered by coal. Government should give incentives to the investors and even if foreign assistance is acquired, the projects will be profitable and public will still get cheaper electricity.

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