Vision 2030

Is power generation target achievable?

By M. Osman Ghani

With the present population growth rate of over 1.5 per cent per annum, Pakistan is projected to become the fifth largest country by 2030, with a population of 230-260 million. By 2030, 60 per cent of her population will live in the sprawling metropolitan cities and rapidly proliferating district and sub-divisional towns converting a biggest chunk of the fertile lands into residential areas. Vision 2030, prepared by the Planning Commission gives a clear picture of important economic and social developments and expected challenges that the nation will confront. The challenges pertain to achieving high and stable GDP growth of 7-8 per cent, educating its youths and creating adequate employment opportunities by vigorous industrialisation and modernisation of agricultural productivity.

Projected rapid growth of Pakistan’s economy by 7-8 per cent, calls for availability of sufficient water and energy in the country. Vision 2030 envisages increasing Pakistan’s GDP from about $145 billion at present to $1000 billion by 2030. Similarly, per capita income is expected to quadruple to about $4000 in 2030. Vision 2030 projects to increase the share of manufacturing from 18 per cent of GDP to 30 per cent of GDP and share of high-tech to total manufacturing value addition from 1 to 30 per cent.  It also projects to increase trade to GDP from 35 per cent to 60 per cent, while maintaining appropriate balance of exports and imports. It aims to ensure employment opportunities for working population, both men and women.

Vision 2030 wants to create Pakistan an important international business hub and transit trade centre in the region. To achieve these lofty goals, adequate energy supply and skilled manpower must be ensured. Pakistan’s appetite for energy is a manifestation of its growing economic growth and improving standard of living. Demands for various sources of energy by the expanding industrial, commercial and transport sectors and domestic consumer will rapidly increase. Hence various options in the energy sector need to be optimally explored and utilised.

Of all the vital ingredients of capital, supply of adequate energy will be the most important part to achieve socio-economic goals of Vision 2030. Vision 2030 projects total power generation to increase at 162590 MW from its present level of about 20,000 MW. This huge power supply is targeted to be obtained from various sources including 8800 MW from nuclear, 32660 MW from hydel, 19910 MW from coal, 9700 MW from renewable, 7760 MW from oil and 83760 MW from gas.  The projected power generation target envisaged by Vision 2030 is very high and ambitious if compared to historic growth of power generation in Pakistan. During 60 years of her existence, Pakistan was able to create a generation capacity of only 20000 MW. But in the next 23 years she plans to add a huge figure of 143000 MW. Although it is not impossible to achieve this target, however, in the light of present trend of investment and growth in the power sector, the target appears to be a dream right now. Various potential sources of power are discussed below:-

Nuclear:

Pakistan’s existing nuclear power potential is just about 462 MW. Vision 2030 projects to achieve a nuclear power generation of 8800 MW or a net increase of 8338 MW in just 23 years. At present two nuclear power plants are in operation while a third plant is under construction which is expected to be commissioned in 2011. To achieve 8800 MW target by 2030 Pakistan Atomic Energy Commission (PAEC) has restructured its power sector to assume greater technical responsibility in the construction of future nuclear power plants by enhancing indigenization in nuclear power program. Once expertise is achieved and adequate fund is made available the target of 8800 MW nuclear power would not be impossible to realise.

Hydel:

Vision 2030 projects to increase hydel power potential from the existing capacity of 6460 MW to 32660 MW. Various studies about hydro power potential indicate that Pakistan can reasonably produce 42000 to 45000 MW of power from this source. However, during the past 40 years or so no major hydro power project could be completed other than Ghazi Barotha. Despite all preliminary spade works and feasibility studies a major dam cum hydro power project like Kalabagh Dam could not be brought out of the hook, due to lack of consensus and disagreement. Similar issues are more or less associated with other major dams in the northern areas. Colossal cost and lack of indigenous expertise are other problems faced by WAPDA. WAPDA has undertaken feasibility studies/ construction work for a number of hydro/thermal power projects under the Vision 2025 Programme. Work on Allai Khawr (21 MW), Khan Khawar (72 MW) and Dubair Khawar (130 MW) hydropower projects is in full swing. Implementation of Neelum-Jhelum (969 MW) hydropower project will commence shortly. Feasibility studies of a number of the hydropower projects are also underway including Bunji (5400 MW) AND Kohala (600 MW). After the completion of the planned projects the installed capacity is expected to increase to 42000 MW.

Coal:

Fortunately, Pakistan has the second largest coal reserves of 185 billion tons out of which 175 billion tons are located in Thar district alone. Vision 2030 projects coal powered electricity production by 19910 MW from its present share of about 200 MW. Due to high cost of imported energy government has decided to enhance the share of coal in the over all energy mix from 5 per cent to 19 per cent by 2030. Energy Security Action Plan has set a target of generating 20,000 MW power from coal by 2030. To ascertain commercial viability of mining coal from Thar, German consultant M/s Rheinbraun Engineering has completed a mining feasibility on a specific block in Thar coalfield. The same block has been assigned to an international firm for commissioning of integrated coal mining and 1000 MW power generation project. If the country wants to utilize fully her coal potential all out effort would be required without loss of time. Help and cooperation from countries like China, USA, UK and private sector’s participation will help Pakistan to utilize her coal power potential.

Oil and gas: 

Electricity from oil and gas sources is estimated to increase from about 12500 MW at present to 91520 MW in 2030 – a net increase of 79220 MW in just 23 years. This is a most challenging task to accomplish especially when the existing gas reserves of Pakistan is rapidly depleting and international oil price is continuously increasing.  Presently Pakistan produces about 55-60,000 barrels of oil per day against national consumption of over 350,000 barrels per day. Pakistan must accelerate her oil and gas exploration activities to reduce dependence on imported fuel. Moreover, to supplement her increasing gas demand three proposed pipelines from Iran, Qatar and Turkimistan need to be undertaken as early as possible. In the coming years, the nationwide demand for gas would rise to 500 to 600 mmcfd and the shortage would be around 300 to 400 mmcf per day. The shortage is expected to take a serious turn in the next five to ten years. 

At present, Pakistan meets over 70 per cent of its energy needs from domestic resources. The energy pie of Pakistan shows that around 50 per cent of the need is met by the indigenous gas production, 20 per cent by domestic and imported oil and 11 per cent by hydro electricity.

Coal and nuclear contribution to the energy mix is at 7.6 per cent and 1.2 per cent respectively. At the present projected growth rate, both the demand and shortfall is expected to double in the next 10 years. While the widening of energy supply and demand gap remains a challenge for Pakistan, it also provides real time opportunities for both local and international investors.     

According to some estimate Pakistan is endowed with 27 billion barrels of potential oil reserves and 282 trillion cubic feet of gas. Out of these some 3 per cent of estimated oil and 15 per cent of the estimated natural gas potential resources have so far been discovered from about 620 exploratory wells drilled over the past 40 years. The cumulative oil and gas exploratory effort in Pakistan so far has been very small, 0.75 wells against the world average of 10 wells per 1000 km. Exploration of the entire potential of oil and gas reserves will required billions of dollars investment and huge expertise which can only be materialize with appropriate domestic and foreign in investment especially by the private sector.

Renewable energy:

Pakistan has huge reservoir of renewable sources of energy including biomass, wind energy, solar energy and ocean tidal power in the vast coastal areas of Sindh and Balochistan. During the fiscal year 2005-06, the Government of Pakistan initiated several new projects on renewable energy. Alternative Energy Development Board (AEDB) envisaged a dynamic programme to promote, implement and execute alternative renewable energy technologies in Pakistan. The Government approved a number of recommendations under the Energy Security Action Plan in 2005-06 including development of wind and solar energy to ensure that at least 5 per cent of total power generation capacity is met through these resources by 2030.  As per experts, wind power could be the cheapest source of electricity in the coastal areas of the country especially in the Gharo corridor of Sindh. With proper strategy and investment Pakistan can achieve the target of 9700 MW wind power by 2030 with active participation of the private sector.

One major hurdle in the implementation of Vision 2030 power projection will be the availability of funds. Regarding financing energy program Vision 2030 writes: “While future projections for Pakistan’s energy needs may appear reasonable, their financing will require extensive investments from the private sector. Pakistan has initiated much needed reforms in this direction and has unbundled generation from distribution, with Independent Power Producers (IPPs) and Power Purchase Agreements (PPAs) becoming the norm.

However, the outcomes have not been wholly positive, and power blackouts (load-shedding), inefficient management, and distortions in the tariff structure continue to plague the system. Privatization of KESC’s generator and distributor has not been accompanied with improvements in manning efficiencies or reduced T&D losses. Industry is still charged higher than the domestic consumer or the agricultural sector.

How then can energy generation be financed”? The answer of this question and of many other related questions will have to be found out for achieving power generation target set by Vision 2030.

POWER GENERATION UNDER VISION 2030

(Megawatt)

Year          Nuclear         Hydel          Coal          Renewable    Oil          Gas          Total

Existing (2005) 400          6460          160          180          6400          5940          19540

Additional 2010-2030          8400          26200          19750          9520          1360          77820          143050

Total   8800          32660          19910          9700          7760          83760          162590