Tuesday, May 24, 2016

Pakistan’s Electricity Nightmare: Pitfall of Wrong Investment Priorities?


 
Energy and more particularly electricity have been the main driver of economic growth of any society. Unfortunately Pakistan’s per capita electricity consumption is quite low as compared to developed or even developing economies. In 2013 Pakistan’s per capita electricity consumption was 451 kWh, which is 28 times less than consumers of the USA (19.3 times less than consumers of Singapore, 9.6 times less than consumers of Malaysia, and 7.7 times less than the consumers of China). In other words, the major constraint for Pakistan's sustainable economic development is inadequate power generation – that leads to mass load shedding – hampering industrial, manufacturing and agricultural productivity.
Pakistan's electricity shortage is growing day by day despite various government claims to eliminate load shedding– it is in fact getting worse day by day. According to a report electricity shortages exceeded 7,000 megawatts in 2011; the gas shortfall is 2 billion cubic feet per day. This shortfall is the result of the failure, over successive governments’ tenures, to invest enough to expand power system capacity. For example, some cities and rural areas only receive electricity for few hours out of 24 hours. This not only causes economic hardship (energy shortages are estimated to cost around 2 percent of GDP annually), but also results in unemployment, social and psychological problems.



It is not only electricity issue generally people at large do not have basic necessities of life – clean drinking water, sewage, education and health. The press is full of stories of massive dying of children’s in Thar due to inadequate clean drinking water, health facilities and shortage of food due to drought (Pakistan ranks at number 80 among 122 nations in the index of provision of hygienic drinking water – which means 44% of Pakistani people have no access to clean, usable water resources),  Even in major urban cities people are struggling with the basics of life. For example, metropolitan city Karachi is short of water, sewage and inadequate garbage disposal system.   



No doubt, the current government has taken a number of initiatives to overcome electricity shortages, however, so far nothing is accomplished as load sheading is getting worse day by day. Instead of prioritizing allocation of its meager resources to address short-term power crisis, improving health, education, clean drinking water, sewage - the government allocated its resources for the development of state-of-the-art transportation system – metro buses and metro trains!

The government has failed to recognize its right investment priorities that could have trigger the economic activity – investment in power generation. The government massive investments strategy in metro trains and buses will help the commuters reduce travelling time; help in winning 2018 elections. I am afraid; such investment will not add economic growth nor help in eliminating the curse of load shedding or help in addressing other basic socio-economic issues in near future. Well commuters will no doubt enjoy state-of-the-art metro trains, buses and will reach to their destinations in most efficient and hassle free ride. But the question is whether reaching to their destination will add to the economic activity, especially under the curse of load shedding – significant productive time lost while waiting for electricity?

Let us go to the people of Pakistan and ask their preferences. Are you willing to have orange train/metro buses? Certainly 100% of the people will say yes and why not, everyone would love to travel hassle and congestion free ride. It would cut travelling time as well as improve efficiency and of course we should be proud of latest state of the art transport system in the country.  Now if we ask whether they prefer to have un-interrupted electricity or metro trains/buses. In this case opinion would definitely biased towards availability of electricity first. The reason is that people at large has suffered a lot physically, mentally and also costing country in terms of productivity lost (industrial and agricultural) and increase in unemployment.     

Any Short-Term Solution

We are aware the most cost effective hydro power will take decades, nuclear power plants also take 5-6 years while oil/gas based may take shorter period. Wind and solar energy is yet another efficient renewable source of energy and quite rapidly growing around the world. For example, presently 105 countries are benefiting with wind power. At the end of 2015 cumulative global wind power generation capacity increased close to 432.42 gigawatts (GW), up from 4.8 GW in 1995. During 2015, 63 GW of additional capacity was added, which correspond to about 60 nuclear reactors (Global Wind Energy Council). As a result, for the first time wind energy capacity of 432 GW surpasses the dominance of nuclear energy 382.55 GW in January 2016 (the London-based World Nuclear Association). Both wind & solar power and nuclear energy are being touted as alternatives to fossil fuel power as they produce fewer greenhouse gases. Wind energy however has captured renewed interest as technological innovation has considerably lowered its generation costs while nuclear power continues to suffer a backlash following the 2011 Fukushima meltdowns. Therefore, wind power and other renewable sources of energy will provide a transition passage from fossil fuels to renewable. 

China hold’s 33% of global wind power capacity of 432 GW in 2015. It added 30.5 GW out of total of 63 GW in 2015. In Pakistan the era of wind power started in the year 2011 with a capacity of 6 MW.  Since then, Pakistan added 50 MW in 2012, 50 in 2013, 150 MW in 2014 and nothing in 2015. At the end of 2015, Pakistan total wind energy capacity was stood at 256 MW.  In contrast, India turned out to be the world fourth largest wind energy producer accounting for 5.8% of global capacity of 432.42 GW.  Looking at the wind capacity addition in 2015 by China 30.5 GW and India 2.6 GW the question is can Pakistan able to utilize its few percentage of metro train/buses resources to attract appropriate Chinese technology/investments in enhancing wind energy/solar capacity of 2-3 GW in 2016? This definitely would have added 1-2% of additional economic growth? Investment in orange train and metro buses is too early to be made when country is not having the basic ingredients of take off – electricity, education, clean drinking water, sewage and health. Therefore, one could have waited for these investments until economy prospered and stood on its feet.  Unless or until we sincerely priorities our efforts and resources in enhancing the power generation our people and economy will continue to live in agony and nightmare of darkness. 

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