pakistan energy sector

ENERGY SECURITY OF PAKISTAN

Presentation to Ghulam Ishaq Khan Institute

Mechanical Engineering Dept. October 26, 2011

PresenterAsimRiaz

Prospects and Challenges

Indeed, in the creation of the heavens and the earth and (in) the difference of night and day, there are signs for men of understanding. Men who remember Allah, standing, sitting, and reclining and think deeply on the creation of the heavens and the earth; Our Lord! Thou hast not created this in vain! Glory be to Thee! Then give us salvation from the penalty of the hell fire.

Quran, Al-Imran-190-191

I seek refuge of Allah from the outcast satan

Allah is the protecting Guardian of those who believe. He brings them out of the darkness into the light... Quran, Bakrah-257

Problems Solutions

We are here to make a difference…

Prerequisite

Hyperlink

Concept of Energy

Security

State of Energy Sector

Global Perspective

Way Forward

Reviewed by: Mr. Zakauddin Malik, Former MD and Chairman OGDCL

Mr. Ashfaq Mahmood, Ex-Secretary M/o Water & Power Mr. Muhammad Raziudin, Former MD OGDCL, CEO ARL

Energy

Security

Adequacy

Reliability

Affordability Viability

Diversity

OUTCOMES

Independence

Maintain degree of freedom in foreign policy

Sustainable economic development

Reduced risk to interruptions

The Economy is not vulnerable to external shocks

Demand Growth

Security of Supply

Environmental Impacts

Supply Challenges

Policy Planning

Technology

•Economic Growth •Population •Urbanization •Rural Electrification •Life Style •DSM •Energy Conservation

• Conventional ̵ Oil, Gas, Coal

• Renewable ̵ Hydro, Solar, Bio

• Energy Options ̵ Indigenous ̵ Imported

•Oil & Gas •Power

• Pollution ̵ Water ̵ Air

• Climate Change • Global Warming • Using R.E, Clean Coal technology, CCS, mitigation…

• Realization of Indigenous Resources •Import options •Vulnerability to Shocks, interruptions • Step up exploration Security of supply is simply Energy Security

Ref: Dr. Steven E. Koonin, BP

State of Pakistan’s Energy Sector

• TOE stands for Ton of Oil equivalent and ‘m’ Stands for Million so we write mTOE – 1 TOE = 42 Giga Joules = 7.4 Barrels of Oil

– 1000 Liter Petrol = 0.86 TOE – 1000 Liter Diesel = 0.98 TOE – 1 MWh = 0.22 TOE @ 39% efficiency – 1 TOE = 4.54 MWh@39%, 11.62 MWh@100%

– 1 Million Cubic Feet of Gas = 23.4 TOE Hyperlink

• Geological Potential: 282 Trillion Cubic Feet Discovered: 54 TCF Produced: 26 TCF Remaining: 27.6 TCF Production: 1.45 TCF

• Reserve to Production (R/P) Ratio: 19 Consumption: 1.27 TCF Gas

• Geological Potential: 27 Billion Barrels Discovered: 1 Billion Barrel Remaining: 306 Million Barrel R/C Ratio: 2.3 R/P Ratio: 13 Net Oil Imports: 82% Production: 23.7 MB Consumption: 145 MB Oil

• Geological Potential: 186 Billion Tons Proven: 3.45 Billion Tons Production: 3.48 Million Tons Consumption: 8.4 Million Tons 1.85% of Coal Potential is realized; 66% of Coal is imported in TOEs

Coal

• Hydro-Electric Potential: 55,000 Megawatt (MW) Realized: 12% • Installed Hydel Capacity: 6444 MW Remaining : 48,556 MW Hydro • Solar Potential is 2.9 million MW, PV, CSP, Solar water heaters… • Wind potential is 346,000 MW with Gharo Corridor of 55,000 MW • Small-Hydel potential 4,500 MW, Biomass, Biodiesel, Ethanol…

R.E

Source: HDIP, EYB 2010

1995 2000 2005 2010 0

5

10

15

20

25

30

35 Million TOE

Natural Gas 30.8 mTOE

Coal 4.62

mTOE

Electricity 7.46 mTOE

LPG 0.4 mTOE

Total Supply 63.1 mTOE

Oil 19.8 mTOE

FY: 2009-10

Gas

Oil

Coal

LPG

Primary Electricity

Industrial 39.7%

15.6 mTOE

Other Gov. 2.1%

0.786 mTOE

Domestic 21.2%

8.36 mTOE

Commercial 3.4%

1.53 mTOE

Transport 31.4%

11.65 mTOE

Agriculture, 2.2%, 0.85 mTOE

Total 38.8 mTOE

Diesel 7.64

mTOE

Petrol 2.06

mTOE

CNG 2.3

mTOE

E-10, 5067,

0%

0.042 % E-10, 0.47 mTOE

63.5%

19.2%

17.2 %

Transformation Loss: 17.1 mTOE T&D Losses: 2.47 mTOE Non-Energy Use: 4.13 mTOE


Primary -Mining -Drilling -Harvesting

Secondary -Processing -Conversion -Transform

Final -Transmission -Distribution -Transportation -Storage

End Use -Industry -Domestic -Commercial - Agriculture

Losses

Hyperlink

PRIMARY ENERGY SUPPLY

CONVERSION TECHNOLOGIES

END-USE TECHNOLOGIES

DEMAND FOR ENERGY SERVICE

Industry, e.g. Process steam Motive power Commercial, e.g. Cooling Lighting Households, e.g. Space heat Refrigeration Agriculture, e.g. Water supply Transport, e.g. Person-km

(PRIMARY ENERGY) (FINAL ENERGY) (USEFUL ENERGY)

Mining, e.g. Crude oil Natural gas Coal Imports, e.g. Crude oil Oil products Exports, e.g. Oil products Coal

Renewables, e.g. Biomass Hydro Solar Wind

Fuel Processing Plants, e.g. Oil refineries Hydrogen Ethanol Power Plants, e.g. Conventional IGCC Solar Wind Nuclear CCGT Fuel cells CHP

Industry, e.g. Steam boilers Machinery Commercial, e.g. Air conditioners Light bulbs Households, e.g. Space heaters Refrigerators Agriculture, e.g. Pumps Tractors Transport, e.g. Gasoline car Fuel cell bus

DEMAND PROJECTIONS RESOURCE SUPPLY-COST CURVES

TECHNOLOGY COST AND PERFORMANCE

DEVICE COST AND PERFORMANCE

Thousand Tonnes of Oil Equivalent

Imports 21,640

Indigenous Production 43,269

From Stocks 113

Indigenous Energy Availability 64,909

Total Primary Energy Supplies 63,088

Exports 1,523

Nuclear, Hydro and Imported

7,455

Natural Gas 30,809

Crude Oil, Petroleum Products

and LPG 20,202

Coal 4,622

Bunkers 411

Use in Transformation 20,188

Final Energy Consumption 38,768

Lubes, etc. 427

Natural Gas 3,422

Coal 283

Non- Energy

Use 4,132

Coal 4,282 Petroleum Products

and LPG 11,406

Natural Gas 17,025

Electricity 6,055 Transformation Losses

17,114

Energy Sector Own Use

606

Transmission and Distribution Losses

2,468 Consumption by Economic Sectors

Commercial

Agriculture

8 5 0 Domestic

8,360 Industry 15,605

Transport 11,655

Other Govt.

7 6 8


Domestic 17%

5.13 mTOE Other

4% 1.2 mTOE

Gen. Industries 25%

7.5 mTOE Fertilizer 18%

4.28 mTOE

Power 29%

7.1 mTOE

CNG 8% 2.3

mTOE

Gas Shortage 1.5-2 BCF /day


CNG Sector consumes only 8% of Gas but generate 30% of gas revenues for Gas utility co. High tariff

80% Population do not have access to gas pipeline yet 20% consume 17% of gas…

Fertilizer Sector is over subsidized…

Where is our huge Coal, Hydel, Renewable potential?

Total Gas Consumption 1.27 Trillion Cubic Feet

Source: ISGS

17

0.00

2.00

4.00

6.00

8.00

10.0020

10

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Bcf

d

Existing Gas Fields

Total: 20.2 Million Tonnes

Supply

Consumption

• Oil Import Bill was 9.99 billion US$ in Financial year 2009-10

• Oil Consumption concentrated in the transport and power sector i.e. 92.4%


Oil for power sector must be replaced with Hydro and Coal power otherwise our economy will collapse and industry become a dead wood..

Comments on Sectorial Fuel Prices • Natural Gas pricing is not based on

economic principle of scarcity and optimal utilization which resulted in misuse and misallocation of this precious resource

• Cheap pricing of Natural Gas is an entry barrier to Coal, Renewables and Hydel

• Domestic Gas is no longer a surplus resource; reserves are in sharp decline. LNG will affect WACOG significantly

Against For CNG • Subsidy to medium

& rich Class • Vehicles mostly non-

commercial • Affect on refinery

mix, surplus naphtha • Power Loss in engine • Limited Range

• Green Fuel • Indigenous • Extensive Infrastructure

& supporting Industry • Commercial vehicle

Conversion due to Price Differential…

• Reduces import bill • Higher tariff

CNG Industry has no alternative for Gas

• Lack of Demand Side Management • Tariff structure is not rational. Subsidies esp. cross

subsidy to domestic sector and not targeted for poor • Circular Debt due to subsidy, non-payment & pilferage • Seasonality of Hydel power • Shortfall in gas supply • Fuel Oil supply issues due to financial constraints • Lack of diversification in generation mix • Poor Governance and Regulation • High power system losses

2008-09 2015 1 Average Power System % Losses 23.3% (10.3%-36%) Targets not available 2. Thermal Generation Efficiencies 16%-34% Limited plans

3. Thermal Power Availability 50%-60% Situation unaddressed

4. Demand Side Management Nil CFL Scheme only.

5 Overheads Lines/ Transformer In large numbers 6 SAIFI (System Average Interruption Frequency Index) 0 – 57089 13 7. SAIDI (System Average Interruption Duration Index) 22.9 – 5706194 14

Power System Capacity of PEPCO as on May, 2011

Installed Capacity

Dependable Capability

20964 MW 18882 MW

Average System Capability of PEPCO as on May, 2011

Summer Winter

12632 MW 10233 MW

Source: NTDC, PECPCO

Nuclear 3.3%

Hydel 29.4%

Oil 37.8%

Coal 0.1%

Gas 29.4%

WAPDA 50.0%

KESC 8.4% PAEC 3.0%

KAPCO 8.4%

Uch 4.3%

Rousch 3.4%

HUBCO 9.2%

Liberty 1.6%

Other IPPs 11.7%

12,969 14,818 15,658 15,662

17,399 17,498 17,799 17,798 19,257 19,384 19,450 19,420 19,420 19,786 20,922

95-96 96-97 97-98 98-99 99-00 0

5,000

10,000

15,000

20,000

25,000 MW

Hydel Thermal (WAPDA) Thermal (KESC) Thermal (IPPs) Nuclear

00-01 01-02 02-03 03-04 05-06 04-05 06-07 07-08 08-09 09-10

& Imported

By Type By Company Power Generation Total: 95,608 GWh

Installed capacity average growth was 0.21% in these 5 years. 163 MW added

GDP average growth in this period was 7% compare to historic average of 5%


FY: 2009-10

Hydel Nuclear

Coal

Oil

Gas

0%

20%

40%

60%

80%

100%

37%

30%

51% 29%

53%

30%

15%

Source: HDIP, EYB Database

0

1000

2000

3000

4000

5000

6000

7000

1950-60 1960-70 1970-80 1980-90 1990-2000 2000-2010 2010-2012

239 428

943 1292

1928 1706

381 239

667

1610

2902

4830

6536

6917

MW

YEARS

CAPACITY (MW)

COMMULATIVE CAPACITY (MW)

Source: Wapda

Note: Below 1000 cubic meter per capita; Pakistan becomes water starved country!

Source: Wapda

Total: 74,348 GWhr

Constrained Power Shortage 5000 MW

Domestic 46%

Commercial 7%

Industrial 27%

Agriculture 13%

Bulk Supplies 6%

Others 1%


Just look at this! 46% of

Non-economic subsidized

consumption

8,0009,000

10,00011,00012,00013,00014,00015,00016,00017,00018,00019,000

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Months

Loa

d in

MW

Computed (2010-11)Supplied (2010-11)Computed (2009-10)Supplied (2009-10)

Source: PEPCO

0.511.25

3.12

10.2111.11

13.216.3619.42

29.51

39.37

0

5

10

15

20

25

30

35

40

45

0 2000 4000 6000 8000 10000 12000 14000 16000

Pric

e/kW

h

Load (MW)

Demand MW

Price Rs/kWh

5,000 1.25 12,000 11.11 14,000 14 15,000 Up to 39

>15,000 Infinite

Source: PEPCO

Hydel unit (Tarbela) Price per Unit (Kwh) and they say we wont build Kalabagh Dam…

Rental unit is up to 80 times more expensive than Hydel. They say we will have Rental Power Plants but not Kalabagh

• Rental Contract Rental

• Capacity Purchase Price • Energy Purchase Price IPPs

• Capacity Purchase Price • Energy Purchase Price GenCos

• Flat Rate Nuclear

• Flat Rate • Water Charges Hydel

• Agreement Terms Imports

• Letter of Intent Renewable

PESCO

LESCO

IESCO

QESCO

HESCO

MEPCO

GEPCO

FESCO

Transmission Distribution Generation

CPPA

GoP

app

rove

s th

e N

EPRA

tarif

f

Generation Cost (G.C) determined by NEPRA

G.C + Wheeling Chargers of NTDC

G.C + W.C+ Distribution Margin

Tariff Effective (Rs./kWh) Determined Notified Difference

24-02-2007 5.13 4.25 0.88 01-03-2008 5.58 4.78 0.80 05-09-2008 8.35 5.58 2.77 25-02-2009 8.35 5.63 2.72 01-10-2009 8.35 5.88 2.47 21-12-2009 10.09 5.96 4.13 01-01-2010 10.09 6.65 3.44 01-07-2010 10.35 7.05 3.30 01-10-2010 9.57 7.19 2.38 01-11-2010 9.57 7.29 2.28 15-03-2011 9.57 7.44 2.13 06-05-2011 9.57 7.58 1.99

Source

Process Refine

PSO Genco

NTDC DISCO

Meter End Use

Circular Debt Rs. 350 billion

Subsidy Rs. 250 billion

Households

Firms

Goods & Services

Land, Labor Capital

Payment of Goods & Services

Rent Wages Profits

Leakages Taxation\Imports\Savings

GDP Injections GoP Spending\Exports\Investment

National Income

Hyperlink

Cost to the Industrial Sector Rs 157 billion Cost to the other sectors of industrial loss of Value Added Rs 53 billion Total cost of industrial load shedding to the economy Rs 219 billion Loss of exports Rs 75 billion Additional cost of Power self Generation Rs 32 billion Percentage loss of Production 7% Loss of employment in the economy 400,000

Source: IPP estimates listed in Beacon House National University publication: State of the Economy – Emerging from Crisis 2008

Source: Trading Economics

• Pakistan’s total GHG emissions were 310 million tones of CO2 equivalent comprising of CO2 54%, CH4 36%, N20 9% and others 1% in 2008 (Ref: National GHG Inventory)

• Responsible for 0.8 per cent of global GHG emissions • Ranks 135th in the world in terms of per capita GHG

emissions; Ranks 6th in population (Ref: GoP 2010) • It ranked 16th out of 170 countries in a Climate Change

Vulnerability Index (Ref: Maplecroft 2010) • CO2 emissions per unit of energy consumption in

Pakistan are among the lowest in the world • Reason! Historically, our primary energy supply mix is

about 50% Natural Gas with very low carbon footprint, 11% Hydel and 1.1% nuclear which are Carbon free

• Human Resource Development • Governance of Energy Sector

– Incompetence, nepotism and corruption – Too many institutions involved in a activity area – Lack of National Integrated Energy Plan – Lack of financial and administrative autonomy

• Regulator’s Role – Clarity of Role and Autonomy – Lacks market development approach and monitoring – Accountability – Capacity Building – Tariff Calculation and determination is formula based

• Reforms/Restructuring and Stalled Privatization – Energy Sector investment need cannot be met by the

public sector alone – Stalled privatization programs – Vertical Integration – Problematic; Unbundled, Now?

• Irrational and Inefficient Tariff Structure – Untargeted Subsidies, – Notified tariff are below recovery cost – Failure of Government to pay subsidies on time – No Protection to Economic Sector i.e. cross subsidy is

given to domestic sector in both Gas and Electricity; Line losses, delivery Cost and pilferage/nonpayment are very high in domestic sector compared to Industrial

Pakistan's Energy Security

Global Perspective

Source: World Energy Assessment 2001, HIS, WoodMackenzie, BP Stat Review 2005, BP estimates

“The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil.” Sheikh Yamani, Saudi Oil Minister, 1962-1986

0

1,000

2,000

3,000

4,000

5,000

6,000

Oil Gas Coal

R/P Ratio

41 yrs. R/P Ratio

67 yrs.

R/P Ratio

164 yrs.

Proven Proven

Proven

Yet to Find Yet to Find

Yet to Find

Unconventional

Unconventional

Rese

rves

& R

esou

rces

(bnb

oe)

Source: BP Statistical Review 2006

78%

10%

61%

15%

88%

65%

22%

90%

39%

85%

12%

35%

Consumption Reserves Consumption Reserves Consumption Reserves

OIL GAS COAL

3 Largets Energy Markets(N.America + Europe + Asia Pacific)

ROW

as the developed countries have 65% of proven coal reserves.

Reference: IEA 2005

Conventional Oil Reserves Unconventional Oil Reserves

Oil & Gas Consumer

Industrialized Rich, Powerful

National Interest Security of

Supply

Control of Sovereignty

Corporate Control

Military Power

Petrodollar LDC, Poor,

Weak IMF Loan

World Bank

Inter Dependent

Economic Stakes

Strategic Stakes

This slide is reviewed by a leading senior Economist of Pakistan Civil Service

• Muslims have 69% of Oil Reserve and 58% of Gas Reserve of the World; produces 40% of world agriculture production yet most of Muslim population live in state of poverty

• We hold key sea trade routes i.e. Straits of Hormuz, Straits of Malacca and Suez Canal • Global economy rest on foundation of economical supply of plentiful Oil & Gas but Islamic

beliefs strictly prohibits Non-Muslims to have presence in Arab world (esp. K.S.A) Hence, War on Terrorism is aftermath of unhappy marriage of Muslim Arab and West over Oil; So, Arab world (esp. K.S.A) will keep producing terrorists, Pakistan suffers from this!

• Osama used Tribal belt, USA used Tribal belt against Russia, History used these fighters since Alexander. Tribal people are born fighters with harsh & rugged lifestyle. Thus, solution is militarization of Tribal belt of Pakistan and Afghanistan and use it as instrument for Muslim World Energy Security. No wealth is yours if you cannot protect it

This

slid

e is

revi

ewed

by

a se

nior

Def

ense

Ana

lyst

Energy Starved Growing Economy of India

Oil & Gas of Middle East

Energy Rich Land locked Central Asia

Sea Route for China

Gawardar port

Pakistan

Reference: CediGaz

0 %10 %20 %30 %40 %50 %60 %70 %80 %90 %

100 %

Rus

sia

Iran

Qata

r

Sau

di Ara

bia

Unit

ed S

tates

Abu

-Dha

bi

Nige

ria

Ven

ezue

la

Alge

ria

Ind

ones

ia

Ira

q

Aus

tralia

Chin

a

Tu

rkmen

istan

Norw

ay

Mala

ysia

Egy

pt

Kaz

akhs

tan

Kuw

ait

Uzb

ekist

an

Can

ada

Liby

a

Aze

rbaija

n

Neth

erlan

ds

Ind

ia

Ukra

ine

Pak

istan

Boli

via

Oman

Rom

ania

Proven Gas Reserves of world’s top 30 Gas Producing Countries

Proven conventional gas reserves are fairly concentrated…

World Gas Reserves: 6621 TCF

BP Stats 2010

Option for I-P, Q-P and Central Asian Gas pipelines We have access to about one third of World’s Gas…

Natural Gas may continue to be our major supply source in energy mix due to the extensive pipeline infrastructure i.e. transmission & distribution grid

Yoloten-Osman Gas Field

TURKMENISTAN

IRAN

AFGHANISTAN

PAKISTAN

Herat

Char Rah

Kandahar

Quetta

Multan

Lahore

Fazilka

Nawabshah

Iran Shahr Asaluyeh

IP Iran Segment, 56” = 900 Km completed

Pak-Iran Border Delivery Point

‘Mile 250’

IP Pakistan Segment = 785 Km 750 MMcfd, 42/48”

$ 1.245 billion

TAPI Turkmenistan Segment = 145 Km

TAPI Afghanistan Segment = 735 Km

TAPI Pakistan Segment = 800 Km

Sulaimanke

IP Pipeline - 1935 Km Iran Segment – 1150 Km Pakistan Segment – 785 Km

TAPI Pipeline 1,680 Km 3.2 Bcfd, 56” $ 7.6 billion

Iran Shahr to ‘Mile 250’= 250 Km

to be completed Gwadar

Source: ISGS

0

10

20

30

40

50

60

70

80

90

100

Pakistan India China USA

31.2 32 23

37

47.5

6

2.5

24

9.2

51 67

22

10.9 3 6

2

1.2 8 1.5 15

Oil Gas Coal Hydel Others

%

US $

Years Source: World Bank

Pakistan’s energy mix to provide affordable and sustainable energy supplies at unsubsidized price to its economy by using of indigenous coal and hydel resources like China and India…

• Adequacy! Can our energy Supplies to meet demand on sustainable Basis?

• Diversity! our energy mix is diverse or not at present? Can it be made to diversify?

• Affordability! Our energy prices are competitive compared to world or not?

• Viability! Sector Governance and Institutional viability of our present mix and future mix…

• Reliability! Are there any risks of physical interruptions in energy supplies?

Way Forward to Energy Security

Our Way… is the Coal Way

There are no speed limits on the Road of Excellence

• Demand Side Management Opportunities – Standardization of Equipment & Appliances – Legal framework for Energy Efficiency – ENERCON to play its role, Introduce ESCOs in private – Off Grid Solutions using R.E, Private Sector for solar – Use of Solar Water Heaters – Differential Tariff, Smart meters, Prepaid Billing… – Mass transport systems – Trust building on Demand side Management – Successful Awareness Campaigns on DSM – Control Power system line losses and UFG

NEGAWATT! MW saved is better than MW produced

Sector Realizable Saving as % of Consumption in FY 2008

Domestic Households 25.8% Commercial Sector 23.9 %

Industry 11.1 % Agriculture 19.6 % Transport 13.9 %

Other Government 2.7 % Sub – Total Demand 15.4 %

Transformation 13.8 % Total Major opportunities: Power , UFG, Appliances, DSM

14.9 % Potential saving 3 Billion US $

per year

• Single integrated Energy policy for all energy sectors i.e. upstream, downstream, R.E, nuclear, Coal etc

• Formation of Ministry of Energy is required as there is lack/difference of collective and integrated plan/view of the Country, Region and the World

• Merge M/o Water & Power and M/o P&NR to work under M/o Energy; OGRA & NEPRA merger to follow up

• M/o Energy must have representative of Planning Commission, M/o Finance, M/o Petroleum & Natural Resources , M/o Water & Power, Federal & Provincial representatives, Regulators, Industry and the consumer so as to form a structured group of professionals drawn from all public and private sectors entities of the country

Power Sector US $ Billion Source Public 27.8 W.G for 10th 5 year Plan

Private 1.0 Major investment in under implementation Hydro

projects is proposed 28.8

Fuel Sector - Oil & Gas Production and refining, LNG Import

11.0 FODP ESTF Report 2010

- Others Pipelines explorations & Coal sector, T&D

10.2 Guestimates

14.2

Total 50 Rs. 850 b/yr

• Gradually and systematically eliminate subsidies from domestic, refinery and fertilizer sectors

• Subsidies should be provided directly through support programs so as to avoid the benefit going to manufacturer, middle men and rent seekers

• Resolve Circular Debt Issue and prevent recurrence • Attract Private Sector Investor • Set up Energy Development Funds through Donors • Develop Bond Markets , Banking Sector (exposure

autonomy, innovative products) • Unbundle and divest public energy sector asset • Improve law and order, stop corruption

• Develop provincial consensus on promotion and development of hydropower generation

• Pre-feasibilities to be made in great number through donors and PSDP fund

• Develop run-of-river projects on massive scale through indigenous resources

• Strengthen engineering and design capacities of relevant institutions required for building large dams and related power equipment

• Develop financial capacities in lending institutions • Power Policy to address evacuation for hydro power

Dam Capacity (MW)

Bunji 7,000

Basha Dam 4,500

Dasu 4320

Kalabagh 3,600

Kohala 1100

Neelam-J 969

Munda 740

Total 22,229

Long Term 8-15 years

Name Project Cost in

Million US $

Installed Capacity in MW

Project Time in years

Diamer Basha 8273 4500 12

Golen Gol 155.7 106 5

Neeium Jhelum 1629.5 969 9

Kurram Tangi 668.7 83 4

Munda 900 740 6

Kohala 2155 1100 6

Keyal Khwar 145.6 122 7

Name Project Cost in

Million US $

Installed Capacity in MW

Project Time in years

Phandar 70 80 4

Dasu 7800 4320 8

Bunji 6838 7000 8

Akhori 3300 600 6

Lower Spatgah 614 567 6

Palas Valley 667 621 6

Kalabagh No estimate 3600 Political Dispute

Units produced/year = 3,600 × 1,000 × 8760 × 0.5

Installed Capacity (MW) of Kalabagh

Conversion factor of Mega to Kilo-Watt

No. of hours in the year i.e 365 days × 24 hours

Assumption that Plant will operate 6 months per year

15,768,000,000 kWh Total Unit Produced/year

=

• Cheap Electricity: Rs- 1.50 per kWh • Nearby Major Load Centers • Water Storage worth tens of Billions Rs. • Extended irrigation, Flood Control • Restore capacity of Tarbela & Chasma • Location is close to the National Grid

Salient Features • Concrete Gravity Dam (Build cost is less) • Dam is connected to both Road/Rail • Last Down Stream location for Dam

before Indus enter in to Sindh plains • Largest catchment area, Most diverse water source, Kabul, Haro,Swan, Indus

1 kiloWatt hours (kWh) is Billing

Unit of Electricity

1 kWh =3412 BTU

Unit Cost determined by NEPRA: Tarbela: Rs. 0.53 Ghazi: Rs 2.20

Mangla: Rs. 0.36 Ave. Hydel: Rs 1

Thermal power producers: IPP/Gencos: 9-17¢/kWh

Rental : ↑20¢/kWh (1$ ≈ 85.25 PKR)

Kalabagh Dam will save 2.5 billion US $/year

(2 times US aid for war on terror) compared to Thermal Power

1. Flooding of Peshawar Valley including Nowshera Backwater effect of Lake would end about 10 miles

downstream of Nowshera. 2. Area of Mardan, Pabbi and Swabi plains would be

adversely affected creating water logging and salinity Lowest ground levels at Mardan, Pabbi and Swabi areas

are 970, 960 and 1000 feet as compared to the maximum conservation level of 915 ft for Kalabagh operation pattern of reservoir cannot block the land drainage and cause water logging or salinity

3. Population Displacement Total population to be relocated is 120,320 of which

78,170 shall be from Punjab and 42,150 from NWFP.

4. No surplus water to fill Kalabagh reservoir Annual average wastage of water is 21 MAF to Sea.

Kalabagh Reservoir will be filled up with 6MAF only, which will gradually be released to the provinces.

5. Anxiety the project would render Sindh into desert Dams don’t consume water but only store water during

flood season and make it available on demand basis. Infact, Sindh will get extra 2.25 MAF for irrigation...

6. Sea Water intrusion estuary would accentuate Data shows that sea water intrusion seems to be at its

maximum even now, and it is unlikely to be aggravated further. Annual average release of even 8.6 MAF below Kotri will be possible to stop the Sea water intrusion

• Hydroelectric Generation at least 26,000 MW by 2025. Implement the Wapda Plan, include Kalabagh

• Renewable Energy resource i.e. Solar & Wind potential for power generation may be very tempting but public sector funding to it should be avoided till technology matures in the world and price goes down. Moreover, these sources are intermittent hence need backup batteries. The battery technology is still very primitive in the world… Leave Wind & Solar for private sector only!

• Hydro power technology is reliable & established, used for decades i.e. divert limited public funding from solar & wind to Major Hydel Power Projects

• Stepped up E&P activities for Oil & Gas by improving drilling intensity from present i.e. one well /1376 sq. km

• Have a formula of making the local population as shareholders in Oil & Gas production areas

• Law & Order situation and terrorism should be addressed appropriately

• Proper well head gas pricing to attract investor • Enhanced Oil Recovery, In Fill Drilling, Tight Gas • R&D projects to promote and accelerate the

exploration activity in unexplored area of the country in order to fill in future energy gaps

ZONE-II

ZONE-I

J&K Disputed Territory

ZONE-II

ZONE-I

ZONE-III

Balochistan Sindh

Punjab

N.W.F.P

ZONE-O Shallow

Deep Super Deep

ONSHORE Zone I: (High Risk High Cost) Zone II: (Medium Risk High to

Medium Cost) Zone III: (Low Risk Low Cost)

OFFSHORE Zone 0: Indus & Makran

Oil & Gas Exploration &

Production Policy 2009

Non-performing Exploratory Licenses

due to security reasons

Hyperlink

• Prioritize use of gas in the following order: – 1) Industry 2) CNG* 3) Power generation 4)

Commercial 5) Domestic (using economic principle) • Eliminate Cross Subsidy in Gas Sale Price i.e.

Domestic and Fertilizer sector • Expand Oil importing facilities

– Up-gradation of Port Qasim – Development of Gwadar Port

• Build strategic relationship with crude suppliers and diversify supply source

• Minimize use of Fuel oil for power generation and industrial usage as its supplies are expected to be restricted and with volatile pricing

• Import of energy – Gas Import

• Pipeline – IPI Central Route – IPI Coastal Route – Qatar Deep Sea Route – TAPI

• LNG – Oil Import – Electricity Import

• Tajkistan • Iran

– Import of Coal – Import of LPG

Year Future Nuclear Power Plants to be added to Grid

Cumulative (MW)

2011 K-1 and C-1 415

2011 340 MW (C-2) 755

2016 340 MW 1095

2017 340 MW 1435

2019 1000 MW 2345*

2021 1000 MW 3345

2022 1000 MW 4345 Source: Integrated Energy Plan, M/o Finance, GoP

The Pak-China link needs to be kept engaged and strengthened Chinese supply capability limited to 300 MW size but larger 1000 MW size possible after 2-3 years NPPs require about 7 years in construction. (Energy Project Cycle) Enhance exploration and infrastructure for mining

Hyperlink

• Development of energy sector esp. Coal & Hydel requires tens of billions of Dollars investmentt. It is paramount to create the enabling environment for investor through: – Develop the Human Resource… Requirement is paramount

for every sector of energy Qualified, competent and trained Human Resource Consistencies and Quality of Policies i.e. Energy, Trade,

Economic, Foreign, Security & Environment Transparency, Impartiality, fairness, reasonableness, Merit

appointments, Systematic & effective implementation, faster decisions, policy shifts, regulatory changes, capacity building

• Revamp the selection and screening process, the salary structure, recognition and reward system, behavioral issues of energy sector organizations

Umar bin Khattab (R.A, Al-Farooq) once gathered people

and asked them to make a wish. They wished that this room may be

filled with gold & silver and they spent it in path of ALLAH. He

asked them again to make a wish they said may this room is filled

with jewels and diamonds and they spent it in path of ALLAH. He

didn’t like and asked them again. They gave up and asked “O Umar

tell us what do we wish, fill this room with what?” He said “I wish

that ALLAH fill this room with men like Abu-Ubaidah ibn al Jarrah

and I send them all in path of ALLAH.”

The people thanked Umar R.A for this wonderful advise…

Hyperlink

• The primary use of coal is power generation worldwide • Today the world gets more than 38 % of its electricity

from coal, China generate 80 %, India generate 66%, USA generate 60% and Pakistan generate 0.1% electricity using coal which is cheap and economical

• In the Asian region 45 % of power is generated from coal, which is expected to increase to 60 % by 2020

• Advanced technologies for coal gasification, clean coal technologies, fuel cells and syngas conversion etc are available but very expensive at present

• Pakistan should focus on conventional open cast integrated mining i.e. power plant near the mine mouth

• Area of the field: 9000 sq. km • Distance from Karachi: 380 Km • Coal seam thickness: 0.2 -22.8m • Coal seam depth: 114-203m • Potential Reserves: 175 Billion Tonnes • Coal category is Lignite having calorific value between

6,200-11,000 BTU/lb, it has high moisture i.e. 47%, ash- 5.75%, low sulphur-1.2% and volatile matter-33%

• There are three aquifers at an average depth of 50m, 120m (above seam) and more than 200m (below seam) which needs hydrological solution. Dune sands, silt stone cover, very high stripping ratio and high moisture content in Thar Coal make Thar mining and power generation challenging…

• The climate of Thar is arid and rating to cool winters and dry and warm summers

• Rainfall is the only source of fresh surface and ground water. The rainfall is limited and occurs during the monsoon season from June-Sept. with a high intensity and low frequency

• The desert itself let flourish natural vegetation of all kinds after rain

• All the tropical crops are grown round the year • Wild life of Thar desert viz; deer antelopes, black buck,

wild ass, and peacock are world wide famous

1 Block I Available for Investment

2 Engro Sindh Coal Mining Company (40% Sindh Government; 60% Engro)

1200 MW

Feasibility study due in June 2010; Strip mining and power generation potential 4000MW, 24 million tons/year for 30 years. PEPCO has also Signed MOU for 1200MW Power Plant

3A

Cougar Energy (Australia) Under Ground Coal Gasification Project

400 MW

Drilling License awarded to an Australian firm Pilot Burn planned in 36 months; Technology planned is Ergo Exergy ; 400MW planned;

4 Bin Daen Group (UAE)) 1000MW

Integrated Coal to power project, 1000MW planned; currently exploring possible partnerships to carry out feasibility studies.

5 Under Ground Coal Gasification Project Dr Samar Mubarakmand

100MW

100 MW planned by the end of 2012. Currently unit gasifier being constructed, technical team has been mobilized and desktop studies for gas handling completed.

6 Oracle, PLC (UK) 600MW

Strip mining; 600MW planned. ESIA completed; anticipate mine commencement Dec. 2011.

Block III B, VII & VIII Available for Investment

• Thar Coal potential can provide Hundred Thousand (100,000) MW of electricity for more than two (2) centuries

• Equivalent to about 617 Billion Barrels of Oil, Worth 30 trillion US $ @ 50$/Barrel More than 2 × Saudi Oil reserves

• Pricing mechanism must provide minimum 16% return on investment for Thar Coal Fired Power Plant

• Open Cast mining at the depth of 145 meter with 3 aquifers will be challenging, So Thar is Medium to Long term option…

• Provide necessary infrastructure and development in Thar area i.e. water, road & security

• Develop policy for Integrated Coal Mining/Power • Put professionals of coal field at the helm

Oil Gas Coal Measured Coal Indicated Coal Inferred

Minham

Bamnia Bhil Jo Tar

Bamnia Bhil Jo Tar

Jagirharho

Islamkot

Dhinkario

Kikari

Sinhar Vikian

Mula Jo Tar

Varvai

Tilvai

Mattu Jo Tar

Khario BLOCK I

BLOCK IV

BLOCK III

Meghe Jo Tar Kharo

Sonalba Singharo

Thae Jo Tar

Jinde Jo Tar

Saleh Jo Tar

B

A

Bhitro

Vakrio

Legend

Drill Holes

Blocks

Villages

Track

BLOCK II

70° 20’ 70° 10’

24°

24°

24°

24° 70° 30’

Pakistan Energy Resource Potential

• Energy Sector is in a critical state • Energy Efficiency & Demand Side Management to get the highest priority • Prepare to live with planned load shedding • Pay for what you Consume policy must be adopted i.e. remove subsidies • Actual availability of resources for Investment may be much less than

planned mainly due to lack of financing & investment, war on terrorism and resulting law & order situation due to the aforementioned war

• Militarize the Tribal belt of Pakistan & Afghanistan and use it as instrument for Muslim World’s Energy Security. United Muslim Army under control of OIC like NATO. It will end the terrorism!

• It is imperative to realize Wapda plan of Hydroelectric Generation of 26,000 MW by 2025 also include Kalabagh Dam. Resolve all disputes!

• Develop Thar Coal, energy secured for centuries • Integrated Energy Planning is the need of the hour • Improve Governance, No Corruption, HRD is the Key…

We must understand that the existence and secure future of Pakistan do not depend on nuclear deterrence and properly guided missiles but on planning and management of our resources by properly guided men.

(‘Men who make the difference’ article by Asim Riaz)

Prepared by: Mr. Asim Riaz, B.Sc Double Math-Physics, B.Sc Mechanical Engineering, Master in Energy Management • Participated in developing and validation of

Pakistan Integrated Energy Model (Pak-IEM) • Member Editorial Board of Pakistan Journal for

Hydrocarbon Research (PJHR) Contact: +92-345-5100667; [email protected]

I seek refuge of ALLAH from the outcast satan

And you shall see the angels surrounding the Throne

(of ALLAH) on all sides, glorifying the praise of their

Lord; and judgment shall be given between them

with justice, and it shall be said in the end:

Praise be to ALLAH, the Lord of the Worlds! Quran, Az-Zumar, 75

Hyperlink

pakistan energy sector

Documents