TOHEED AHMAD

SP09-MBA-099

A REPORT ON

ELECTRICITY CRISES IN PAKISTAN

CUSES AND SULUTION

This report is based on the generation capacity and the demand

for electricity in the country and causes for current shortfall in
the supply also discussion and present possible solution for
solving this problem. In this regard we examine the working
efficiency of the WAPDA and PEPCO.
Purpose of this report is to highlight the importance of electricity
in the Pakistan economy and the daily life of the people. How
load shedding affects the business. What they thought about the
future business in Pakistan.
It also analyses the current potential to generate electricity and
resources available in this perspective such as water reservoirs,
atomic energy, wind turbine, solar energy etc.
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ELECTRICITY CRISES IN PAKISTAN

CAUSES AND SOLUTION

REPOTED BY: TOHEEDAHMAD

SP09-MBA-099

SUBMITTED TO: SIR UBAID

CIIT ABBOTABAD

DATED: 31st DECEMBER 2009

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PREFACE

This report is generated for the purpose of understanding the

electricity crises in the Pakistan that our country is facing since last
few years. As time passing it is becoming more dangerous that now it
is going to affect our national economy and industrialist are closing
their business and some transferring their industry abroad because of
load shedding for example textile industry of Faisalabad The report
first disclose electricity situation at the time of independence f
Pakistan and how much we progress in this regard ,introduces the
importance of electricity for the business and economy our
generation capacity and current production then present deep
analysis of the generation methods such as hydro power, atomic
power, wind power projects, solar energy and introduction of the
water reservoirs .Discuses the distribution system effectiveness after
all the report present the solutions on which concerned authorities
can take action so that our country wipe off this problem from our
economy. In this report we take a glance on the neighbored country
china and India their progress in electricity generation and analyze
future plans. We make sure that it will not only complete the
objective that is my assignment but also helpful for the fellow
students to understand the problem and I welcome any suggestion in
this regard.
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ACKNOWLEDGMENTS

In the name of Allah to whom I am

thankful to gave me ability to write.
I am thankful to my parents they
gave pen in my hands. I would like
to thank Sir Tauseef who gave me
this opportunity that polishes my
ability to write. And without internet
it might not be possible to research
at this topic.
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Electricity

Electricity is a general term that encompasses a variety of phenomena

resulting from the presence and flow of electric charge. These include many
easily recognizable phenomena, such as lightning and static electricity, but
in addition, less familiar concepts, such as the electromagnetic field and
electromagnetic induction.
Electricity generation
Electricity generation is the process of creating electricity from other forms
of energy. The fundamental principles of electricity generation were
discovered during the 1820s and early 1830s by the British scientist Michael
Faraday. His basic method is still used today: electricity is generated by the
movement of a loop of wire, or disc of copper between the poles of a
magnet.
PAKISTAN

1947 - In 1947, at the time of independence of India & Pakistan, the

installed generating capacity in the then East Pakistan was only 21 MW.
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Electricity was available to only small elite in the district and sub-divisional
headquarters. The distribution networks in these cities were isolated and
were fed by coal fired steam power plants or diesel generation
In 1965 Pakistani officials contracted with the Canadian government for the
supply of a 125-megawatt pressurized, heavy-water nuclear reactor, which in
1972 became operational near Karachi. This was Pakistan's only nuclear
power plant in 1994, and its operating record is poor. In 1983 plans for a
nuclear plant at Chashma, on the Indus River in Punjab, about 240
kilometers south of Islamabad, were announced. The construction of this
plant was delayed, in part because of the reluctance of foreign governments
to supply needed fuel and technology because of concern over possible
military use of the atomic energy program. In 1993 Pakistani officials
expected the plant to open in 1997 with a capacity of 300 megawatts. China
is providing the necessary technology and materials for the Chashma plant.
Pakistani officials expect that fuel for the plant will be provided by the
uranium enrichment plant at Kahuta near Islamabad. Some observers,
however, believe it is unlikely that the plant will be ready in 1997.
In FY 1992, the country had a total installed generating capacity of 9,293
megawatts, of which approximately 62.7 percent was thermal, 35.9 percent
hydroelectric, and 1.5 percent nuclear. In FY 1991, industry consumed 34.2
of percent of electricity, households 31.7 percent, agriculture 21.4 percent,
commercial businesses 4.3 percent, and other users 8.3 percent. A rural
electrification program increased the number of villages having electricity
from around 14,000 in FY 1983 to nearly 41,000 in FY 1992, leaving only
about 5,000 villages without electricity. After the late 1970s, considerable
improvement was made in transmission facilities. By 1983 a grid connected
generators and urban centers of the more populous areas, largely in Punjab
 7

and Sindh. Installations of high-voltage transmission lines and other

facilities helped reduce power losses. Nonetheless, in 1993 the World Bank
estimated that 28 percent of electricity generated in Pakistan was diverted
illegally in transmission and distribution, and even the government puts this
figure at 12 percent.
WAPDA
In 1959, WAPDA was created to undertake the
task of investigating, planning and executing
schemes for irrigation, drainage, prevention of
water logging and reclamation of saline land as
an autonomous body responsible for integrated
development of water and power resources in
Pakistan. The organization was also entrusted
with the work of implementing Indus Basin
Settlement Plan signed between India and Pakistan in 1960 to develop
replacement works for management of river water and irrigation system.
Since then it has been engaged in building water development projects
which include extensive research and investigation to augment country's
water resources. Member (Water) controls the water Sector in the entire
country divided into north, central, south zones, generally covering the
North Western Frontier Provinces (NWFP) and the provinces of Punjab and
Sindh respectively, for execution of SCARPs and surface water
development, projects. Chief Engineers and Project Directors implement
projects falling under regions within the zone. In addition, the Water Wing
has a C.E (Coordination and Monitoring) for construction and operation of
dams and all other projects under Water wing services (TS) and two separate
General Managers for Ghazi Barotha Hydropower and National Drainage
 8

Project. The Planning Division of Water Wing, headed by a General

Manager, looks after all planning activities on the water side. The activities
of water resources and hydropower development and vision-2025 are
handled by three General Managers i.e. Technical, South, North, GM (P&D)
and GM Hydro Development.
WAPDA, the Pakistan Water and Power Development Authority, was
created in 1958 as a Semi-Autonomous Body for the purpose of coordinating
and giving a unified direction to the development of schemes in Water and
Power Sectors, which were previously being dealt with, by the respective
Electricity and Irrigation Department of the Provinces.
• Since October 2007, WAPDA has been bifurcated into two distinct
entities i.e. WAPDA and Pakistan Electric Power Company (PEPCO).
WAPDA is responsible for water and hydropower development
whereas PEPCO is vested with the responsibility of thermal power
generation, transmission, distribution and billing. There is an
independent Chairman and MD (PEPCO) www.pepco.gov.pk
replacing Chairman WAPDA and Member (Power) who were
previously holding the additional charges of these posts.
• WAPDA is now fully responsible for the development of Hydel
Power and Water Sector Projects.
• PEPCO has been fully empowered and is responsible for the
management of all the affairs of corporatized nine Distribution
Companies (DISCOs), four Generation Companies (GENCOs) and a
National Transmission Dispatch Company (NTDC). These companies
are working under independent Board of Directors (Chairman and
some Directors are from Private Sectors).
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• The Companies are administratively autonomous and leading to

financial autonomy by restructuring their balance sheets by bringing
their equity position to at least 20 percent, required to meet the
prudential regulations and to facilitate financing from commercial
sector (approved by ECC).
• The Loan Liability Transfer Agreements (LLTA) have been signed
with Corporate Entities and execution of loan transfer is complete.
• All Entities have the physical possessions of all their operational
assets.
• On 24th Feb. 2007 Ministry of Water & Power notified
NEPRAapproved Tariff for all Distribution Companies replacing
unified WAPDA Tariff.
• Legal Agreements such as Business Transfer Agreements, Operation
Development Agreement, Energy Supply Agreement, Business
Supplementary Agreement and Fuel Supply Agreement etc. were
executed between WAPDA and Corporate Entities to facilitate
commercial operations.
• Regulatory instruments like Grid Code, Distribution Codes,
Performance Standard for Distribution Companies and Transmission
Companies were drafted and got approved from (www.nepra.org.pk)
in 2007.
• All major lenders gave their consent for transfer of their loan from
WAPDA to Corporate Entities, thus 326 loan assumption agreement
were signed amongst respective Companies, WAPDA and EAD
(Economic Affairs Division) GOP.
• CPPA is established under the coverage of NTDC for payments from
DISCOs to IPPs, GENCOs and NTDC. Ultimately, it will function
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independently under Federal Govt. and all forthcoming IPPs will be

under CPPA.
The Charter of Duties of WAPDA is to investigate, plan and execute
schemes for the following fields:
a. Generation, Transmission and Distribution of Power.
b. Irrigation, Water Supply and Drainage.
c. Prevention of Water logging and Reclamation of Waterlogged and
Saline Lands.
d. Flood Management.
e. Inland Navigation.
The Authority comprises of a Chairman and three (3) Members working
through a Secretary.
WAPDA is one of the largest employers of human resources in Pakistan.
Over the years WAPDA has built-up a reservoir of Technical know-how
and expertise which has made it a modern and progressive organization.
PAKISTAN ELECTRIC POWER COMPANY
The Pakistan Electric Power Company (Private) Limited (PEPCO) has been
entrusted the task of managing the transition of WAPDA from a bureaucratic
structure to a corporate, commercially viable and productive entity. It is a
mammoth task and progress in the initial months was rather slow, but one
should keep in mind that responsibility is enormous and transition is a long
drawn process.
Before going into further details of the restructuring programme, it is
necessary to understand the shift in the GoP policy. The GoP, in line with its
Strategic Plan of 1992 approved by the cabinet committee, had decided to
restructure the entire power sector in the country
• De-regulation of power sector
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• Promotion of IPPs
• Restructuring of WAPDA
• Privatization of select corporate entities
Hydroelectricity
Hydroelectricity is electricity generated by hydropower, i.e., the production
of electrical power through the use of the gravitational force of falling or
flowing water. It is the most widely used form of renewable energy. Once a
hydroelectric complex is constructed, the project produces no direct waste,
and has a considerably lower output level of the greenhouse gas carbon
dioxide (CO2) than fossil fuel powered energy plants.

Hydel Generation
As a consequence of partition of the Indo-Pakistan Sub-Continent in 1947,
India and Pakistan became two independent sovereign states. Hydel
generation capacity of only 10.7 MW (9.6 MW - Malakand Power Station &
1.1 MW - Renala Power Station) existed in the territory of Pakistan. With
the passage of time, new Hydel Power Projects of Small and Medium
capacities were commissioned including the first water storage dam and
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power house at Warsak due to which country's Hydel capability raised to

about 267 MW uptill 1963. The Irrigation System which existed at the time
of partition in 1947 was divided between the two countries without any
regards to the irrigation boundaries which resulted in an international water
dispute which was finally resolved by signing of the Indus Water Treaty in
1960 under the aegis of World Bank. The Treaty assigned three Eastern
rivers (Ravi, Beas and Sutlej) to India and three Western rivers (Indus,
Jhelum & Chenab) to Pakistan. It also provided construction of replacement
works called Indus Basin Projects (IBP) to compensate for perpetual loss of
Eastern rivers' water. The works proposed under the Treaty included two
multipurpose dams i.e. Mangla Dam on Jhelum river and Tarbela Dam on
Indus river having the provision of power generation. These were
commissioned in 1967 & 1977 respectively. However, their capacities were
subsequently extended in different phases.
Hydel Generation Capacity
The total capacity of 13 No. Hydel Stations as of today is 6443.56 ~ 6444
MW which is 37.10% of total installed generation capacity of WAPDA.
During 2007~2008, aggregate energy sharing during the year was 33.32%.
The Hydel Generation Capacity was reduced from 6463.16 MW to 6443.56
MW due to decommissioning of Jabban Hydel Power Station after a fire
incident in November, 2006.
Seasonal Variationsof Hydel Generation
The seasonal variations of reservoir levels and consequent reduction in
Power outputs of storage type hydel projects in Pakistan are very
pronounced. Tarbela with maximum head of 450 ft. experiences variation of
230 ft. while Mangla has 162 ft. variation against the maximum head Of 360
ft. The lean flow period of Tarbela reservoir is from November to June when
 13

the Capability reduces to as low as about 1350 MW against the maximum of

3692 MW during high head period i.e. August to September (15%
permissible overloading on Units 1~10). Lean flow period of Mangla
reservoir is observed from October to March when the minimum generating
capability is 500 MW. The capability rises to as high as 1150 MW during
'high head' period (15% permissible overloading). In all, WAPDA's Hydel
generating capability varies between the two extremities of 2414 MW and
6746.0 MW over the cycle of a year.
Statistics
The next page provides information about the salient features of WAPDA
Hydel Stations, their locations, statistical data etc.

Salient Features of Hydel Stations

Station Water Way Units Capacity Installed Date of
(River/Canal) No. of Each Capacity Commissioning
Unit (MW)
(MW)
Tarbela Indus 1~4 175 700 Jul. 1977
(Reservoir) 5~8 175 700 Dec. 1982
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9~10 175 350 Apr. 1985

11~14 432 1728 Feb. 1993
Total 3478
Barotha Indus 1 290 290 Aug. 2003
(D/S Tarbela) 2 290 290 Sep. 2003
3 290 290 Nov. 2003
4 290 290 Jan. 2004
5 290 290 May 2004
Total 3478

Mangla Jhelum 1~4 100 400 Jul. 1977

(Reservoir) 5~6 100 200 Dec. 1982
7~8 100 200 Apr. 1985
9~10 100 200 Feb. 1993
Total 1000
Warsak Kabul 1~4 40.0 160 Jul. 1960
(Reservoir) 5~6 40.0 83 Mar. 1981
Total 243
Chashma Chashma 1~8 23 184 Jun. 2001
(Barrage)
Rasul UJC* 1~2 22.0 22.0 Jul. 1952
Dargai Swat** 1~4 5.0 20.0 Dec.1952
Malakand Swat** 1~3 3.2 9.6 Jul. 1938
4~5 5.0 10.0 Oct. 1952
Total 19.6
Nandipur UCC*** 1~3 4.6 13.8 Mar. 1963
Shadiwal UJC* 1~2 6.75 13.5 Jan. 1961
Chichoki UCC*** 1~3 4.4 13.2 Aug. 1959
Renala LBDC**** 1~5 0.22 1.1 Mar. 1925
K/Garhi Kachkot***** 1~4 4.0 4.0 Feb. 1958
Chitral Ludko 1~2 0.3 0.6 1975
3~4 0.2 0.4 1982
Total 1.0
: Run-of-River (Canal) Projects
* UJC : Upper Jhelum Canal from River Jhelum
** Swat : Swat canal from River Swat
*** UCC : Upper Chenab Canal from River Chenab
Lower Bari Doab Canal from Balloki Headworks on River
**** LBDC :
Ravi
***** Kachkot : Kachkot Canal from River Kurram
Note: 1. Warsak Power Station was basically a storage type station but its reservoir has almost
completely silted up because of high rates of sedimentation in River Kabul. Presently, it is operating
like a Run-of-River Project.
2. Jabban Hydel Power Station has been de-commissioned due to fire incident on 21.11.2006
which will be commissioned again rehabilitation.

Thermal power
A thermal power station is a power plant in which the prime mover is steam
driven. Water is heated, turns into steam and spins a steam turbine which either
 15

drives an electrical generator or does some other work, like ship propulsion.
After it passes through the turbine, the steam is condensed in a condenser and
 16

recycled to where it was heated; this is known as a Rankin cycle.

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The greatest variation in the design of thermal power stations is due to the
different fuel sources. Some prefer to use the term energy center because such
facilities convert forms of heat energy into electrical energy.Wapda's Thermal
Power Generation is mainly based on generation of power from its Steam
Turbo-Generators, Gas Turbines (simple as well as Combined Cycle Units)
installed at different Power Stations located in Sindh, Punjab and Balochistan
provinces. Indigenous Gas & Coal is the main fuel whereas Furnace oil and
HSD are also used as alternative fuel. The total installed capacity is 4664 MW.
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As per Government of Pakistan policy all thermal power generation has been
restructured and four corporatized companies namely Jamshoro Power
Generation Company Limited (GENCO-1) head quarter at Jamshoro district
Dadu near Hyderabad Sindh, Central Power Generation Company Limited
(GENCO-2) head quarter at Guddu district Jacobabad Sindh and Northern
Power Generation Company Limited (GENCO-3) head quarters at
Muzaffargarh and Lakhra Power Generation Company Limited (GENCO-IV)
at Khanote (Sindh) have been formed and registered. Functioning of GENCOs
has commenced.

Structural formation of all four GENCOs is as under:

JPCL CPGCL NPGCL LPGCL

(GENCO-1) (GENCO-2) (GENCO-3) (GENCO-4)
TPS
TPS Jamshoro TPS Guddu FBC Lakhra
Muzaffargarh
GTPS Kotri TPS Quetta NGPS Multan
GTPS Faisalabad
SPS Faisalabad
GTPS Shahdara
CGTM W/Shop
F/Abad

Nuclear power plants

Nuclear power is power (generally electrical) produced from controlled (i.e.,
non-explosive) nuclear reactions. Commercial plants in use to date use
nuclear fission reactions. Electric utility reactors heat water to produce
 19

steam, which is then used to generate electricity. In 2007, 14% of the world's
electricity came from nuclear power, despite concerns about safety and
radioactive waste management. More than 150 naval vessels using nuclear
propulsion have been built.
Nuclear fusion reactions are widely believed to be safer than fission and
appear potentially viable, though technically quite difficult. Fusion power
has been under intense theoretical and experimental investigation for many
years.
Pakistan is the 7th nuclear weapon state and nuclear power. As of 2009, the
nuclear power plants make up to 2.4% share where the electricity made by
fossil fuel are 65.2 % and 33.9% of it from the Hydro power. Pakistan is one
of 3 Nuclear armed states( Israel and India ) that is not a member of the
Nuclear Non-Proliferation Treat. Furthermore Pakistan has two nuclear
reactors of 425 MW power to generate electricity. The third nuclear reactor
will be operation in the spring of 2010. In Pakistan, nuclear power makes a
small contribution to total energy production and requirements, supplying
only 2.34% of the country's electricity. Total generating capacity is 20 Gwe
and in 2006, 98 billion kWh gross was produced, 37% of it from gas, 29%
from oil. The Pakistan Atomic Energy Commission (PAEC) is responsible
for all nuclear energy and research applications in the country

Pakistan Nuclear Power Reactors

MWe Construction Commercial Planned
Location Status
net Start Operation Close
Karachi Completed 125 1966 12/1972 2012
Chashma Completed 300 1993 06/2000
Chashma Under 300 2005 2012
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Construction
2009
Chashma Approved 300 ???
(expected)
2009
Chashma Approved 300 ???
(expected)
Under 2012
Karachi 1000 2008
Construction (expected)
2010
Karachi Proposed 1000 ???
(expected)
Under 2010
Islamabad 1000 2006
Construction (expected)

Coal power generation in Pakistan

Coal is presently world’s fastest growing fuel particularly in the developing

countries. Coal’s importance can be judged from the fact that it provides 26
% of primary energy and 40 % of world electricity supply. Coal has gained
special importance due to growing concerns for energy security prompted by
the abnormal surge in world oil prices to over $120 per barrel of oil,
mounting tensions of the western countries with Iran, interruptions in the
international supply network of gas from Iran and Russia and ongoing stand
off in the Arabian Gulf. Coal offers a solution which is still found in
abundance locally in most parts of the world. World coal consumption is
expected to increase by 74 % from 2004 to 2030. World trade of coal is
expected to increase about 40 %, from 800 million tons in 2007 to 1122
million Tons in 2030. Coal share in world energy consumption is expected
to increase to 28 % by 2030 but its share in power generation is expected to
remain 41 % roughly at the current level. Coal as an indigenously available
resource has a strategic importance and is world’s fastest growing fuel.
Today China is world’s largest producer as well as the biggest consumer of
coal which accounts for 78% of its total energy requirement. Realizing
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importance of coal many countries in other parts of the world have switched
over to coal to meet their energy needs. India, Indonesia, Germany, USA,
Australia and UK are among those countries that have embarked upon new
coal based power plants. USA is world’s second largest user of coal whose
60% requirements for energy are met with coal.
Usage of coal as a source of energy, in the developing countries, has been
down played by powerful multinational oil companies and cartels who do
not wish to see coal as a substitute of oil that they sell. Negative perceptions
about the utility of coal have some how, adversely affected policies of the
countries such as Pakistan. Coal as a fuel had been ranked low on the list of
Pakistan’s development priorities primarily due to concerns about its quality
and requirement for huge upfront capital. Apart from this, in the absence of a
strong political will to promote coal based power projects, foreign investors
have not been supported as much as they ought to be. Quite a few were
forced to withdraw their initiatives after incurring heavy losses. As a result
what we see today is that share of coal in Pakistan’s energy mix is about 5 %
and in power generation even less than 1 %. Pakistan is one of the lucky
countries which are blessed with vast deposits of coal. By increasing the
share of coal in our energy mix we could have conserved more valuable gas,
which is deplete able resource. Unfortunately, we have compromised our
future by relying excessively on natural gas, and are now running the risk of
energy security.
Pakistan’s major known coal reserves are located in the province of Sindh,
specifically in Thar, estimated at 175.5 billion tons which account for the
bulk of Pakistan’s total reserves, estimated at 185 billion tons. Other coal
deposits of significance in Sind are located at Sonda (Jharruk) 5.5 billion
tons and Lakhra (Dadu) 1.33 billion tons. Current estimated value of the
 22

Thar coal deposits is $ 8 trillion and if converted into energy its values
comes to $ 25 trillion. It has the potential to generate 100,000 MW of
electricity for 300 years. Pakistan is 6th largest coal rich country in the
world and the aggregate energy potential of these resources is more than the
combined energy potential of the resources that Saudi Arabia and Iran
possess. Unfortunately there are factors, other than those mentioned above,
that have not supported investor’s initiatives for the exploitation of
Pakistan’s coal resource in the past.
COAL POWER SCHEME
MULTAN, June 14: Wapda (EMC) Director-General Tahir Basharat
Cheema has said the government is planning to set up 5,000-megawatt
power generation facilities using coal as fuel within next few years.
The country’s survival in the energy sector hinged on proper exploitation of
its coal reserves, he said, adding that 184 billion tons of coal reserves were
available in Thar area alone.
Speaking at a ceremony hosted by the Multan Chamber of Commerce and
Industry, he expressed concern over the fact that Pakistan is generating only
0.1 per cent electricity from coal, though its neighbouring countries are
doing well on this front; India generates 55 per cent power and China 74 per
cent.
He said three rental power houses would start generating 1,067 megawatts of
electricity from September, October and November this year, respectively.
The fourth rental power house would start generating 192MW power from
December 2008 at Piran Ghaib power station, Multan. The station would
have another 350MW electricity through a power plant, he added.
The Wapda official said Malakand hydel power generation facility would
start functioning next month to generate 81MW. In addition to rental power
 23

houses, he said, the power generation capacity of some independent power

producers (IPPs) also would be enhanced.
Agreements had been signed with China to establish power plants at
Nandipur and Chichu ki Malian, and tenders had been issued for two
500MW power plants at Dadu and Faisalabad which would be run by gas
and furnace oil. He said an 800MW power plant would be set up at Guddu.
The Muzaffargarh thermal power house, he said, was not generating energy
up to its full potential of 1,350MW. It was generating 1,000MW of
electricity at present which would be enhanced up to the optimal level by
overhauling its turbines
IPPS
The country had been experiencing severe power shortage during eighties
and early nineties. As aresult, load shedding had to be resorted to all over the
country. This adversely affected the national economy. It was not possible
for the Govt. to establish Power Plants in public sector due to shortage of
funds. In order to eliminate power shortage/load shedding in the minimum
possible time, the Government constituted an Energy Task Force in 1993 to
devise a consolidated and comprehensive policy for revamping and
rejuvenating the energy sector. On the recommendations of the Energy Task
Force, the Government announced a “Policy Framework and Package of
Incentives for Private Sector Power Generation Projects” in March 1994 for
a large scale induction of the private sector in power development. The said
Policy offered a fix levelized tariff of US¢ 5.57 / kWh to the prospective
investors (US¢ 6.1 / kWh average for 1-10 years) and a number of other
incentives to attract foreign investment in the power sector.
 24

1292 MW (Net 1200 MW) HUB Power Project the biggest power plant in
the private sector contracted in 1992 started commercial operations in March
1997. Shortly after commissioning disputes arose between GOP / WAPDA
and HUBCO on tariff and other issues. After protracted negotiations, these
were resolved through Settlement Agreement of December 2000 signed by
the GOP, WAPDA and HUBCO. This resulted in a lower tariff entailing a
saving of about 3 billion dollars over 30 years term of the Power Purchase
Agreement.WAPDA also privatized its 1638 MW (Net 1342 MW) Gas
Turbine Power Station, Kot Addu in June 1996 by incorporating it under the
name of KAPCO and selling its 36% shares to International Power of
UK.After extensive correspondence/negotiations with the International
Power, the Power Purchase Agreement and other relevant documents have
been amended, providing inter-alia, reduction in tariff from Cents 5.60 /
kWh to Cents 5.04 / kWh, resulting in a saving of about 1.3 billion dollars to
WAPDA over 25 years term of the Agreement.
Rental Power Projects
During the Government of PM Shaukat Aziz (2006), ECC in its decision of
16th August, 2006 approved 150 MW Rental Power Plants proposal by
WAPDA / NPGCL for installation at Piranghaib, Multan as emergency
measure subject to acceptance of tariff by NEPRA, stipulating that WAPDA
should only rent as much power as is absolutely necessary to be utilized with
high load factor for economic utilization of capacity. The ECC was briefed
by then government that given the urgency to have additional power
capacity before next summer as per WAPDA’s demand projections and the
long gestation period for new plant, renting of plant/plants appears to be the
only short term solution if shortfalls are to be met. Further, as the
 25

commissioning of the new IPPs for which gas has already been allocated
will take 2-3 years, practical arrangements may beworked out with the
Ministry of Petroleum and Natural Resources to utilizethis gas for the rented
plants in the intervening period. The then Planning and Development
Division concurred with the proposal of M/o Water and Power to keep the
momentum of economic growth progressive, and also to meet the high
anticipated power shortages in the country. b. During the Caretaker
Government of PM Mian Muhammad Sommro (15.02.2008), the ECC
approved four Rental Power Plants each of 200-300 MW (combined
capacity 1000-1200MW) as Rental Power Plants in private sector to be
located at Sahiwal, Gakhar, Kotlakhpath, Sialkot, Shikarpur, Jamshoro,
Eminabad & Sheikupura. The ECC advised that the RPPs be arranged for a
period of four years, PEPCO would reevaluate RPPs location sites on the
basis of oil storage space plus transportation and environmental impact.
Secretaries Finance and Water & Power along with MD-PPRA will review
the procurement mechanism and avoid delay in induction of RPPs while
making it PPRA- compliant.

PAKISTAN ELECTRICITY CRISES

The country is facing a huge electric power crisis today. This crisis appears
insurmountable in the near or even long-term future, unless proper
understanding and correct implementation is undertaken on priority
basis. At present total power production capacity in the country is
about 19,500 MW, out of which Hydel Power is only 6,500 MW,
balance of 13,000 MW is thermal either using Natural Gas or Furnace
Oil. Small capacity of 450 MW is Nuclear and only 150 MW is
through coal. Although gas is to be provided for 5800 MW to various
 26

thermal plants, but in actual fact much less gas is being made
available, the deficiency is being filled through furnace oil. It can be
inferred that in the recent past, only furnace oil was used as fuel for
about 9000 MW generation. It is very important to understand the
consequence of the prevailing situation. Current price of furnace oil is
about Rs 49,000 per ton, which amount upto Rs 49/- per kg. On an
average one kg of furnace oil produces 3.8 kWh of electricity. Thus,
the cost of furnace oil for generating one unit of electricity is about Rs
13. On top of this the fixed cost of a thermal plant works out to be
about Rs 3 per unit. Therefore, one unit (kWh) of the electricity
produced by all thermal plants using furnace oil is Rs 16 per unit.
According to WAPDA/IPP agreement, the private power producers
will charge WAPDA the actual fuel cost for which they have a direct
contract with PSO. As we all know that WAPDA tariff charged from
the consumers is about Rs 5 per unit (kWh). The production cost of
furnace oil electricity is Rs 16 per unit, add to it the transmission,
distribution cost (including loses), “the total cost of such electricity
works out to approximately Rs 22 per kWh. The difference between
WAPDA tariff and the furnace oil electricity is Rs17 per kWh.” It is
estimated that the country consumes at least 25 billion units of
electricity produced annually through furnace oil, which amounts to
the total deficit of Rs 425 Billion. If WAPDA has to balance its books
it would require a subsidy of Rs 425 Billion. This deficit is somewhat
reduced due to cheap power produced through hydel energy and
natural gas, but the deficit cannot change substantially, unless bulk of
electricity is produced through hydel energy. Obviously, a deficit of
Rs 300-350 Billion cannot be sustained, the government does not have
 27

resources to pay such a huge subsidy, it is also not feasible to increase

the power tariff very much. Therefore the power crisis is far greater
than what is being perceived. In the absence of extremely heavy
subsidy, WAPDA is delaying payments to IPPs and also to the oil
companies. The result is that IPPs are now producing much less
electricity than their capacity. To any planner, it should be obvious
that the country cannot afford electricity produced through oil.
Indigenous fuels like coal, gas, atomic will have to be developed and
developed quickly. The final solution however lies in depending on
the hydroelectric renewable energy, but unfortunately the narrow
minded bickering on construction of dams has persuaded the planners
to find an easy solution, which we cannot afford any more. Since the
shortage or high price of electricity has severe detrimental effect on
all sectors of economy, the situation calls for concerted short-term,
medium-term and long-term actions to overcome the problem of
energy shortage. Way Forward: In the short-term, the shortages have
to be somehow met. The foremost immediate action which can give
some relief is the conservation of energy. The government has already
announced certain measures like shutting down power on billboards,
hoardings and neon signs. Recently in Lahore supersize televisions
have been installed on important traffic points. In order to keep the
temperature down air conditioners are installed behind these sets. In
spite of government directions, the energy saving measures are not
being implemented. Shops use excessive lights, which can be
conveniently reduced. A suggestion that cities be divided in zones,
and the market on these zones be closed on different days, can also
save peak time energy usage. In order to implement conservation
 28

measures, the nazims, naib nazims should visit the areas and try to
convince and negotiate with the people, shopkeepers etc requesting
them to cooperate in the overall interests. At present the IPPs, and
WAPDA owned thermal plants are averaging about 50 percent plant
factor, which means that they are not being used to their potential
level, 70 to 80 percent plant factor is quite feasible; this would require
better maintenance of such plants. A higher plant factor on these
power stations can provide 20 to 30 percent more energy, which will
circumvent the present shortages to a certain extent. Improving the
plant factor of the existing plants is far more economical then setting
up new plants, although new plants will still be needed. One of the
reasons for low plant factor is that the funds are not made available
for the purchase of oil, solution for this factor will help in short term
increase in energy production. The government has announced that
immediately 1200 MW of additional plants will be set-up. If these
plants will operate on furnace oil, the deficit will further increase. At
present the country has about 28 Trillion cft of recoverable gas
available, the yearly consumption is about 1.2 Trillion cft, which
means that even if gas consumption is increased, the existing
recoverable gas will be sufficient for the next 15 years. Therefore the
additional thermal generation should be based on gas, but in order to
make additional gas available, the gas pressure and its transmission
system will have to be enhanced. The money saved by using gas
instead of furnace oil, should be invested in developing new gas fields
which have already been discovered. Mid and Long Term: The oil
prices are not going to come down drastically, therefore all efforts are
needed to stay away from oil. For thermal plants only Coal and
 29

Natural Gas should be used. Vast deposits of coal exist at Thar, but it
is inconceivable why the mining of this coal has not yet started. There
are a number of new gas fields discovered; but their development has
been put on the back burner, again for some unknown reasons. The
gas purchase agreement with Iran be finalised immediately, even
without India. A large power station using this gas can be installed at
Gwadar, 500 KV transmission lines can bring the power to load
centres. In addition agreement with Kazakistan be persued diligently
for the import of gas. Currently the country loses 29 billion units of
electricity annually due to heavy losses in the system. All efforts must
be genuinely applied to reduce the losses. If losses are reduced by
even 5 percent, the saving will be over 7 Billion rupees. For
hydroelectric projects, the large ones can only be built on the Indus
River, where not only hydroelectricity can be produced, but highly
needed water storage can also be a by-product. Some legitimate
objections on the environment and social impacts of large dams are
there, but solutions for such objections can be satisfactorily found.
The will of the government leaders is needed, with the present
coalition partnership in the centre, matters can be resolved. Experts
from various provinces can get together and put forward a solution for
mitigating the objections. It was due to the clear vision of the
leadership that the Tarbela Dam was constructed, without which
where would we have been today. Similar visionary approach is
needed and needed now. There are a number of other attractive runs
of the river hydel projects which are being offered to the Private
Sector. None of these projects have yet started, because the tariff is
still not finalised. With the huge losses being accumulated in thermal
 30

plants, again it is strange that the hydel projects in the private sector
are not being encouraged. Under the present circumstances, a rational
and market oriented policy has to be adopted, hopefully the present
government will immediately look into this. It is good to know that
the work on Neelum Jhelum Hydro Project (900MW) has started by
WAPDA. The current power crisis is grossly due to very high oil
prices, and the country has to prepare itself at least for the next several
years to somehow cope with it, since no immediate cheaper alternate
solutions are available. It has been a big set back that new Hydel
Projects have not been undertaken, neither the indigenous coal mining
has started, investments in the existing as well as new gas field have
been lacking. The policy orientation needs a drastic modification and
indigenous resource like hydel energy production as well as
development of coal mining and new gas fields should be the top
priority.
RECOMMENDATIONS:
THE FOLLOWING RECOMMENDATIONS MAY SERVE AS FIRST
STEP IN INDICATINGPLANNING FOR HANDLING ENERGY CRISIS
AT VARIOUS LEVELS: A dedicated cell should be formed at government
level under the Planning Commission/Prime Minister Secretariat which
should be responsible for detailed planning of energy requirements, keeping
in view the realistic annual growth. This cell should serve as a think tank
and should comprise specialist engineers and administrative staff.The boss
of this cell should ensure preparation of short term, medium term and long
term plans. The cell should have three sub cells, responsible for monitoring
of studies, detailed planning and designing, award of contracts and finally
implementation of construction within each sub cell.
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The staff should have specialisation in both thermal and hydel projects. It
should operate through monthly meetings to be attended by representatives
of Ministry of Water and Power, PPIB WAPDA and PEPCO. The head of
this cell should be a technically qualified officer and has to be a hard task
master to ensure that every target is met by the scheduled date.
As per the National Power Policy, all the provinces are authorised to set up
their own power plants up to 50 MW. Wapda, again, has done commendable
work in identification of sites in each province. Unfortunately, none of the
provincial governments has made any serious efforts to set up such plants
and contribute towards the hydropower production.
The Government of NWFP can be given some credit in setting up Malakand
III Project of about 80 MW, which will start generation soon. The
Government of Punjab now seems to be keen to play its part in setting up
small hydropower plants on canals. To achieve meaningful results, all
provinces (interested in setting up hydel plants) must have a core set up on
hydropower generation. There should be a separate Secretary of Power
coming from a technical cadre to lead the provincial power cells.
There should be dedicated energy planning cell. The head of this cell again
has to be a specialist. All cases received from WAPDA, PEPCO in the shape
of PCII and PC1 should be processed immediately. All queries be resolved
through meetings rather through letters which takes months to get upto date
reply. The detailed organization can be worked out at the Ministry.
The Private Power Infrastructure Board, which is almost non-functional with
relation to physical result, is required to be made dynamic. No political
interference should be allowed. The PPIB, through pro-active approach,
should only work on the projects earmarked by the main core cell at
Government level.
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All Letters of Intent issued and agreements signed by PPIB should have cut
off dates for completion of feasibility studies, detailed designing and
commencement of work. No extension of time in any activity be granted.
The present practice is that dummy investors, having political influence, are
coming forward with the sole aim of subletting the project to some other
investor and aiming at making money.
Progress of all agreements be monitored by the central cell and parties
making no progress be given immediate exit. Though WAPDA has already
devised a very comprehensive plan titled as Vision 2025, yet its
implementation is lagging drastically behind schedule. There could be many
reasons for this failure, but the most important being the bidding system.
As per the prevailing practices, only the lowest bid is accepted. Land
acquisition process is time consuming and lacks flexibility. In most of the
cases WAPDA fails to acquire the land required for the projects due to
litigation process. Some projects have been delayed due to non -availability
of material from identified sources as the influential cartels get sources on
lease and later on dictate their terms with the contractor.
The Government of Pakistan/WAPDA should fix the cut off percentage
lower than the engineer estimate beyond which the contractor should be
declared as non responsive. Land acquisition process be started much before
the award of contract so that the land is available by the time the contract has
been awarded.
No quarries site be auctioned and WAPDA should be given basis of all
borrow material quarry site. The contractor in turn will get the required
material from WAPDA quarry sites at much lower rates which will
subsequently reduce the overall cost of the project.
 33

It has also been seen that some contractors abandoning their work on one
project, instead of being put on blacklist and not to be considered for
awarding of further projects, still have been awarded contracts due to outside
pressure. This practice by WAPDA, instead of deterring, has encouraged
other contractors to also adopt the same approach and thus abandon projects
once they feel that they will be undergoing losses.
This vague policy of WAPDA has also contributed in the delay of a couple
of mega projects. It is recommended that any contractor who abandons his
project’s site without any valid justification be blacklisted and should not be
considered for award of future contracts. WAPDA should expedite the
commencement and completion of all projects conceived in Vision 2025.
No time should be wasted on penny-wise, pound-foolish approach, which
presently is the main source of delay in the timely award of contracts.
WAPDA should also carry out analysis of additional cost due to delayed
award and subsequent delayed completion of projects, while undertaking
projects’ bid evaluations and making decisions for re-bidding.
The people responsible for causing delay in the schedule of completion
should be taken to task. There should also be some incentive, both for
contractors and project authorities for the timely completion of projects. It
has remained the policy of the Government to reward some retired
bureaucrats and Government officials and make them the heads of technical
departments, like WAPDA, KESC, and Railways; irrespective of their
qualifications.
It is funny to assume that a good administrator would also be equally
efficient in a technical department. A non-technical boss will always look
towards his immediate subordinates, being totally unaware of the technical
implications.
 34

It is high time that people sitting at the helm of affairs should realize the
ground realities and post technically qualified, capable and competent
officers as heads of technical departments. If it is inevitable to reward non-
technical, retired officers there are hundreds of non-technical slots both at
the provincial and federal levels.
It is time that our leaders realize this very important aspect and stop posting
non-technical officers as heads of technical departments. To conclude, it has
gone beyond doubt that Government of Pakistan has miserably failed to
cater for energy needs of the country. The concerned people have to make
serious efforts to bridge the gap between demand and availability.
This is only possible if all players responsible for initiation and completion
of power projects work in harmony and sincerely at each end and if our
leaders stop posting non-technical men in technical departments as bosses.
WIND TURBINE
A wind turbine is a rotating machine which converts the kinetic energy of
wind into mechanical energy. If the mechanical energy is used directly by
 35

machinery, such as a pump

or grinding stones, the machine is usually called a windmill. If the

mechanical energy is instead converted to electricity, the machine is called a
wind generator, wind turbine, wind power unit (WPU), wind energy
converter (WEC), or aero generator.

Geothermal power
 36

Geothermal is power extracted from heat stored in the earth. This

geothermal energy originates from the original formation of the planet, from
radioactive decay of minerals, and from solar energy absorbed at the surface.
It has been used for bathing since Paleolithic times and for space heating
since ancient Roman times, but is now better known for generating
electricity. Worldwide, geothermal plants have the capacity to generate
about 10 gig watts of electricity as of 2007, and in practice supply 0.3% of
global electricity demand. An additional 28 gigawatts of direct geothermal
heating capacity is installed for district heating, space heating, spas,
industrial processes, desalination and agricultural applications.

Geothermal power is cost effective, reliable, sustainable, and

environmentally friendly, but has historically been limited to areas near
tectonic plate boundaries. Recent technological advances have dramatically
expanded the range and size of viable resources, especially for applications
 37

such as home heating, opening a potential for widespread exploitation.

Geothermal wells release greenhouse gases trapped deep within the earth,
but these emissions are much lower per energy unit than those of fossil fuels.
As a result, geothermal power has the potential to help mitigate global
warming if widely deployed in place of fossil fuels.

CRIDITS
 38

1. www.wapda.gov.pk
2. www.pepco.gov.pk
3. http://en.wikipedia.org
4. www.opfblog.com
5. A talk to MD PEPCO Tahir Basharat Cheema
Mony Plus October 19.2009
6. www.pakistaniat.com
7. www.kropla.com
8. www.thecurrentaffairs.com
9. Ministry of Water and Power, Government of Pakistan
10. Private Power Infrastructure Board, Government of Pakistan
11. PowerSave.pk Awareness Campaign by PEPCO
12.
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