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Energy situation in Pakistan: options and issues
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Pergamon 0960-1481(94) 00071-9
RenewableEnergy,Vol. 6, No. 2, pp. 151 157,1995 ElsevierScienceLtd Printed in Great Britain 0960-1481/95$9.50+ 0.00
DATA BANK Energy situationin Pakistan: options and issues MOHAMMED
G. D O U G G A R
David Livingstone Institute, Faculty of Engineering, University of Strathclyde, Glasgow G1 IXQ, U.K.
(Received 28 June 1994 ; accepted 3 August 1994) Abstract--Pakistan is suffering badly from energy shortages. The indigenous energy sources are poor, and the country is heavily dependent on the import o f fossil fuels from abroad. Economic growth requires adequate energy supplies. Pakistan has rudimentary industrial capacity and will accordingly need large inputs of energy for take-off. In view of the limited energy-resource potential of the country, the provision of assured supplies of energy in the future will not be an easy task. Because of the lack of energy supplies, the process of economic development and industrialization has been retarded, in particular in the rural sector. M a n y options are available to obtain a sustainable and self-reliant energy future. Important options are introducing efficient energy utilization and conservation programmes, exploring and developing domestic fossil fuels, and introducing renewable/alternative energy sources. These measures would reduce the energy demand pressure on the one hand, and also increase the supply of energy on the other.
villages, which are heavily dependent on the use of noncommercial energy resources for domestic and other energy needs. Their main sources of energy for domestic use are wood and cow dung, which are, however, inefficient (5-10%) compared with commercial energy sources (30-450%). The proportion of the total rural population with access to electricity is less than 16% as against 84% for the urban population. Tables 1 and 2 illustrate the per capita commercial energy consumption and percentage share of each energy source for various years. The pattern of commercial energy supply and consumption in Pakistan has undergone considerable changes during the last four decades. As shown in Table 2, oil and coal were the major sources of energy until the discovery o f gas at Sui Station in 1955. In 1950-1951, 0.6 M T O E of coal were consumed, which increased to 1.98 M T O E (by a factor of 3.25) in 1989-1990, but overall its share dropped from 44% to 6% (1989-1990). After the discovery of gas reserves, the share of gas in total commercial energy consumption increased rapidly. In 1960-1961, 20.3 % of total commercial energy demand was met by gas which increased to 43.5% in 1980-1981 and then slightly declined to 39.1% in 19891990. Gas has been substituted for other energy resources,
1. I N T R O D U C T I O N Pakistan is today beset with serious energy supply difficulties due to rapid increase in demand, poor endowment o f energy resources, high costs of energy imports, expanding industrialization and high population growth rate. The heavy population growth has resulted in increased demand for housing and electricity. The rural sector, which comprises 70% of the total population, is dependent on the use of noncommercial energy resources. The infrastructure of industry, agriculture, transport, roads and the construction of buildings needs to be improved and requires a supply of energy to accelerate the development process. Agriculture, being the largest sector of Pakistan's economy, needs more assured supplies of energy and better energy inputs to attain self-sufficiency in food and to generate more foreign earnings through exports. The rural population has only marginal access to electricity for lighting, water heating and cooking. Poor energy supplies constrain productivity growth in the agricultural sector. This paper presents the energy situation in Pakistan and identifies the scale of the energy deficit problem. Finally, the paper discusses various options to meet energy d e m a n d from different energy resources.
Table 1. Per capita consumption of primary commercial energy and electricity
2. T H E E N E R G Y S I T U A T I O N IN P A K I S T A N The level of primary energy consumption in Pakistan is very low. The present per capita commercial energy consumption is around 0.25 T O E and per capita electricity consumption is 350 k W h . This corresponds to about half the average for developing countries, one-seventh of the world average and one-twentieth of the average for the industrialized developed countries [5]. The consumption of energy comprises two-thirds in commercial forms and one-third in non-commercial forms. The primary commercial energy consumption a m o u n t s to around 29 M T O E (1989-1990). Over 70% of the population live in
Year 1950-1951 1960-1961 1970-1971 1989-1990
Source: refs [5, 6]. 151
Per capita consumption Commercial energy Electricity (TOE) (kW h) 0.04 0.07 0.12 0.25
7 28 117 350
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Table 2. Primary commercial energy consumption and share of energy sources in Pakistan
Primary commercial energy (MTOE)
1950-1951
1960-1961
1970-1971
1980-1981
1989 1990
1.41
3.09
7.52
15.19
28.80
0.76 24.60 (11.9) 1.55 50.20 (40.9) 0.63 20.30 0.16 5.00
0.61 8.10 (0.5) 3.42 45.40 (39.3) 2.68 35.60 0.83 10.90
0.912 6.00 (1.4) 5.55 36.50 (33.3) 6.56 43.20 2.152 14.20
1.98 6.90 (2.2) 11.28 39.20 (29.4) 11.28 39.10 4.24 14.70
0.00 0.00
0.00 0.00
0.045 0.30
Share o f energy sources (MTOE) (%)
Coal
Oil
Gas Hydro
Nuclear
0.61 43.50 (28.3) 0.76 54.30 (47.1) 0.00 0.00 0.031 2.20 (1.3)* 0.00 0.00
0.086 0.30
Source : refs [1, 5, 6]. Note : figures in parentheses represent share of imported fuels in total commercial energy. * Shows electricity imported from
India.
especially coal, with the pricing policy adopted favouring gas consumption as a source of energy for the industrial sector. The objective of the policy bias in favour of industry as against the household sector was to increase productivity and output. Oil constitutes a major share of total energy consumption in Pakistan. The utilization of oil has increased from 0.765 M T O E in 1950 1951 to 11.29 M T O E i n 1989 1990, by a factor of 15. The share of imported oil in total commercial energy consumption was 47% (in 1950 1951), and declined to 29.4% (in 1989 1990). This reflects the fact that the indigenous oil resources have been utilized and explored increasingly. At present 75% of total oil requirements are imported from abroad. Exploration of oil was carried out on a large scale during the Sixth and Seventh Five Year Plans [3, 71. A huge a m o u n t of foreign currency is spent on the import of oil every year. Table 3 shows the expenditure on oil imports since 1971. The oil import bill increased to US$1710 million in 1981 1982, peaking at 69% of export earnings, as a result of increased consumption of oil in the country and the oil price rise. Thereafter, because of increased domestic oil potential and exploration work and the fall in oil price, the import bill has declined, but still oil import acts as a major constraint on the economic growth of Pakistan, claiming 20% of its export earnings. The share of primary sources of electricity increased from 2.2% (1950-1951) to 15%(1989 1990). This has been possible as a result of massive construction of hydro-power dams, especially the two large dams at Mangla and Tarbela. T h r o u g h recourse to indigenous energy resources -hydro and gas -Pakistan succeeded in reducing its energy import dependence from 80% (in the 1950s) to 32% (in 1989-1990) [5]. The share of nuclear energy has been negligible (0.3%) in the total primary commercial energy consumption. The generation of nuclear electricity started after the commissioning of 137 M W capacity nuclear power plant ( K A N N U P ) at Karachi in 1971. The plant has generated over one billion k W h since 1971. The government has plan-
ned more thermal electricity plants and mini-hydel schemes to promote electricity supply in the country. Table 4 shows energy consumption by sector for the period 1983-1984 to 1988--1989. The industrial sector has the highest share of commercial energy consumption. On average, a 6.76% annual growth rate in the consumption of energy was observed by the industrial sector during the period 1983 1989. The transport and power sectors rank second in energy consumption. The domestic sector consumed about 4.4 M T O E in 1988 1989 compared with 2.6 M T O E in 1983 -~ 1984. The agricultural sector consumed 1.35 M T O E in 19881989 and an average annual growth rate of 10.61% was observed over the period. Oil and electricity are the main energy sources utilized in the agricultural sector. Transport, industrial and household sectors are the main energyconsuming sectors in Pakistan. These sectors have expanded considerably since independence. Agriculture consumes around 6% of total energy, and lags behind, though the mechanization process progressed well after 1975. In fact, the majority of farmers do not have access to energy supplies and also the farmers do not have enough financial resources or facilities to introduce modern technology. Very few farms have electricity supplies in the Punjab and Sindh Provinces [8]. Land-utilization statistics show that out of 79.61 million hectares, 20.4 million hectares are cultivated. Aridity prevails over much of the country. 51% of land is still unproductive because of non-availability of irrigation water, thus requiring energy to p u m p out underground water. Water-logging and salinity are also posing a problem to agricultural development. A r o u n d 13% of total cultivable land has a water table below 1.52 m and is declared a disaster area [7]. Increased mechanization and more tubewell installation would demand extra energy resources. It has been estimated that around 3 M T O E energy would be required to meet the energy demand in agriculture from the existing cultivated area by the year 2000. If the remaining 51% of area is to be brought under cultivation with tubewell irrigation, the energy requirements would be far higher than this. Therefore energy
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Table 3. Import of oil and POL products
Fiscal year
Oil imports (MTOE)
Oil import bill (US$ million)
Percent of export earnings
1971 1973 1973-1974 1974~1975 1975 1976 197(~1977 1977 1978 1978 1979 1979 1980 1980 1981 1981 1982 1982 1983 1983 1984 1984-1985 1985-1986 1986-1987 1987-1988 1988--1989
3.7 4.1 4.0 4.0 4.1 4.7 5.1 5.6 5.8 6.2 6.3 6.7 6.5 6.5 7.1 7.6 7.9
62 152 337 378 413 497 530 1079 1535 1710 1616 1421 1435 1039 814 981 961
8 15 33 33 36 38 31 46 52 69 60 51 57 34 22 22 20
Source: refs [1, 5, 6].
Table 4(a). Energy consumption by sector (unit : TOE)
Sector
1983 1984
1984 1985
1985 1986
1986 1987
1987-1988
1988-1989
A.C.G.R. (%) 1983-1984 to 1988 1989
Domestic Commercial Industrial Agriculture Transport* Fertilizert Other government+ Sub-total Power Grant total
2,597,957 537,779 4,836,313 814,435 3,179,644 758,491 1,042,628 13,767,247 2,592,110 16,359,365
2,918,245 585,304 5.195,893 891.137 3,357,539 771,668 1,133,909 14,853,695 2,995,064 17,848,759
3,274,396 614,160 5,542,245 942,988 3,587,583 771.945 1,158,304 15,891.621 8,148.095 19,039,716
3,661,757 665,811 5,994,102 1,076,525 4,122,889 799,265 702,523 17,022,872 3,728,106 20,760,978
3,991,186 720,245 6,509,006 1,395,054 4,404,964 795,287 783,137 18,598,879 4,638,139 23,237,018
4,398,196 745,275 6,707,772 1,348,241 4,579,694 804,711 880,571 19,464,460 4,873,460 24,337,920
11.10 6.74 6.76 10.61 7.57 1.19 -3.32 7.17 13.46 8.27
Power: power represents fuels consumed for thermal generation. Electricity in turn is also reflected in other sectors. *Also includes railway traction. *Excluding feed stock of 60% of total gas supply to fertilizer industry. +Excluding KESC Sales to W A P D A from 1986 to 1987. Note: high speed diesel (HSD) consumption in the agricultural sector is not available and is included under "'Transport sector". Agriculture sector represents light diesel oil only. Source: ref. [4].
Table 4(b). Energy consumption in the agricultural sector (unit : TOE)
Source Oil Electricity Total A.G.R. (%)
1983 1984
1984~1985
1985-1986
1986-1987
1987 1988
1988-1989
A.C.G.R. (%)1983 1984 to 1988 1989
178,261 636,174 814,435 0.00
225,213 665,924 891,137 9.42
252,788 690,200 942,988 5.82
250,427 826,098 1,076,525 14.16
344,284 1,050,770 1,395,054 29.59
306,039 1,042,202 1,348,241 3.36
11.42 10,38 10,61 --
Note : high speed diesel (HSD) consumption in the agricultural sector is not available and is included under "'Transport sector.'" Agriculture sector represents light diesel oil only. Source : ref. [4].
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Data Bank
shortage is posing a real problem to Pakistan's agricultural development. 3. F U T U R E ENERGY D E M A N D
Table 5 shows the projected energy demand for the year 2002-2003. As shown in the table, the requirement of petroleum and oil (POL) is projected to increase by a factor of 3.7 over the period 1988-2003. If domestic crude-oil production is increased four-fold from 2.2 to 8.4 M T O E , there would still be a large gap between oil demand and domestic supply. The demand for crude oil is projected to increase from 5.8 (198%1988) to 23.3 M T O E (2003). Thus the import of crude oil is forecast to reach over 13.2 M T O E (in 2003) and there would need to be a four-fold expansion in the existing refining capacity. Given an average growth rate of 6.1% per year (1988 2003), total commercial energy consumption would be 68.5 M T O E in 2003 as against 28.2 M T O E in 1987-1988. Pakistan will be consuming 2.4 times as m u c h energy as in 1987-1988. At present, electricity generating capacity has reached 7200 M W [4]. The projected growth rates for electricity consumption during the periods 1988-2000 and 2000-2010 are 8.9% and 7.7%, respectively [6]. Estimates show that, by the year 2000, peak demand (Table 6) will be 17,000 M W and the power capacity requirement will be around 20,000 M W .
By the year 2010, the power capacity will be around 40,000 M W . On the other hand, if the planned hydro projects under construction are completed on schedule, hydro capacity will be 9000 M W in 2000 and 15,000 M W in 2010. An additional 8000 M W in 2000 and 25,000 M W in 2010 would be required. The rural population is spread in remote villages which lack basic facilities. More than 50% of villages are unelectrifled. Heavy population growth (3.0% now, 2.5% projected in 2000) puts an extra burden on the economy, especially on the domestic energy sector. At a 2.5% growth rate and a rural/urban migration rate of 3.4% per a n n u m , it is expected that the urban population will almost double to reach 61 million (or more) by 2000-2003. Consequently, there will be more demand for urban housing expansion and for more energy to meet domestic needs. The poor energy supplies to the rural sector have negative implications for on-farm activities and the standard of living of rural people. Around 25,400 tractors are being introduced every year into the agricultural sector and 3000 tubewells were to be installed by 1993 as a remedy to water logging and salinity problems [2]. All this creates an energy demand pressure which could be met through the import of oil. It has been estimated that, if all the possible activities in the agricultural sector were to be mechanized by 2010, including drying and storage, growth in consumption of commercial energy would inevitably be m u c h higher than that projected for the year 2000-2010.
Table 5. Energy supply by source (MTOE) A n n u a l growth rate
Gas Hydro Nuclear Coal POL Others Commercial Non-commercial Total
1987-1988
1992-1993
2002-1903
(%)
9.1 3.2 0.1 2.3 9.9 -24.6 11.5 36.1
15.20 3.7 0.1 3.6 15.00 -37.6 13.7 51.3
15.9 10.00 1.80 19.3 36.5 0.7 84.2 14.8 99.0
3.8 7.9 21.3 15.2 9.1 -8.5 1.6 6.7
Source: ref. [7].
Table 6. Projections of peak demand and capacity requirements (MW) Projections by Pakistan Atomic Energy Commission (PAEC)
Projections by W A P D A
Low conservation scenario
Medium conservation scenario
Year
Peak demand
Capacity requirements
Peak demand
Capacity requirements
Peak demand
Capacity requirements
1995 2000 2005 2010
11,214 17,137 25,056 35,388
13,457 20,567 30,067 42,466
10,149 16,036 23,440 33,849
10,725 19,240 28,130 40,620
10,149 15,040 21,717 30,905
12,180 18,050 26,060 37,090
Source: ref. [6]. Note : the capacity requirements have been worked out here from the listed peak demand values, assuming reserves margin
of 20%.
Data Bank 4. P O T E N T I A L O F I N D I G E N O U S E N E R G Y RESOURCES The proven fossil fuel reserves of Pakistan in 1989-1990 are estimated as [5, 6] : Gas : Oil : Coal: Total :
26 T C F (Sui equivalent) = 530 million T O E 225 million barrels = 30 million TOE 490 million tons = 163 million TOE = 723 million TOE
How meagre these reserves are can be judged from the fact that if these alone were to meet the entire commercial-energy demand of the country, they would all be exhausted completely within a matter of the next 10 years. The oil reserves would disappear within 2-3 years at an annual consumption growth rate of 10% without any import. Similarly the gas reserves would not last more than 18 years at an annual consumption growth rate of 10.6%. The sedimentary area (including the off-shore region) is estimated at over 800,000 k m 2 which offers promise of a large petroleum resource potential. However, the exploratory drilling effort has been extremely low, hardly 0.3 wells per 1000 km 2 of prospective a r e a - - a s compared to more than 100 wells per 1000 km ~-in industrialized countries and over 5 in India. Pakistan has an identified hydro-power potential of about 27,000 M W of which 3000 M W has already been developed, while an additional 6000 M W is under development or in advanced planning stages [6]. There will be considerable difficulties in further expansion of hydro-power because the most attractive sites will already have been developed. The cost of construction of new d a m s at remote sites, compounded by huge additional investment in transmission lines and concomitant losses, make it unrealistic to expect that m u c h more than half of the remaining hydro potential in the country will ever be exploited. 5. I N V E S T M E N T O P T I O N S : R O L E O F P R I V A T E SECTOR
In order to increase self reliance in energy, the energy sector has been receiving increased emphasis in national development since the 1970s. Energy sector investments corresponded to about 15% of the total public sector development expenditure in the early 1970s. This share has substantially increased over the last 15 years : to 25.4 and 31.7% during the fifth and sixth Five Year Plan periods (1978-1983, 1983-1988), respectively, and is planned to reach a level of 35,5% under the current seventh Five Year Plan. The share of the power sector in the total development expenditure also increased from 18.4% during the Fifth Plan period to 21.8% during the sixth plan period, and is now expected to increase further to 25.8% during the seventh plan period [3, 7, 5]. This increasingly high emphasis is a consequence of the basic strategy embodied in the sixth and seventh plans, calling for a sharp increase in the allocation for the power sector in order to achieve the twin objectives o f reduction in load shedding and rapid electrification o f rural areas. The share of the fuel sector, i.e. the energy sector minus the power sector (almost 95% o f which is accounted for by oil and gas) in total public sector development expenditure also increased from 7.0% during the fifth plan to 9.9% during the sixth plan period : it is stipulated to be 9.7°/0 in the seventh plan allocations, when it will a m o u n t to about $400 million invest-
155
ment per year on average. A marked increase has been noticed in oil exploration activity recently: l0 concessions have been granted over the last two years, mostly to the foreign private sector, envisaging the investment of risk capital of about $150 million over the next 2-3 years. New incentives now being offered by the government for foreign private investment in oil and gas exploration and development is expected to increase this activity further. The seventh plan puts heavy emphasis on promotion of private-sector activity through further deregulation of the economy, in order to transfer some of the financial burden from the government's budgetary resources to the private sector's own resources. Accordingly, it is envisaged that the share of the private sector in total fixed investment during the seventh plan period will be 44.5% as compared to 41.2% during the sixth plan period. Within the energy sector, the share of the privatesector investments in total energy-sector investments is expected to increase from about 12% during the sixth plan to about 21% during the current Plan period. Further, in addition to its participation in traditional areas related to production, transportation, and distribution of oil, gas and coal, the private sector is being involved for the first time in power-generation activities. To promote private-sector investment in power generation, a private-sector fund of about US$600 million has been created to provide loans to potential investors of up to 60% of the project cost [5,6]. Resources for this fund have been contributed by the World Bank, USA1D, and other bilateral and multilateral agencies. To achieve this level of private investment in the power sector, the Government is offering a number of incentives. An 18% return on equity is being allowed, corporate tax has been waived for the sponsors, foreign lenders have been exempted from tax on profits arising out of loans ; and, in some cases customs duties have also been waived. Initially, the private sector was restricted to thermal power plants based on oil and indigenous coal. Subsequently, the policy was extended to include thermal power stations using lowcalorific-value gas and imported coal and also hydroelectric stations. In principle, the government will give consideration to the use of any fuel for power generation having regard to both economy and diversity. The response from the private sector has been very encouraging, and a n u m b e r of power projects in the private sector, corresponding to a total capacity of some 5000 M W , are now under consideration. The government has created a Private Power Cell in the Ministry of Water and Power, for speedy negotiation and implementation of these projects.
6. E N E R G Y C O N S E R V A T I O N A N D EFFICIENCY I M P R O V E M E N T PROGRAMMES In 1986, Pakistan took a major initiative in this respect by establishing E N E R C O N , the National Energy Conservation Centre which is responsible for the planning and coordination of activities related to energy conservation and improvement of energy efficiency in all sectors of the national economy. The main thrust of E N E R C O N ' s effort is directed towards providing technical support to various energy consumers, manufacturers, public agencies etc. in the form of energy audits, demonstration programmes, feasibility studies or simply expert advice on energy conservation. The specific measures envisaged in different sectors of consumption are as follows.
Industry--O)
technical services comprising (a) boiler/
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156
furnace tune-up (b) steam system survey and (c) electricalsystem survey, each leading to an average efficiency improvement of 5 8% : (2) demonstration project to illustrate energy savings attainable through the use of electronic-combustionanalysis technology, waste-heat-recovery systems, burner control systems, energy accounting systems etc. Buildings --(1) retrofitting of existing buildings; (2) improving the design of new buildings. In this respect, a National Energy Conservation Building Code, which includes recommended specifications, both for the design of buildings and for the use of equipment to heat, cool and light the buildings has been approved by the government for adoption on a voluntary basis. A qriculture--(l) retrofitting of tubewells, (a) efficiency improvement of tractors through dissemination of proper information to the farmers. Transport (1) auto-engine tune-ups with the help of electronic engine analysers ; (2) use of CNS as a motor fuel. P o w e ~ ( l ) reduction of transmission and distribution losses through the rehabilitation of equipment and improved load management measures, (2) appropriate tariff and nontariff measures leading to overall energy conservation in the power sector and reduction of peak demand.
7. E N V I R O N M E N T A L ISSUES
irreversible. Studies [10] show that chronic bronchitis results from poor indoor-air quality. Such health hazards are likely to exist in Pakistan, where food is usually cooked indoors in an open-fire wood stove. The major impact of hydroelectric generation is on the land needed to establish the reservoir, and on the supply of water and sediment downstream. Hydroelectric generation produces no atmospheric pollution. Part of the petroleum products used is refined in Pakistan, which increases atmospheric pollution from their extraction and processing. The combustion of fuel in cities is a major source of increase in carbon dioxide emission because of the heavy volume of traffic in Pakistan. The coal mines also add pollutants to the atmosphere. The coal in Pakistan is not of high quality and it has a high ash content which may increase the particle emission into the air. In view of the low per capita energy consumption in Pakistan, it seems that Pakistan is not a significant contributor to global CO2 emission. Therefore the environmental problems are arguably of less significance to the policy makers in Pakistan than elsewhere. Further, the country's immediate concern is to provide adequate energy to meet its socioeconomic development requirements and to achieve selfsufficiency in energy. Thus the country has to utilize the full potential of indigenous energy sources. However, efforts are underway to develop and introduce renewable-energy technologies which are environmentally safe. But renewables are not immediate alternatives to coramercial energy sources.
The major energy-related environmental concerns in Pakistan are as follows. (1) Degradation of the environment in major cities due to increasing emission of polluting substances (SO2, NO> CO etc.) from large industries, transport vehicles etc. (2) Use of outdated technology and lack of pollution control devices in major energy consuming facilities. (3) General adverse environmental impact due to large hydro dams, e.g. submergence of land associated with dislocation of population. (4) Deforestation and loss o f soil fertility due to largescale use of fuelwood and other commercial fuels. (5) Coastal pollution around port areas due to increasing oil leakages from ships and tankers. (6) Environmental degradation likely to result from the expected large-scale future use of indigenous poor quality coal with high sulphur content. The increase in the a m o u n t of carbon dioxide in the atmosphere is a major global concern. Carbon dioxide is produced when fossil fuels and biomass are burned. However it is important to realize that biomass used sustainably is not a net source of carbon dioxide, since carbon is fixed in the new plant growth at the same rate as by combustion. There is not any specific data available in Pakistan on emission of CO2 from commercial energy resources and from biomass. However, there is ample evidence that deforestation is occurring in parts of Pakistan. One study shows [9] that excess demand for fuelwood is the main cause of this. Land clearance to provide homestead sites, arable plots, and overgrazing by the large number of cattle are other major causes. Further, because of the high population growth rate, without sufficient commercial energy resources, demand for fuelwood will increase in future, and stock of accessible wood could be reduced drastically. Deforestation causes long-term damage to the environment as well as immediate h u m a n problems, by exacerbating soil erosion and its attendant problems. This damage is always expensive to repair and in many cases
8. S T R A T E G Y FOR S O L V I N G ENERGY DEFICIT P R O B L E M S AND M E E T I N G F U T U R E ENERGY DEMAND A question arising from energy demand analysis for Pakistan is : how will the country meet its future energy demand and cover its energy deficit now? There are several options with varying investment requirements. Consider, for instance, a strategy involving the following features : (1) utilization (and exploration) of domestic fossil-fuel reserves : (2) conservation of energy--eliminating losses in utilization of energy ; (3) use of alternative energy sources (solar energy, biomass), Fuelwood is a major source of energy to the people and it meets 60% of total energy demand of the rural sector [9]. Because of the deforestation problem, people in hilly areas of Pakistan where there are not significant number of trees and plantations, are facing a problem of wood scarcity. People have to travel away from their own the villages to collect wood and crop residues. There is an urgent need to address the problem. The general supply-and-demand approach must be used by: (1) reducing the rate of population growth ; (2) using wood more efficiently ; and (3) increasing the supply of wood. However, this is not a good solution to the problem. An efficient strategy would substitute noncommercial fuels with efficient commercial or alternative energy technologies, therefore emphasizing the increased use of commercial energy sources. Energy-conservation techniques should also be adopted, for which strong regulatory measures need to be framed. Some steps have been taken in this respect during 1986 but they are not adequate. Energy-efficiency measures should be
Data Bank enforced in buildings, transport, and in the domestic and agricultural sectors. For example, a major use of petroleum products is in the transport sector, It has been estimated that 10% savings in fuel consumption could be achieved by introducing guidelines for efficient utilization of fuel in this sector [10]. There will be a gradual reduction in fuel demand if old stock is replaced with more fuel-efficient vehicles. Electricity is a major component of increased energy demand in the household, industrial and commercial sectors. The major source for generating electricity is hydro. It has been estimated that 25% of electricity is lost from the point of generation to consumption. These losses could easily be eliminated by introducing technical measures [11]. The demand for electricity could also be reduced by better management. There is now clear evidence fi'om the developed countries [10] that it is often cheaper to reduce the energy demand by introducing energy-efficient appliances, than to increase the supply. Similar steps should be taken in agriculture, industry, cmnmerce, and in the domestic and public sectors. After the energy-conservation measures have been taken. the supplies from domestic energy resources could be increased by taking the following measures. • Hydro-power is a non-polluting renewable energy resource ; its potential could be developed as last as possible from the socio-economic and technological point of view. Small hydro plants could be installed on a large scale on rivers and canals to meet the local energy demand. These plants are found to be economically viable in China and other developing countries, especially when local materials and labour have been used for construction of these small plants. • In view of the large size of the presumed petroleum reserves, the exploratory effort may be intensified in the short to medium term future (5 10 years). The strategy for further development work in this field should be formulated in the light of medium-term experience. New oil fields could be explored by introducing advanced technologies. • Because of their poor quality, the coal reserves of Pakistan have not been put to proper use. Advanced technology could be used, however, to make use of the coal found in Pakistan. • In order to reduce the Mad on imported fossil fuels (oil), nuclear technology could be utilized within the next 5 10 years, provided the application of the technology is economically viable. • A gradual switch over from fossil fuels to renewable energy technologies would be the most feasible step to meet the long-term energy requirements of the country. In view of the major role these technologies could play in meeting the worldwide energy requirements, it is desirable that R & D efforts on the development of the most promising of these technologies for large scale deployment, in particular solar thermal and photovoltaics, are pursued vigorously. Renewable energy technologies such as biogas, windmills, and the use of solar technology in crop drying, cooling and ventilation of buildings could play a useful role in
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improving the energy supply situation. It is well-established that PV is cost-effective with diesel and hydro power in m a n y applications. 9. C O N C L U S I O N S Pakistan is facing a serious energy-deficit problem. The country is heavily dependent on import of fossil fuels from abroad. This trend is likely to continue in the near future. The rural sector does not have access to efficient energy resources at present. In view of the present energy situation and projected demands for energy, it is unlikely that there will be any significant change in the commercial energysupply situation in the rural sector. Wood will continue to play a dominant role in the overall supply of hydrocarbon energy to the rural sector. Renewable energy technologies need to be developed and introduced in the country. The energy demand could also be decreased by adopting energy-efficiency and conservation measures. Without alternative energy sources and improvemerits in energy utilization and conservation measures, Pakistan will become more and more dependent on the import of oil. Acknowledgements--The author is grateful to Dr Girma Zawdie at the David Livingstmae Institute, and Professor Chmies-Ross (Energy and Environment) at Strathclyde University, for encouragement to write this paper. The author is also grateful to Ms Fiona MacDonald for typing this material. REFERENCES
1. Economic Survey o/l Pakistan 1990 1991. Government of Pakistan, Islamabad. 2. Ayricuhural Statistics q f Pakislan 1989 1990. Government of Pakistan, lslamabad. 3. SLvth Fire Year Phm 1983 1988, Government of Pakistan, Islamabad. 4. Director-General Renewable Energy Resources. Em,rqy ~k,arhook 1989-1990, lslamabad. 5. M. Jameel and M. Arshad. Pakistan's Energy Future: Issues and Options (PAEC, Islamabad). IVEC-Con/I Enerqy/or Tomorrow's Worhl, New Delhi, India ( 1991 ). 6. M. K. Arshad, A. I. Jalal and G. R. Athar, Possible role of hydro resources in Pakistan. Rey/iona/ Seminar o, Energy Policies am/ Sll'at~Wies /~r J4"aler Resources Development in Pakistan. PAEC, lslamabad (1989). 7. Sel'enth Fire }'ear Plan 1988 1993 and Pro.Vwclive Phm 1988 2003. Government of Pakistan, lslamabad. 8. Energ)" Supply Situation at Farms in PakiszaH 1992. Survey conducted by the author. 9. M. Shaffi-ullah, Ellerq)" Problems ill the Rural Sector ()/ Pak{s'tan Sto'l'et'. Department of Geography, lslalnabad, Pakistan (1992). 10. A. E. Wheldon, Energy Options for Sustainable Development in Swaziland. J. R E R I ( ' Em'rgy 13 (1) (I 991). 1 I. A. R. Saeed, Pakislatl ~' Eneryy Policy Towards a New Strategy. Institute of Policy Studies, lslamabad (1983).
Pergamon 0960-1481(94) 00071-9
RenewableEnergy,Vol. 6, No. 2, pp. 151 157,1995 ElsevierScienceLtd Printed in Great Britain 0960-1481/95$9.50+ 0.00
DATA BANK Energy situationin Pakistan: options and issues MOHAMMED
G. D O U G G A R
David Livingstone Institute, Faculty of Engineering, University of Strathclyde, Glasgow G1 IXQ, U.K.
(Received 28 June 1994 ; accepted 3 August 1994) Abstract--Pakistan is suffering badly from energy shortages. The indigenous energy sources are poor, and the country is heavily dependent on the import o f fossil fuels from abroad. Economic growth requires adequate energy supplies. Pakistan has rudimentary industrial capacity and will accordingly need large inputs of energy for take-off. In view of the limited energy-resource potential of the country, the provision of assured supplies of energy in the future will not be an easy task. Because of the lack of energy supplies, the process of economic development and industrialization has been retarded, in particular in the rural sector. M a n y options are available to obtain a sustainable and self-reliant energy future. Important options are introducing efficient energy utilization and conservation programmes, exploring and developing domestic fossil fuels, and introducing renewable/alternative energy sources. These measures would reduce the energy demand pressure on the one hand, and also increase the supply of energy on the other.
villages, which are heavily dependent on the use of noncommercial energy resources for domestic and other energy needs. Their main sources of energy for domestic use are wood and cow dung, which are, however, inefficient (5-10%) compared with commercial energy sources (30-450%). The proportion of the total rural population with access to electricity is less than 16% as against 84% for the urban population. Tables 1 and 2 illustrate the per capita commercial energy consumption and percentage share of each energy source for various years. The pattern of commercial energy supply and consumption in Pakistan has undergone considerable changes during the last four decades. As shown in Table 2, oil and coal were the major sources of energy until the discovery o f gas at Sui Station in 1955. In 1950-1951, 0.6 M T O E of coal were consumed, which increased to 1.98 M T O E (by a factor of 3.25) in 1989-1990, but overall its share dropped from 44% to 6% (1989-1990). After the discovery of gas reserves, the share of gas in total commercial energy consumption increased rapidly. In 1960-1961, 20.3 % of total commercial energy demand was met by gas which increased to 43.5% in 1980-1981 and then slightly declined to 39.1% in 19891990. Gas has been substituted for other energy resources,
1. I N T R O D U C T I O N Pakistan is today beset with serious energy supply difficulties due to rapid increase in demand, poor endowment o f energy resources, high costs of energy imports, expanding industrialization and high population growth rate. The heavy population growth has resulted in increased demand for housing and electricity. The rural sector, which comprises 70% of the total population, is dependent on the use of noncommercial energy resources. The infrastructure of industry, agriculture, transport, roads and the construction of buildings needs to be improved and requires a supply of energy to accelerate the development process. Agriculture, being the largest sector of Pakistan's economy, needs more assured supplies of energy and better energy inputs to attain self-sufficiency in food and to generate more foreign earnings through exports. The rural population has only marginal access to electricity for lighting, water heating and cooking. Poor energy supplies constrain productivity growth in the agricultural sector. This paper presents the energy situation in Pakistan and identifies the scale of the energy deficit problem. Finally, the paper discusses various options to meet energy d e m a n d from different energy resources.
Table 1. Per capita consumption of primary commercial energy and electricity
2. T H E E N E R G Y S I T U A T I O N IN P A K I S T A N The level of primary energy consumption in Pakistan is very low. The present per capita commercial energy consumption is around 0.25 T O E and per capita electricity consumption is 350 k W h . This corresponds to about half the average for developing countries, one-seventh of the world average and one-twentieth of the average for the industrialized developed countries [5]. The consumption of energy comprises two-thirds in commercial forms and one-third in non-commercial forms. The primary commercial energy consumption a m o u n t s to around 29 M T O E (1989-1990). Over 70% of the population live in
Year 1950-1951 1960-1961 1970-1971 1989-1990
Source: refs [5, 6]. 151
Per capita consumption Commercial energy Electricity (TOE) (kW h) 0.04 0.07 0.12 0.25
7 28 117 350
Data Bank
152
Table 2. Primary commercial energy consumption and share of energy sources in Pakistan
Primary commercial energy (MTOE)
1950-1951
1960-1961
1970-1971
1980-1981
1989 1990
1.41
3.09
7.52
15.19
28.80
0.76 24.60 (11.9) 1.55 50.20 (40.9) 0.63 20.30 0.16 5.00
0.61 8.10 (0.5) 3.42 45.40 (39.3) 2.68 35.60 0.83 10.90
0.912 6.00 (1.4) 5.55 36.50 (33.3) 6.56 43.20 2.152 14.20
1.98 6.90 (2.2) 11.28 39.20 (29.4) 11.28 39.10 4.24 14.70
0.00 0.00
0.00 0.00
0.045 0.30
Share o f energy sources (MTOE) (%)
Coal
Oil
Gas Hydro
Nuclear
0.61 43.50 (28.3) 0.76 54.30 (47.1) 0.00 0.00 0.031 2.20 (1.3)* 0.00 0.00
0.086 0.30
Source : refs [1, 5, 6]. Note : figures in parentheses represent share of imported fuels in total commercial energy. * Shows electricity imported from
India.
especially coal, with the pricing policy adopted favouring gas consumption as a source of energy for the industrial sector. The objective of the policy bias in favour of industry as against the household sector was to increase productivity and output. Oil constitutes a major share of total energy consumption in Pakistan. The utilization of oil has increased from 0.765 M T O E in 1950 1951 to 11.29 M T O E i n 1989 1990, by a factor of 15. The share of imported oil in total commercial energy consumption was 47% (in 1950 1951), and declined to 29.4% (in 1989 1990). This reflects the fact that the indigenous oil resources have been utilized and explored increasingly. At present 75% of total oil requirements are imported from abroad. Exploration of oil was carried out on a large scale during the Sixth and Seventh Five Year Plans [3, 71. A huge a m o u n t of foreign currency is spent on the import of oil every year. Table 3 shows the expenditure on oil imports since 1971. The oil import bill increased to US$1710 million in 1981 1982, peaking at 69% of export earnings, as a result of increased consumption of oil in the country and the oil price rise. Thereafter, because of increased domestic oil potential and exploration work and the fall in oil price, the import bill has declined, but still oil import acts as a major constraint on the economic growth of Pakistan, claiming 20% of its export earnings. The share of primary sources of electricity increased from 2.2% (1950-1951) to 15%(1989 1990). This has been possible as a result of massive construction of hydro-power dams, especially the two large dams at Mangla and Tarbela. T h r o u g h recourse to indigenous energy resources -hydro and gas -Pakistan succeeded in reducing its energy import dependence from 80% (in the 1950s) to 32% (in 1989-1990) [5]. The share of nuclear energy has been negligible (0.3%) in the total primary commercial energy consumption. The generation of nuclear electricity started after the commissioning of 137 M W capacity nuclear power plant ( K A N N U P ) at Karachi in 1971. The plant has generated over one billion k W h since 1971. The government has plan-
ned more thermal electricity plants and mini-hydel schemes to promote electricity supply in the country. Table 4 shows energy consumption by sector for the period 1983-1984 to 1988--1989. The industrial sector has the highest share of commercial energy consumption. On average, a 6.76% annual growth rate in the consumption of energy was observed by the industrial sector during the period 1983 1989. The transport and power sectors rank second in energy consumption. The domestic sector consumed about 4.4 M T O E in 1988 1989 compared with 2.6 M T O E in 1983 -~ 1984. The agricultural sector consumed 1.35 M T O E in 19881989 and an average annual growth rate of 10.61% was observed over the period. Oil and electricity are the main energy sources utilized in the agricultural sector. Transport, industrial and household sectors are the main energyconsuming sectors in Pakistan. These sectors have expanded considerably since independence. Agriculture consumes around 6% of total energy, and lags behind, though the mechanization process progressed well after 1975. In fact, the majority of farmers do not have access to energy supplies and also the farmers do not have enough financial resources or facilities to introduce modern technology. Very few farms have electricity supplies in the Punjab and Sindh Provinces [8]. Land-utilization statistics show that out of 79.61 million hectares, 20.4 million hectares are cultivated. Aridity prevails over much of the country. 51% of land is still unproductive because of non-availability of irrigation water, thus requiring energy to p u m p out underground water. Water-logging and salinity are also posing a problem to agricultural development. A r o u n d 13% of total cultivable land has a water table below 1.52 m and is declared a disaster area [7]. Increased mechanization and more tubewell installation would demand extra energy resources. It has been estimated that around 3 M T O E energy would be required to meet the energy demand in agriculture from the existing cultivated area by the year 2000. If the remaining 51% of area is to be brought under cultivation with tubewell irrigation, the energy requirements would be far higher than this. Therefore energy
Data Bank
153
Table 3. Import of oil and POL products
Fiscal year
Oil imports (MTOE)
Oil import bill (US$ million)
Percent of export earnings
1971 1973 1973-1974 1974~1975 1975 1976 197(~1977 1977 1978 1978 1979 1979 1980 1980 1981 1981 1982 1982 1983 1983 1984 1984-1985 1985-1986 1986-1987 1987-1988 1988--1989
3.7 4.1 4.0 4.0 4.1 4.7 5.1 5.6 5.8 6.2 6.3 6.7 6.5 6.5 7.1 7.6 7.9
62 152 337 378 413 497 530 1079 1535 1710 1616 1421 1435 1039 814 981 961
8 15 33 33 36 38 31 46 52 69 60 51 57 34 22 22 20
Source: refs [1, 5, 6].
Table 4(a). Energy consumption by sector (unit : TOE)
Sector
1983 1984
1984 1985
1985 1986
1986 1987
1987-1988
1988-1989
A.C.G.R. (%) 1983-1984 to 1988 1989
Domestic Commercial Industrial Agriculture Transport* Fertilizert Other government+ Sub-total Power Grant total
2,597,957 537,779 4,836,313 814,435 3,179,644 758,491 1,042,628 13,767,247 2,592,110 16,359,365
2,918,245 585,304 5.195,893 891.137 3,357,539 771,668 1,133,909 14,853,695 2,995,064 17,848,759
3,274,396 614,160 5,542,245 942,988 3,587,583 771.945 1,158,304 15,891.621 8,148.095 19,039,716
3,661,757 665,811 5,994,102 1,076,525 4,122,889 799,265 702,523 17,022,872 3,728,106 20,760,978
3,991,186 720,245 6,509,006 1,395,054 4,404,964 795,287 783,137 18,598,879 4,638,139 23,237,018
4,398,196 745,275 6,707,772 1,348,241 4,579,694 804,711 880,571 19,464,460 4,873,460 24,337,920
11.10 6.74 6.76 10.61 7.57 1.19 -3.32 7.17 13.46 8.27
Power: power represents fuels consumed for thermal generation. Electricity in turn is also reflected in other sectors. *Also includes railway traction. *Excluding feed stock of 60% of total gas supply to fertilizer industry. +Excluding KESC Sales to W A P D A from 1986 to 1987. Note: high speed diesel (HSD) consumption in the agricultural sector is not available and is included under "'Transport sector". Agriculture sector represents light diesel oil only. Source: ref. [4].
Table 4(b). Energy consumption in the agricultural sector (unit : TOE)
Source Oil Electricity Total A.G.R. (%)
1983 1984
1984~1985
1985-1986
1986-1987
1987 1988
1988-1989
A.C.G.R. (%)1983 1984 to 1988 1989
178,261 636,174 814,435 0.00
225,213 665,924 891,137 9.42
252,788 690,200 942,988 5.82
250,427 826,098 1,076,525 14.16
344,284 1,050,770 1,395,054 29.59
306,039 1,042,202 1,348,241 3.36
11.42 10,38 10,61 --
Note : high speed diesel (HSD) consumption in the agricultural sector is not available and is included under "'Transport sector.'" Agriculture sector represents light diesel oil only. Source : ref. [4].
154
Data Bank
shortage is posing a real problem to Pakistan's agricultural development. 3. F U T U R E ENERGY D E M A N D
Table 5 shows the projected energy demand for the year 2002-2003. As shown in the table, the requirement of petroleum and oil (POL) is projected to increase by a factor of 3.7 over the period 1988-2003. If domestic crude-oil production is increased four-fold from 2.2 to 8.4 M T O E , there would still be a large gap between oil demand and domestic supply. The demand for crude oil is projected to increase from 5.8 (198%1988) to 23.3 M T O E (2003). Thus the import of crude oil is forecast to reach over 13.2 M T O E (in 2003) and there would need to be a four-fold expansion in the existing refining capacity. Given an average growth rate of 6.1% per year (1988 2003), total commercial energy consumption would be 68.5 M T O E in 2003 as against 28.2 M T O E in 1987-1988. Pakistan will be consuming 2.4 times as m u c h energy as in 1987-1988. At present, electricity generating capacity has reached 7200 M W [4]. The projected growth rates for electricity consumption during the periods 1988-2000 and 2000-2010 are 8.9% and 7.7%, respectively [6]. Estimates show that, by the year 2000, peak demand (Table 6) will be 17,000 M W and the power capacity requirement will be around 20,000 M W .
By the year 2010, the power capacity will be around 40,000 M W . On the other hand, if the planned hydro projects under construction are completed on schedule, hydro capacity will be 9000 M W in 2000 and 15,000 M W in 2010. An additional 8000 M W in 2000 and 25,000 M W in 2010 would be required. The rural population is spread in remote villages which lack basic facilities. More than 50% of villages are unelectrifled. Heavy population growth (3.0% now, 2.5% projected in 2000) puts an extra burden on the economy, especially on the domestic energy sector. At a 2.5% growth rate and a rural/urban migration rate of 3.4% per a n n u m , it is expected that the urban population will almost double to reach 61 million (or more) by 2000-2003. Consequently, there will be more demand for urban housing expansion and for more energy to meet domestic needs. The poor energy supplies to the rural sector have negative implications for on-farm activities and the standard of living of rural people. Around 25,400 tractors are being introduced every year into the agricultural sector and 3000 tubewells were to be installed by 1993 as a remedy to water logging and salinity problems [2]. All this creates an energy demand pressure which could be met through the import of oil. It has been estimated that, if all the possible activities in the agricultural sector were to be mechanized by 2010, including drying and storage, growth in consumption of commercial energy would inevitably be m u c h higher than that projected for the year 2000-2010.
Table 5. Energy supply by source (MTOE) A n n u a l growth rate
Gas Hydro Nuclear Coal POL Others Commercial Non-commercial Total
1987-1988
1992-1993
2002-1903
(%)
9.1 3.2 0.1 2.3 9.9 -24.6 11.5 36.1
15.20 3.7 0.1 3.6 15.00 -37.6 13.7 51.3
15.9 10.00 1.80 19.3 36.5 0.7 84.2 14.8 99.0
3.8 7.9 21.3 15.2 9.1 -8.5 1.6 6.7
Source: ref. [7].
Table 6. Projections of peak demand and capacity requirements (MW) Projections by Pakistan Atomic Energy Commission (PAEC)
Projections by W A P D A
Low conservation scenario
Medium conservation scenario
Year
Peak demand
Capacity requirements
Peak demand
Capacity requirements
Peak demand
Capacity requirements
1995 2000 2005 2010
11,214 17,137 25,056 35,388
13,457 20,567 30,067 42,466
10,149 16,036 23,440 33,849
10,725 19,240 28,130 40,620
10,149 15,040 21,717 30,905
12,180 18,050 26,060 37,090
Source: ref. [6]. Note : the capacity requirements have been worked out here from the listed peak demand values, assuming reserves margin
of 20%.
Data Bank 4. P O T E N T I A L O F I N D I G E N O U S E N E R G Y RESOURCES The proven fossil fuel reserves of Pakistan in 1989-1990 are estimated as [5, 6] : Gas : Oil : Coal: Total :
26 T C F (Sui equivalent) = 530 million T O E 225 million barrels = 30 million TOE 490 million tons = 163 million TOE = 723 million TOE
How meagre these reserves are can be judged from the fact that if these alone were to meet the entire commercial-energy demand of the country, they would all be exhausted completely within a matter of the next 10 years. The oil reserves would disappear within 2-3 years at an annual consumption growth rate of 10% without any import. Similarly the gas reserves would not last more than 18 years at an annual consumption growth rate of 10.6%. The sedimentary area (including the off-shore region) is estimated at over 800,000 k m 2 which offers promise of a large petroleum resource potential. However, the exploratory drilling effort has been extremely low, hardly 0.3 wells per 1000 km 2 of prospective a r e a - - a s compared to more than 100 wells per 1000 km ~-in industrialized countries and over 5 in India. Pakistan has an identified hydro-power potential of about 27,000 M W of which 3000 M W has already been developed, while an additional 6000 M W is under development or in advanced planning stages [6]. There will be considerable difficulties in further expansion of hydro-power because the most attractive sites will already have been developed. The cost of construction of new d a m s at remote sites, compounded by huge additional investment in transmission lines and concomitant losses, make it unrealistic to expect that m u c h more than half of the remaining hydro potential in the country will ever be exploited. 5. I N V E S T M E N T O P T I O N S : R O L E O F P R I V A T E SECTOR
In order to increase self reliance in energy, the energy sector has been receiving increased emphasis in national development since the 1970s. Energy sector investments corresponded to about 15% of the total public sector development expenditure in the early 1970s. This share has substantially increased over the last 15 years : to 25.4 and 31.7% during the fifth and sixth Five Year Plan periods (1978-1983, 1983-1988), respectively, and is planned to reach a level of 35,5% under the current seventh Five Year Plan. The share of the power sector in the total development expenditure also increased from 18.4% during the Fifth Plan period to 21.8% during the sixth plan period, and is now expected to increase further to 25.8% during the seventh plan period [3, 7, 5]. This increasingly high emphasis is a consequence of the basic strategy embodied in the sixth and seventh plans, calling for a sharp increase in the allocation for the power sector in order to achieve the twin objectives o f reduction in load shedding and rapid electrification o f rural areas. The share of the fuel sector, i.e. the energy sector minus the power sector (almost 95% o f which is accounted for by oil and gas) in total public sector development expenditure also increased from 7.0% during the fifth plan to 9.9% during the sixth plan period : it is stipulated to be 9.7°/0 in the seventh plan allocations, when it will a m o u n t to about $400 million invest-
155
ment per year on average. A marked increase has been noticed in oil exploration activity recently: l0 concessions have been granted over the last two years, mostly to the foreign private sector, envisaging the investment of risk capital of about $150 million over the next 2-3 years. New incentives now being offered by the government for foreign private investment in oil and gas exploration and development is expected to increase this activity further. The seventh plan puts heavy emphasis on promotion of private-sector activity through further deregulation of the economy, in order to transfer some of the financial burden from the government's budgetary resources to the private sector's own resources. Accordingly, it is envisaged that the share of the private sector in total fixed investment during the seventh plan period will be 44.5% as compared to 41.2% during the sixth plan period. Within the energy sector, the share of the privatesector investments in total energy-sector investments is expected to increase from about 12% during the sixth plan to about 21% during the current Plan period. Further, in addition to its participation in traditional areas related to production, transportation, and distribution of oil, gas and coal, the private sector is being involved for the first time in power-generation activities. To promote private-sector investment in power generation, a private-sector fund of about US$600 million has been created to provide loans to potential investors of up to 60% of the project cost [5,6]. Resources for this fund have been contributed by the World Bank, USA1D, and other bilateral and multilateral agencies. To achieve this level of private investment in the power sector, the Government is offering a number of incentives. An 18% return on equity is being allowed, corporate tax has been waived for the sponsors, foreign lenders have been exempted from tax on profits arising out of loans ; and, in some cases customs duties have also been waived. Initially, the private sector was restricted to thermal power plants based on oil and indigenous coal. Subsequently, the policy was extended to include thermal power stations using lowcalorific-value gas and imported coal and also hydroelectric stations. In principle, the government will give consideration to the use of any fuel for power generation having regard to both economy and diversity. The response from the private sector has been very encouraging, and a n u m b e r of power projects in the private sector, corresponding to a total capacity of some 5000 M W , are now under consideration. The government has created a Private Power Cell in the Ministry of Water and Power, for speedy negotiation and implementation of these projects.
6. E N E R G Y C O N S E R V A T I O N A N D EFFICIENCY I M P R O V E M E N T PROGRAMMES In 1986, Pakistan took a major initiative in this respect by establishing E N E R C O N , the National Energy Conservation Centre which is responsible for the planning and coordination of activities related to energy conservation and improvement of energy efficiency in all sectors of the national economy. The main thrust of E N E R C O N ' s effort is directed towards providing technical support to various energy consumers, manufacturers, public agencies etc. in the form of energy audits, demonstration programmes, feasibility studies or simply expert advice on energy conservation. The specific measures envisaged in different sectors of consumption are as follows.
Industry--O)
technical services comprising (a) boiler/
Data Bank
156
furnace tune-up (b) steam system survey and (c) electricalsystem survey, each leading to an average efficiency improvement of 5 8% : (2) demonstration project to illustrate energy savings attainable through the use of electronic-combustionanalysis technology, waste-heat-recovery systems, burner control systems, energy accounting systems etc. Buildings --(1) retrofitting of existing buildings; (2) improving the design of new buildings. In this respect, a National Energy Conservation Building Code, which includes recommended specifications, both for the design of buildings and for the use of equipment to heat, cool and light the buildings has been approved by the government for adoption on a voluntary basis. A qriculture--(l) retrofitting of tubewells, (a) efficiency improvement of tractors through dissemination of proper information to the farmers. Transport (1) auto-engine tune-ups with the help of electronic engine analysers ; (2) use of CNS as a motor fuel. P o w e ~ ( l ) reduction of transmission and distribution losses through the rehabilitation of equipment and improved load management measures, (2) appropriate tariff and nontariff measures leading to overall energy conservation in the power sector and reduction of peak demand.
7. E N V I R O N M E N T A L ISSUES
irreversible. Studies [10] show that chronic bronchitis results from poor indoor-air quality. Such health hazards are likely to exist in Pakistan, where food is usually cooked indoors in an open-fire wood stove. The major impact of hydroelectric generation is on the land needed to establish the reservoir, and on the supply of water and sediment downstream. Hydroelectric generation produces no atmospheric pollution. Part of the petroleum products used is refined in Pakistan, which increases atmospheric pollution from their extraction and processing. The combustion of fuel in cities is a major source of increase in carbon dioxide emission because of the heavy volume of traffic in Pakistan. The coal mines also add pollutants to the atmosphere. The coal in Pakistan is not of high quality and it has a high ash content which may increase the particle emission into the air. In view of the low per capita energy consumption in Pakistan, it seems that Pakistan is not a significant contributor to global CO2 emission. Therefore the environmental problems are arguably of less significance to the policy makers in Pakistan than elsewhere. Further, the country's immediate concern is to provide adequate energy to meet its socioeconomic development requirements and to achieve selfsufficiency in energy. Thus the country has to utilize the full potential of indigenous energy sources. However, efforts are underway to develop and introduce renewable-energy technologies which are environmentally safe. But renewables are not immediate alternatives to coramercial energy sources.
The major energy-related environmental concerns in Pakistan are as follows. (1) Degradation of the environment in major cities due to increasing emission of polluting substances (SO2, NO> CO etc.) from large industries, transport vehicles etc. (2) Use of outdated technology and lack of pollution control devices in major energy consuming facilities. (3) General adverse environmental impact due to large hydro dams, e.g. submergence of land associated with dislocation of population. (4) Deforestation and loss o f soil fertility due to largescale use of fuelwood and other commercial fuels. (5) Coastal pollution around port areas due to increasing oil leakages from ships and tankers. (6) Environmental degradation likely to result from the expected large-scale future use of indigenous poor quality coal with high sulphur content. The increase in the a m o u n t of carbon dioxide in the atmosphere is a major global concern. Carbon dioxide is produced when fossil fuels and biomass are burned. However it is important to realize that biomass used sustainably is not a net source of carbon dioxide, since carbon is fixed in the new plant growth at the same rate as by combustion. There is not any specific data available in Pakistan on emission of CO2 from commercial energy resources and from biomass. However, there is ample evidence that deforestation is occurring in parts of Pakistan. One study shows [9] that excess demand for fuelwood is the main cause of this. Land clearance to provide homestead sites, arable plots, and overgrazing by the large number of cattle are other major causes. Further, because of the high population growth rate, without sufficient commercial energy resources, demand for fuelwood will increase in future, and stock of accessible wood could be reduced drastically. Deforestation causes long-term damage to the environment as well as immediate h u m a n problems, by exacerbating soil erosion and its attendant problems. This damage is always expensive to repair and in many cases
8. S T R A T E G Y FOR S O L V I N G ENERGY DEFICIT P R O B L E M S AND M E E T I N G F U T U R E ENERGY DEMAND A question arising from energy demand analysis for Pakistan is : how will the country meet its future energy demand and cover its energy deficit now? There are several options with varying investment requirements. Consider, for instance, a strategy involving the following features : (1) utilization (and exploration) of domestic fossil-fuel reserves : (2) conservation of energy--eliminating losses in utilization of energy ; (3) use of alternative energy sources (solar energy, biomass), Fuelwood is a major source of energy to the people and it meets 60% of total energy demand of the rural sector [9]. Because of the deforestation problem, people in hilly areas of Pakistan where there are not significant number of trees and plantations, are facing a problem of wood scarcity. People have to travel away from their own the villages to collect wood and crop residues. There is an urgent need to address the problem. The general supply-and-demand approach must be used by: (1) reducing the rate of population growth ; (2) using wood more efficiently ; and (3) increasing the supply of wood. However, this is not a good solution to the problem. An efficient strategy would substitute noncommercial fuels with efficient commercial or alternative energy technologies, therefore emphasizing the increased use of commercial energy sources. Energy-conservation techniques should also be adopted, for which strong regulatory measures need to be framed. Some steps have been taken in this respect during 1986 but they are not adequate. Energy-efficiency measures should be
Data Bank enforced in buildings, transport, and in the domestic and agricultural sectors. For example, a major use of petroleum products is in the transport sector, It has been estimated that 10% savings in fuel consumption could be achieved by introducing guidelines for efficient utilization of fuel in this sector [10]. There will be a gradual reduction in fuel demand if old stock is replaced with more fuel-efficient vehicles. Electricity is a major component of increased energy demand in the household, industrial and commercial sectors. The major source for generating electricity is hydro. It has been estimated that 25% of electricity is lost from the point of generation to consumption. These losses could easily be eliminated by introducing technical measures [11]. The demand for electricity could also be reduced by better management. There is now clear evidence fi'om the developed countries [10] that it is often cheaper to reduce the energy demand by introducing energy-efficient appliances, than to increase the supply. Similar steps should be taken in agriculture, industry, cmnmerce, and in the domestic and public sectors. After the energy-conservation measures have been taken. the supplies from domestic energy resources could be increased by taking the following measures. • Hydro-power is a non-polluting renewable energy resource ; its potential could be developed as last as possible from the socio-economic and technological point of view. Small hydro plants could be installed on a large scale on rivers and canals to meet the local energy demand. These plants are found to be economically viable in China and other developing countries, especially when local materials and labour have been used for construction of these small plants. • In view of the large size of the presumed petroleum reserves, the exploratory effort may be intensified in the short to medium term future (5 10 years). The strategy for further development work in this field should be formulated in the light of medium-term experience. New oil fields could be explored by introducing advanced technologies. • Because of their poor quality, the coal reserves of Pakistan have not been put to proper use. Advanced technology could be used, however, to make use of the coal found in Pakistan. • In order to reduce the Mad on imported fossil fuels (oil), nuclear technology could be utilized within the next 5 10 years, provided the application of the technology is economically viable. • A gradual switch over from fossil fuels to renewable energy technologies would be the most feasible step to meet the long-term energy requirements of the country. In view of the major role these technologies could play in meeting the worldwide energy requirements, it is desirable that R & D efforts on the development of the most promising of these technologies for large scale deployment, in particular solar thermal and photovoltaics, are pursued vigorously. Renewable energy technologies such as biogas, windmills, and the use of solar technology in crop drying, cooling and ventilation of buildings could play a useful role in
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improving the energy supply situation. It is well-established that PV is cost-effective with diesel and hydro power in m a n y applications. 9. C O N C L U S I O N S Pakistan is facing a serious energy-deficit problem. The country is heavily dependent on import of fossil fuels from abroad. This trend is likely to continue in the near future. The rural sector does not have access to efficient energy resources at present. In view of the present energy situation and projected demands for energy, it is unlikely that there will be any significant change in the commercial energysupply situation in the rural sector. Wood will continue to play a dominant role in the overall supply of hydrocarbon energy to the rural sector. Renewable energy technologies need to be developed and introduced in the country. The energy demand could also be decreased by adopting energy-efficiency and conservation measures. Without alternative energy sources and improvemerits in energy utilization and conservation measures, Pakistan will become more and more dependent on the import of oil. Acknowledgements--The author is grateful to Dr Girma Zawdie at the David Livingstmae Institute, and Professor Chmies-Ross (Energy and Environment) at Strathclyde University, for encouragement to write this paper. The author is also grateful to Ms Fiona MacDonald for typing this material. REFERENCES
1. Economic Survey o/l Pakistan 1990 1991. Government of Pakistan, Islamabad. 2. Ayricuhural Statistics q f Pakislan 1989 1990. Government of Pakistan, lslamabad. 3. SLvth Fire Year Phm 1983 1988, Government of Pakistan, Islamabad. 4. Director-General Renewable Energy Resources. Em,rqy ~k,arhook 1989-1990, lslamabad. 5. M. Jameel and M. Arshad. Pakistan's Energy Future: Issues and Options (PAEC, Islamabad). IVEC-Con/I Enerqy/or Tomorrow's Worhl, New Delhi, India ( 1991 ). 6. M. K. Arshad, A. I. Jalal and G. R. Athar, Possible role of hydro resources in Pakistan. Rey/iona/ Seminar o, Energy Policies am/ Sll'at~Wies /~r J4"aler Resources Development in Pakistan. PAEC, lslamabad (1989). 7. Sel'enth Fire }'ear Plan 1988 1993 and Pro.Vwclive Phm 1988 2003. Government of Pakistan, lslamabad. 8. Energ)" Supply Situation at Farms in PakiszaH 1992. Survey conducted by the author. 9. M. Shaffi-ullah, Ellerq)" Problems ill the Rural Sector ()/ Pak{s'tan Sto'l'et'. Department of Geography, lslalnabad, Pakistan (1992). 10. A. E. Wheldon, Energy Options for Sustainable Development in Swaziland. J. R E R I ( ' Em'rgy 13 (1) (I 991). 1 I. A. R. Saeed, Pakislatl ~' Eneryy Policy Towards a New Strategy. Institute of Policy Studies, lslamabad (1983).