At a time when the country is facing severe power shortages, talk about expanding electricity generation should attract people’s attention. The current power crisis is not fuelled by a lack of generation capacity but by fuel shortages. This problem can be avoided through adequate planning, which encourages the country’s reliance on local resources, not on imported ones.
The Indicative Generation Capacity Expansion Plan (IGCEP) provides guidance regarding investments in the power-generation sub-sector for planning and approving projects and allocating resources. It is a 10-year rolling plan, which means that every year it is to be updated and one year added to it. Many things have changed and occurred, which affects the energy sector, since the first version of the IGCEP was made. There has been some deviation from the plan, both well-intentioned and contentious.
The new annual version has not been finalized yet and is passing through an internal evaluation process. The National Transmission and Despatch Company (NTDC) prepares the plan. The power division, in collaboration with the relevant agencies, evaluates, and Nepra approves it; the power authority often invites public comments.
The IGCEP provides for the existing capacity of 40,376MW in March 2022. By 2031, the installed capacity is likely to reach 63,503W; while 8,165MW will be retired. Over 12,500MW of additional hydro capacity will be added to reach the total hydro capacity of 22,419MW in 2031. The solar power capacity under the NTDC system has been reduced to 4,000MW (the additional 1050MW of solar is for K-Electric), ignoring the emerging realities and being oblivious to discussions in policy-making circles. It should be, and will be, doubled, and be brought forward. Perhaps the non-implementation of or delays in some hydro projects may provide the leeway.
The additional capacity of 32,987MW can be achieved through the investment of $50 billion. This includes funds worth $14 billion for the 4,500MW of the Bhasha Dam. Fortunately, the dam, which otherwise had many issues, has been included in CPEC projects. Previously, international financial institutions (IFIs) would have to get an NOC from India as the dam’s location is said to be in the disputed territory. The dam is required more for water storage than for power.
Energy prices have almost doubled; coal, LNG and oil are currently being used in power generation. Earlier, we suffered due to low power-generation capacity, and now after expanding our generation capacity, we have to suffer power outages due to high fuel prices and low fuel supply; our country couldn’t get one LNG proposal against the $1 billion LNG tenders floated by it. This has happened in the past months, but the situation was not this bad. Given the current high prices, many wonder if not getting a single offer was a bane or boon.
Ordinary people often question why Pakistan does not store excess energy. Electricity cannot be stored although new technologies have emerged to meet peak demand. Oil and gas can be stored, but their storage cost is quite high. However, something can possibly be done in this regard in the medium to long term.
The Pakistani economy is in the doldrums, with varying growth rates, current account deficit, rupee depreciation and mounting external debt. All of this may affect power demand and supply and resource allocation capacity. The IGCEP does not seem to have taken account of these factors. Will the demand remain the same? If not, how will it vary? Will there be enough investment resources to cater to the plan? The IGCEP will require around $50 billion, excluding transmission and distribution.
It is also a legitimate question why transmission has been excluded. Earlier, its exclusion was possibly justified under time and resource constraints. Can something be done about it? It is perhaps too much to expect the NTDC to answer the resource issue? It could have asked and involved other relevant institutions. Will the lower demand lower the resource requirement? Will demand be lower?
No effort seems to have been done, except for the repetition of the last data. What was in its possible domain to examine if cheaper renewable resources could be enhanced with or without storage? Is there any scope or possibility of retaining some power plants somewhat longer and thus affecting the resource requirement? We already see many independent power producers (IPPs) wanting to get extensions. The current plan anticipates the writing off of 10,000MW of capacity. It is uncertain if this would be feasible. However, the subject is worth exploring.
Many proposals are under discussion in policy circles; the two most important ones relate to solar power and Thar coal. A fast-track solar PV programme is under discussion to add cheaper power capacity to meet the challenge of high oil and gas prices. The plan has taken no notice of it and kept solar in the fourth year, same as earlier. A 1000MW addition per year could have been a more feasible and timely approach. KE, for a change, has proposed a better solution, which is more in line with the fast-track implementation.
There is also a threat of the shutdown of imported coal-based power plants due to a hike in imported coal prices if the coal pricing issue continues. The country is arranging to procure slightly cheaper Afghan coal for some temporary relief in the power sector. But the real solution is the conversion of imported coal-based power plants to Thar coal. This is feasible and is also under discussion.
The Lucky (Cement) power plant is using imported lignite in a pulverized coal power plant, which is the same technology as that of imported coal-based power plant projects in Sahiwal, Port Qasim and Hub. This conversion may not require the replacement of boilers; small changes in preheating and drying Thar lignite will be required. Germany has already employed similar approaches successfully.
Also, there is no mention of electric storage, which will be required if the solar and wind power share in the national power grid goes beyond a certain level. Power storage has become cheaper and technically available. Battery solutions do not require much time, which is required in the classic hydro pumped storage. This is also being discussed in IFI-financed and Pakistan-based technical-support projects. The IGCEP should have utilized the available reports.
The plan should have talked about electric vehicles (EVs). The country has an efficient EV policy. Due to a rise in oil and gas prices and the planned elimination of fossil fuels, there has been a significant shift to EVs which may become more affordable under a solar PV-based generation and battery-charging regime. EV inclusion will certainly affect the demand schedule; there should at least be a scenario-based analysis and inclusion in the plan; something on the lines of assessing the impact of conservation and labelling programmes of NEECA.
Risk analysis, which is missing from the document, is part of most strategic plans. We suggest that such analysis is added to the document. This will help identify the combination of circumstances and certain probabilities that affect the power sector. For instance, these days, we are going through some unfortunate circumstances that lead to loadshedding. These include the loss of hydro due to lack of rain and water shortages, the price and supply issues of oil, gas and coal, high prices, the unexpected failures of power plants, coal and fuelling issues of nuclear, etc.
Our climate pattern is changing, which may affect hydro supplies. As the share of hydro increases, the risk will increase too. How to mitigate such a risk and what strategies should be used are serious issues. Risk analysis should have been included in power planning.
The writer is a former member of the Energy Planning Commission. He can be reached at: firstname.lastname@example.org
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