Kalim A Siddiqui Pakistan`s Power Sector Need

Report
Pakistan’s Power Sector
Need for Reforms
By
Kalim A. Siddiqui
President-Petroleum Marketing
Byco Petroleum Paksitan Limited
4th International Power Generation Conference – January 11, 2011
Outline
• Overview of Pakistan Energy and Power Sector
• Reasons for Power Crisis
• Drivers for Reform
• Roadmap towards reform
• Action Plan and Recommendations
Power Gen Pak 2011, Karachi
April 8, 2015
Pakistan Power Sector
Need for Reforms
Overview of Pakistan Energy Sector & the
developing Crisis
Power Gen Pak 2011, Karachi
April 8, 2015
Overview of Pakistan Energy Sector
Energy Mix
Electricity has a 15% share in the energy mix of the country,
which is a 1.3% decrease during the last 10 years.
LPG
1.5%
Coal
10.4%
Electricity
15.3%
Gas
43.7%
Oil
29%
Source: Economic Survey of Pakistan 2009-10
Power Gen Pak 2011, Karachi
April 8, 2015
Overview of Pakistan Energy Sector
Power Sources
Approx 20,000MW Installed generation capacity
Source: Economic Survey of Pakistan , WAPDA
Power Gen Pak 2011, Karachi
April 8, 2015
Energy Sources
Change in Installed Capacity
• Country had an installed generation capacity of about 20,000 MW (as of FY
2010 end), which was a 2.1% increase from FY 2009.
• Low growth in capacities aggravates supply and demand imbalance
7,000
8.0
6,616
6,555
7.1
6,000
7.0
6.0
4,844
5.0
4.0
4,000
3.0
2.4
3,000
0.0
0.0
2,000
1,955
% Change
Capacity MW
5,000
2.0
1.0
0.0
1,000
462
-1.1
-1.0
0
-2.0
Hydel
Thermal
IPPS
Capacity
Nuclear
KESC
Change %
Source: Economic Survey of Pakistan 2009-10
Power Gen Pak 2011, Karachi
April 8, 2015
Energy Consumption & Output
Annual Consumption and Output
2000 - 2010
In Mn MWh
Average annual Consumption of
electricity in the last 10 years
has increased by nearly 5%, 55
Mn MWh of electricity being
consumed in FY 2010 (-1.7%
growth from FY 2009).
120
100
80
60
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Consumption
Output
Source: Economic Survey of Pakistan 2009-10, Hydrocarbon Development
Institute of Pakistan
Power Gen Pak 2011, Karachi
April 8, 2015
Supply and Demand gap
120,000
Projected Demand Vs Supply
113,695
100,000
80,566
90,000
In MW
80,000
54,359
70,000
60,000
36,217
40,000
40,000
24,474
18,883
27,000
20,000
19,477
17,008
0
2009
2010
2015
Demand
2020
2025
2030
Supply
Source: Wapda
Power Gen Pak 2011, Karachi
April 8, 2015
Reasons for Power Crisis
Fuel Prices
Dependency on imported oil
High cost of fuel and price volatility
Circular Debt
Alternate
Energy
Lack of utilization of coal reserves
Less emphasis and awareness regarding use of renewable sources of energy
Depleting natural resources such as gas.
Lack o f exploring alternative energy options like nuclear, hydel, coal, gas etc.
Development of wind and solar options
Technical
Losses
Development
issues
Socioeconomics
Investment
Crisis
Ageing of equipment and poor distribution network
Ineffective utilization of installed power generation capacity
Wastage of energy due to line losses
Slow development of Hydrocarbon energy projects
Lack of exploration activities
Lack of investment in Dams and reservoirs
Increasing demand due to economic progress
Power generation capacities did not match demand during previous regime when
consumer financing was promoted.
Uncertain law and order situation
Lack of planning in viable projects such as LNG.
Delays in implementation of projects e.g. QP , IPI and TAPI projects
Power Gen Pak 2011, Karachi
April 8, 2015
Pakistan Power Sector
Need for Reforms
Drivers for reforms and recommendations
Power Gen Pak 2011, Karachi
April 8, 2015
Roadmap Towards Reform
The Challenge
Poor
Planning
Investment
and
Financing
Governance
Crisis
Financial
Discipline
Efficiency
Crisis
Fuel Crisis
Power Gen Pak 2011, Karachi
April 8, 2015
Roadmap Towards Reform
Global Trends
• Energy shortfall in developed and emerging economies.
• Major oil producing countries oil production is on a plateau or
peaked
• Increasing dependence on Middle Eastern oil.
• Expected volatility/rise in oil prices
• Increasing correlation between energy use and environmental
impact such as carbon emissions, conservation and protection.
• Energy supply and demand affecting energy safety as well as
diplomatic relations.
Power Gen Pak 2011, Karachi
April 8, 2015
Action Plan and recommendations
Short Term
•
•
•
•
Availability of low cost power generation mix
Optimize existing power generation capacities
Improving efficiencies through latest technologies
Reforms to strengthen good governance issues (overstaffing,
mismanagement, corruption etc.)
• Recovery of billed amounts
• Decentralize WAPDA/PEPCO system and privatize distribution
companies
• Facilitate and encourage public-private sector participation
Power Gen Pak 2011, Karachi
April 8, 2015
Action Plan and recommendations
Medium Term
• Need for continuity in government policies and reforms
• Ministry of Energy be formed by consolidating MoPNR and
MoWP
• One window operations for investors to facilitate investment in
power sector.
• Improve law and order situation to attract foreign investment
in the sector.
• Increase share of nuclear, hydel and gas /coal based power
projects in the country’s energy mix.
Power Gen Pak 2011, Karachi
April 8, 2015
Action Plan and recommendations
Long Term
•
•
•
•
•
Integrated energy plan for the country
Roadmap for nuclear, hydel, coal / gas progression
Encourage energy R&D mechanism in the country
Synergy between energy and environment policies
Policies to establish alternate energy sources so that market
potential is clearly visible to MNCs and International investors
• Foster niche markets for early commercialization of new
technologies and development of alternative energies such as
Wind, Solar, Water waves, etc
• Develop Global alliances for energy security
Power Gen Pak 2011, Karachi
April 8, 2015
Thank You
Power Gen Pak 2011, Karachi
April 8, 2015

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