Energy Scenario in Pakistan: Current Energy Shortage and Roots of Energy Crisis

1CHEMICAL ENGINEERING
Chemical Engineering
[Name of the student]
[Name of the University]
[Author note]

2CHEMICAL ENGINEERING
Chapter 1:
Energy Scenario in Pakistan:
Influence upon the social prosperity along with in the planning for long term usage of the
energy resources which are domestic in nature in order have stability in the economy of the
developing countries which includes Pakistan which is dependent upon the energy sectors
growth. Since last few years it has been seen that Pakistan is facing an energy crisis which is
totally unprecedented. The demand for energy has exceeded beyond the indigenous supplies
which has initially lead to the situation where Pakistan has become dependent upon imported oil
which acts as a substantial burden upon the country’s economy.
Government of Pakistan has been associated with perusing of certain policies so as to
confirm the security of the energy supply of the country and also to increase the domestic
supplies, diversifying of the imports and attracting of more foreign investments in order to
include the coal, natural gas and electricity which initially encourages the economic inter-fuel
substitution along with the promotion of the energy efficiency and renewable energy. This was
also done in order to provide support to the regional as well as to the interregional cooperation.
Pakistan is generally considered to be the ideal location where foreign private investment can be
made in order to upstream and downstream the hydrocarbon sector. This is mainly done for the
purpose of providing a deregulated transparent level playing field for all.
An increase in the primary commercial energy supplies was witnessed in the financial
year of 2009-10 which was around 0.8 %( i.e. 62.6 million tons of oil to 63.1 million tons of oil
from the year 2008-2009 to 2009-2010). The increased rate of supply came from various sources
which included the hydel electricity (0.1 mtoe), nuclear electricity (0.3 mtoe), natural gas (0.6
mtoe), and imported electricity (0.01 mtoe). As compared to the last year there was a decrease in
the supplies of the LPG, oil and coal. The different shares that the various sources of energy

3CHEMICAL ENGINEERING
were having in the year of 2009-2010 are 48.8% of natural gas, which was followed by the
31.4% oil, 10.6% of hydro-electricity, 7.3% of coal, 1.1% of nuclear energy, o.6% of LPG and
lastly 0.1% of electricity.
There was an increase in the natural gas production from 4002 to 4063 million cubic feet
per day in the year of 2009-2010, whereas the production of oil decreased to 64,948 barrels per
day to 65,845 barrels per day. A slow progress was seen in the drilling activity in the two
preceding years. In the year of 2009-10 about 26 explanatory wells were drilled whereas in the
year of 2008-2009 and 2007-2208 it was around 27. In the year of 2009-2010 about 42
development wells were drilled which was around 59 in the year of 2008-2009 and 53 in the year
of 2007-2008. The efforts made due to drilling resulted in 15 new discoveries which mainly
consisted of the gas/condensate and out of this 15 discoveries 7 were done by the OFDCL and 8
of them were discovered by the private sector companies.
There was an increase in the consumption of oil by 7% in the year of 2009-2010.the main
reason lying behind this was the increase in the consumption of motor spirit by 27% in the
transport sector and besides this the consumption of furnace oil increased by 16% in the power
sector. Besides this the consumption of E-10 fuel also increased which was added in the transport
sector this year. There was a decline in the consumption of fuels by 7% in domestic sector, 17%
in the agriculture sector and 12% in the government sector. There was a drop in the consumption
of furnace oil in the cement industry as well which was around 41% that is 105,4242 tons in the
year of 2008-2009 to 61,787 tons in the year of 2009-2010.
There was an increase in the importing of petroleum by 12% and it was also seen that the
importing of crude oil decreased by 15% than the previous years. The increase in the POL
occurred due to the increased rate of import of the furnace oil by 10%, motor sprit by 132% and
aviation fuel by 140%. The overall production of the refineries decreased by 8% and this resulted

4CHEMICAL ENGINEERING
in the less production of the kerosene by 21%, diesel furnace by 29%, and oil by 19% and
naphtha by 11%.
In the year of 2009-2010 the consumption of natural gas increased slightly by 1% than
the previous years and this increase in the consumption was due to the fertilizer by 22%,
transport by 12%, and industry by 5%, commercial by 4% and lastly domestic by 3%. There was
also decrease in the consumption of natural gas which was around 73% in the cement industries,
7% in the Pakistan steel mills and lastly 9% in the power sector.
There was also decrease in the production of coal as well by 7% in the year of 2009-2010
and this mainly happened due to the lower rate of production by the Baluchistan and the KPK
coalfields. The importing of coal had increased slightly by 0.13% and this initially resulted in the
3% decrease on the overall coal supplies/consumption. There was also increase in the
consumption of coal for generating power and the increase was about 12% that is from 112520
tons to 125482 tons.
Commissioning of five new IPPs were done in the power sector and this includes the
Engro, Orient, Atlas, Saif Power and lastly Nishat in the year of 2009-10. This initially resulted
in the providing of help for increasing the installed capacity that the power plant was having
which was seen to be around 1089MW in the year of the 2009-10.
In the year of 2009-10 the generation of electricity also increased by 4.1% which reached
an amount of about 95608 GWh. The generation of electricity mainly included thermal energy of
about 67.3%, hydel energy of about 29.4%, nuclear energy of about 3.0% and the imported
amount of electricity was around 0.3%. The consumption of electricity increased by 5.7% which
was around 74348 GWh and was more than the amount of the last year which was around 70371
GWh last year. The major amount of increased rate of consumption was seen in the domestic
sector which was around 1990 GWh, agriculture which was around 894 GWh, industry sector

5CHEMICAL ENGINEERING
which was around 494 GWh, commercial sector which was around 354 GWh and lastly in the
bulk supplies which was around 241GWh. There also occurred a reduction in the losses of T&D
public sector power system and the reduction was from 21.6% to 20.6% in the year of 2009-10.
1.2. Roots of Energy Crisis
1.2.1. Historical crises
 Oil crisis in the year of 1973: the major cause lying behind the crisis was that exporting
of one of the OPEC oil was restricted and this was done by the major Arab oil-producing
states and this happened when support was being provided by the western Israel at the
time of Yom Kippur War.
 Energy crisis of 1979: the major cause lying behind this was the Iranian revolution
 Rise in oil price in the year of 1990: Gulf war was the major cause behind this.
 Electricity crisis of California in the year of 2000-200: the major cause included the
failure in deregulation as well as in the business corruption.
 Fuel protest of UK in the year of 2000: the major cause lying behind this was the increase
in crude oil’s price which were added with the existing high taxation on the road fuel in
the UK.
 Natural gas crisis of North America.
 2004 energy crises of Argentina
 From many years there existed energy shortage in North Korea
 Shortage in energy supplies was also experienced by Zimbabwe for many years which
mainly occurred due to mismanagement of finance.
1.2.2. Emerging shortage
Within 40 years it is estimated that the second largest oil field Kuwait’s Al Burqan Oil Filed
would get depleted.

6CHEMICAL ENGINEERING
The major crises which are existing in today’s world mainly includes the following:
Increase in the price of fuel since 2003 and this was mainly caused due to the increased global
demand of petroleum which initially coupled with the production stagnation, along with the fall
in US dollars value along with other several causes.
The central Asian crisis of 2008 which was mainly caused due to the abnormal temperature and
the level of water in the areas which are dependent upon the hydroelectric power. Although there
existed significant number of hydrocarbon reserves in February 2008 but still the President of
Pakistan was associated with announcement of plans in order to tackle the shortages which were
was moving towards the stage of crisis. Along with this the president of South African President
was also associated with appeasing the fears related to the prolonged crisis of electricity in the
country of South Africa.
Electrical crisis of South Africa was estimated to be lasting till 2012 which was responsible for
the rise in price of platinum in February 2008 which also resulted in the reduction of gold
production.
Towards the end of 2005 China also experienced severe amount of shortage in energy which
occurred again in the early days of 2008. At the time of latter crisis China also suffered severe
amount of damage in the power networks associated with the shortage in the amount of diesel
and coal. The supplies of electricity in the Guangdong province was estimated to have a short
fall of 10 GW.
1.3. Current Energy Shortage in Pakistan:
July 2008
Power crisis is also suffered by Pakistan which is the world’s sixth most populous
country and by power it means electric power not political power. In the year of 2001 it was seen

7CHEMICAL ENGINEERING
that the country had an excess power capacity of 4000 megawatts. In today’s world it has been
seen that there exists 15% shortfall in the capacity that is needed. The main reason lying behind
the shortfall is mainly due in the parts due to the existence of dry weather that is responsible for
the reduction in the output of hydropower. Another major lying behind this is due to the poor
quality of planning. Pakistan also had the high capacity of hydropower and large deposits of coal
however it has been seen to be very slow for the purpose of exploiting the resources.
Besides this it has also been seen that Pakistan is associated moving more and more
towards the energy crisis and it has been seen that shortfall in this has been associated with
hitting a record of level of around 7,075 MW in the month of July which initially resulted in
gradual shutdown of around 24 units of the plants generating power which was followed by
severe scarcity of fuel. According to a source there was a situation which initially pushed to
customers to bear the brunt of 18 to 20 hours load shedding and this might seem to be increasing
due to various factors
The WAPDA has been associated with facing an electricity shortfall of 5750 MW within
its own system and along with this in the IPPs there was a recorded shortfall of about 1325 MW.
The IPPs are associated with including the country’s largest IPP which was having the capacity
of around 1600 MW Kot Addu Power Company (KAPCO), 120MW Japan, 365 MW AES Pak-
Gen. limited and fifty percent shutdown of 117 MW Southern Electric Power Company (Sepcol),
362 MW AES Lalpir, 586 Uch Power Limited. Kot Addu Power Company (KAPCO), country’s
largest IPP with a capacity of 1600 MW, which compromised of 10 multi fuel fired gas.
The present situation on ground can be stated that there is a lack in the capacity addition
which would be associated with causing a shortage in the power to an extent of 5,500 MW in the
year of 2010. Besides this the current shortfall taking place in the demand of electricity and the
supply mainly occurred due to the inability of the government to make the entire payments and
this initially forced towards the closure of some of the thermal power plants.

8CHEMICAL ENGINEERING
According to the official records it was seen that the generation from the Pepco,s own
thermal power plant had shrunk to the low ebb because of the fact that Pepco was not capable of
purchasing the fuel oil from its suppliers. Wapda’s thermal plant was capable of producing a
maximum amount of 1900 MW electricity on 20th August against their capacity of about of 4829
MW and this mainly happened due to the inability of purchasing the furnace oil along with the
minor technical faults in gears, clutches and the switches.
Similarly the generation occurring from the IPPs was seen to be around 3470 MW on 19th
August which occurred against the capacity of 6115 MW which again occurred because of the
fiscal constraints. The same thing has been occurring since last two months as the total thermal
power generation remained less and this was seen to be around 6000 MW which is against the
total capacity that is around 12000 MW.
Due to all this thing Pakistan State Oil which is the largest and state owned supplier had
refused the making of payments to all the refineries or lift fuel oil. Due to all this reason the
refining the capacity of some of the refineries had reduced by an amount of one-third and
because of this the shortage constraints lead to the shortage in the consumer market of the
petroleum product.
Besides the availability of the generating capacity of around 18000MW Pepco plants were not
having the capability of generating more than an amount of 12000 MW for the last two months
in spite of having the maximum amount of power generation due to the hydropower projects
which mainly due to the high rate of flow of water in the rivers because of the monsoon season.
Karachi Situation
The system of Karachi Electric Supply Company’s is consisting of the thermal plants in
Karachi which were not capable of generating more than 1,300MW electricity against their
capacity of about 1,800MW. The major reason lying behind this was due to the technical
problems that lead to shortage in the fuel.