ENERGY

RESOURCEOFPAKISTAN
SUBMITTED TO:
YOUSAF

RESPECTED SIR IMRAN

ENERGY RESOURCEOFPAKISTAN
INTRODUCTION:
Energy is the power to change things or in other words we can say that it is
the ability to do work. It gives us light it runs our machines it keeps us warm
and many other things. In other words we can say that it is impossible to
survive without energy in the present time. Moreover energy also plays a

great role in the economic development of country. A country utilizing all its
sources of energy has a better chance to grow economically as compared to
a country where the sources of energy are less or not utilized properly. This is
because energy has a direct impact on the standard of living of people and
industrial side of the country and both of these are a good measure of
economic development of a country. If people of a country are having a high
standard of living and their industrial side is progressing well (means the
exports are greater than the imports) than it is a clear sign that the country
is making full use of its resources its growth rate is high.

Definition:
Energy resources are generally defined as anything that can be used as a
source of energy. Some important energy resources are oil, natural gas and
coal. Access to energy resources is vital to economic development and
prosperity.

TYPES OF ENERGY RESOURCES:

1- Conventional sources
2- Non-conventional sources

A- Conventional sources
Conventional sources of energy are those sources which are generally used
in the country for the production of heat, electricity, and power. Pakistan has
the following conventional sources of energy that are as follows:
1) Thermal energy
2) Hydropower energy
3) Nuclear energy

B- NON-CONVENTIONAL SOURCES OF ENERGY

The less developing countries are now developing other renewable sources
of energy. These sources are comparatively cheaper to those of conventional
sources of energy and these sources have a simplified technology, the nonconventional sources of energy are as follows:
1) Wind energy
2) Solar energy
3) Bio gas (energy animal &plant wastes).

Conventional sources:
1-Thermal energy:
Thermal energy refers to the type of energy in which heat is used to produce
energy .Thermal Energy is the oldest type of energy. With all known history
available, Wood was always used for heating and cooking. In 2nd world war
fossil fuels entered in the form of coal to get the energy, until liquid fuels
were discovered and because of their convenience of transportation they
took over as major contributors of the energy source.
Once the steam engines were invented then the coal or liquid fuel was burnt
in the boilers and the heat produces steam which is used to drive electrical
generators, or any other mechanical device.

Thermal energy sources in Pakistan:

1. Coal
Pakistan has huge reserves of coal which can be used to overcome the
problem of energy crises in the country. The government of Pakistanis
making hectic efforts to introduce the coal usage in the industrial sector. The
machinery for these units is totally exempted from import duties and taxes. A
coal based power plant of 150MW has been set up in the interior Sindh.

2. Oil
Oil is one of the most important sources of energy throughout the world and
its importance is increasing day by day. Many wars are being fought just to
get the reserves of the oil. The government of Pakistan is making sincere
efforts to find out new oil fields in the country .the policy is to attain selfsufficiency in oil because oil as source of energy is expensive if it is imported
from other countries and it greatly increases the import bills of the country.at
present the generation capacity of electricity through oil is 12340MW

3. Natural gas
Natural gas is also a precious gift of Allah to our country. Huge deposits of
natural gas has been discovered in many parts of Baluchistan and Sindh.
Natural gas is a cheap sources of energy in comparison to oil and it can also
play a great role in the industrial sector because it is used as a raw material
in many industries like fertilizers cement and plastics etc.

2. Hydro energy:
Energy the life line of economic development, Pakistan is the
poorest of the poor as far as energy consumption for capital is
concerned per capital energy consumption is one of the indicator
of industrial development and quality of life of a country. Pakistan
has 14 Million BTUs compared to 34 Million BTUs for china. Per
capital electrical consumption per year of Pakistan 470KWh.

years
Installed
hydro
capacity(kw
h)

2006
20753

2007
21401

2008
22594

2009
24899

2010
27389

hydropower capacity (kwh)

30000
25000
20000
15000
10000
5000
0
2006

2007

2008

2009

2010

Interpretation:
In Pakistan hydropower energy is usually generated through waterfalls
(dams).there are many dams in the country which play a great role in the
generation of electricity for household, business and industrial sector. Since
independence huge amounts have been allocated for the development of
hydro power energy as it is a main source of electricity generation in the
country as a result of this the generation of electric power through
hydropower energy has been increased from 68MW in 1947 to6555MW in
2009 and 27389kwh in 2010.

Some components of hydropower system:

SR
.No
1
2
3
4
5
6
7

Name of station
TARBELA
GHAZI BAROTHA
MANGLA
WARSAK
CHASHMA
RASUAL
MALAKAND

Installed
capacity(MWS)
3478.00
1450.00
1000.00
240.00
184.00
22.00
19.60

3. Nuclear energy:
Pakistan is the 7th nuclear power and nuclear power weapon state.
As of 2009 the nuclear power plant make up to 2.4%, share of
total 0generation of the total generation where electricity made
by fossil fuel (coal, gas, oil) is 65.2% and 33.9% of it from the
hydropower.

Pakistan two nuclear reactor of 425MW power to generate electricity. The third
nuclear reactor will be operational in mid-2010. Pakistan atomic energy commission
(PAEC) is responsible for all nuclear energy and research application in the country.
Pakistan first nuclear reactor is a small 125 MW Canadian pressurized heavy water
reactor (PHWR) which started up international safeguards near Karachi which is
operated at reduced rate.KANUPP-2 and KANUPP-3 are under construction and being
built by PAEC. The KANUPP-2 (1000MW) KANUPP-3(1000MW) are part of Pakistan
civilian nuclear program. The second unit is chashma-1 in Punjab a 325MW
pressurized water reactor (PWA) supplied by china national nuclear corporation

(CNNC) under safeguards. The third nuclear reactor is Pakistan nuclear power fuel
complex (1000MW) pressurized water under IAEA safe guard. The 90% of work of
plant is done and will generate electricity in 2010.

Non-conventional energy resources:

4-wind power:
Wind energy is another environment friendly alternative source of energy.
Pakistan has some 'wind-swept' corridors that are essential for generating
power through wind energy. Extensive research and analysis of wind speeds,
directions and corridors is important before investing in this sector. The
Government of Pakistan has set the 'Alternative Energy Development' board
a target of generating 700MW of electricity through wind energy by the end
of 2010 and around 9700MW by the end of 2030.
Independent Power Producers have set up wind farms on a small scale,
possibly to assess the potential of wind energy in Pakistan, which is believed
to be immense. Pakistans first major wind power plant deal has been signed

by the Hyderabad electric supply company with a Turkish firm. The wind-farm
will provide HESCO with 6MWelectricity, powering almost 6900 homes. We
believe if the AEDB is able to achieve its target by producing 700MW of
electricity through wind energy; it will be a trend setting breakthrough for
Pakistan's energy woes.
years
Wind
energy(M
W)

2010
700MW

2011
900MW

2012
1100MW

2013
1250MW

2014
1450MW

WING ENERGY OF PAKISTAN

1600
1400
1200
1000
800
600
400
200
0

2010

2011

2012

2013

2014

Wind energy (MW)

Interpretation:
Pakistans energy requirements are rising constantly due to many reasons.
But unfortunately, electricity production is less than electricity demand. The
main reason is that major part of electricity is being producing from natural
gas, fossil fuel which are costly energy resources as well as available in
limited amount. Thats why irrespective of those resources, Pakistan should
also produce energy from all available energy resources, solar, biomass and
wind power.

5-Solar energy:
Solar Village Electrification Program was initiated under PMs directive. 3000
Solar Home Systems have been installed in 49 villages of district Tharparkar,
Sindh. Another 51 villages in Sindh and 300 villages in Baluchistan are

approved for electrification using solar energy and will be implemented on

release of funds.
AEDB is also doing Parliamentarian Sponsored Village Electrification Program
and has so far prepared and submitted 39 feasibilities for approval and
release of funds. Funds for 04 schemes have so far been released under
PWP-II and the schemes have been implemented.
Separate pilot programs have been initiated under World Bank assistance to
study the technical, financial and social viability for conversion of electric /
diesel driven tube-wells / dug-wells with solar energy and replacement of
conventional water heater with Solar Water Heaters.
years
Solar
energy
(MW)

2009
5.53

2010
2.58

2011
9.35

2012
26.79

2013
54.77

SOLAR ENERGY OF PAKISTAN

35
30
25
20
15
10
5
0
2009

2010

2011

2012

2013

SOLAR ENERGY (MW)

Interpretation:
Pakistans energy requirements are rising constantly due to many reasons.
But unfortunately, electricity production is less than electricity demand. The
main reason is that major part of electricity is being producing from natural
gas, fossil fuel which are costly energy resources as well as available in
limited amount. Thats why irrespective of those resources, Pakistan should
also produce energy from all available energy resources, solar, biomass and
wind power.

6-Circular Debit:
According to Economic Survey of Pakistan 2011-12 the main hurdle in the supply of energy is
accumulation of the massive circular debt. The major problems which cause accumulation of
circular debt is the partial transfer of tariff as determined by National Electric Power
Regulatory Authority (NEPRA), heavy line losses (present level of line losses are almost 20
percent), incomplete corporatization, weak governance and costly fuel mix putting an extra
financial burden on meeting the cost of fuel oil due to constant increase in the oil prices, etc.
The government has transferred bank loan liabilities of Rs 216.0 billion (as of 30-06-2009)
and Rs. 85.114 billion from the books of power companies and placed these amounts with
the Power Holding (Pvt) Ltd (PHPL) in November, 2011. The government has repaid these
loans to the bank along with markup.
Circular debt at the end of the fiscal year 2006 was estimated 84.07 billion and at 2008,
2009 it was estimated 144.99 billion and 235.65 billion representing approximately 4% of
the gross domestic product of circular debt.
years
Circular debt
growth rate
(billion)

2006
84.07

2007
111.26

2008
144.99

2009
161.21

2010
235.65

circular debt growth rate (billion)

250
200
150
100
50
0
2005

2006

2007

2008

2009

2010

2011

Interpretation:
It increase countinusely constrain in the availability of electricity and slow
down economic growth.
Poor governess and transmission and distribution losses and theft.

 Poor revenue collection by DISC.

7-Energy Consumption:
The consumption of petroleum products showed continuous declining trend since 2001-02.
However due to positive changes in years 2004-05, 2007-08 and 2009-10, the overall
average for last ten years became positive 1.1 percent per annum. The longer term trend
suggests that composition of annual energy consumption is shifting from petroleum products
to other energy sources due to volatile prices of oil. Thus consumption of gas, electricity and
coal has increased at an average of 5.1 percent, 4.8 percent and 7.7 percent per annum for
last ten years (see Table 1 and Figure 2 to Figure 5 which shows the consumption of
Petroleum Products, Gas, Electricity and Coal respectively.

Energy consumption
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
petroleum product
2006

Gas
2007

electricity
2008

2009

coal
2010

Interpretation:
This energy consumption mix has witnessed significant transformation since
2004-05. Resultantly, the major consumption source of natural gas witnessed
an increase of 7.7 percentage points during 2009-10 compared to 2004-05
while share of oil consumption declined by 8.6 percentage points during the
same period. These changes in consumption of gas and oil mainly owed to

shift from imported expensive fuel (oil) to relatively cheaper source of gas.
The energy requirements are increasing rapidly, especially electricity
Consumption therefore energy must be a high priority for the public and
private sector in near future and in long term.

8-Supply of Energy:
Primary energy supply has increased by 2.3 percent during 2010-11 when compared with
last year. The availability of energy per capita in 2011 remained 0.372 TOE compared to
0.371 TOE in 2010 posting a positive growth rate of 0.16 percent. Due to population growth
rate of almost 2 percent, the balance between energy supply and emerging needs was
outset. Although the energy supply has been increased by 60 percent since 1997-98 to
2010-11 yet availability of energy per capita only increased by 16 percent (see Table 2 and
Figure 6 and 7). Primary Energy Supply and Per Capita Availability

SUPPLY OF ELECTRICITY(MILLION TOE)

64
63
62
61
60
59
58
57
56
55
2006

2007

2008

2009

2010

9-Growth in Consumers:
The number of consumers has been increasing due to rapid expansion of electric network to
villages and other un-electrified areas. During July-March 2011-12 the number of consumers
has been increased to 20.85 million as compared to 20.12 million in the comparable period
of last year. The trend of increase in number of consumers during the last five years is given
in the Table 6.

Growth of consumers
20,000,000
15,000,000
10,000,000
5,000,000
0
2006

2007

2008

Domestic

2009

Commerical
Domestic
2010

Commerical

Interpretation:
The consumption of electricity by economic group identifies domestic sector
as largest user of electricity in Pakistan because number of population
increase day by days as population increase then domestic, commercial,
industrial use of energy resources is also increases.

10-Tariff determination:
The Consumer End Tariff is also determined by NEPRA to recover the cost of
whole supply chain. NEPRA determines the Consumer End Tariff structure at
each stage of generation, transmission and distribution licensee, on the basis
of various Slabs depending on nature of connection and the consumption.
The overall cost of generation, transmission and distribution (each
determined at relevant stages by the NEPRA) is published in the Gazette of
Pakistan under Schedule I.
The Government of Pakistan, in order to facilitate end Consumers gives
subsidy and reduces the tariff chargeable from end Consumer that is
provided by Schedule II.
Based on the tariff and price setting methodology explained above, the
Power Purchase Price, Distribution Margin of each of distribution licensees is
determined for financial year 2012-13 on projected numbers, which in turn
formulates the reference values for the monthly fuel adjustments & quarterly

adjustments with respect to Capacity and Transmission Charges for the

DISCOs.
The NEPRA Determined revenue requirement of each of service territory of
the distribution companies / licensees is tabulated below:

Discos
LESCO
GEPCO
LESCO
FESCO
MEPCO
PESCO
QESCO
HESCO
SEPCO

PPP
11.45
12.12
12.09
11.85
12.78
14.25
13.54
12.42
14.51

DM (KWH)
0.95
0.66
0.97
0.88
0.80
1.18
1.74
0.91
1.33

PYA
1.10
1.17
1.13
1.34
1.26
1.11
1.50
(0.71)
0.31

TRIFF DETERMINATION
16
14
12
10
8
6
4
2
0

IESCO GEPCO LESCO FESCO MEPCO PESCO QESCO HESCO SEPCO

PURCHASING POWER PRICE

INTERPRETATION:
The main focus of regulatory process is the determination of prudent cost for
all the generation, transmission and distribution licensees involved in
delivering electric power to the end-user customers. Costs should include all
reasonable and necessary costs such as capital, operating, fuel,
transmission, financing, and administration, i.e. all prudently incurred costs
of generation, transmission and distribution.

11-Loadshading:
Pakistan due to load shedding, was initiated on 4th July 2012 and ended on
10th July, 2012. More than 3000 respondents hailing from 193 cities of
Pakistan responded to this online survey and answered a total of 15
questions confessed their opinion regarding load shedding in their area. 71%
respondents are employed professional while the rest were either
unemployed or students Respondents represented 193 cities and 70% hailed
from Lahore, Islamabad Rawalpindi, Karachi and Peshawar. 27% of
respondents belong to Lahore, 20% to Islamabad-Rawalpindi, 5% to
Peshawar, and 19% from Karachi. 76% of the respondents report that power
outages have significantly increased during the last few months whereas a
meager 1.5% report they have decreased significantly 41% of the
respondents face 8-12 hours of load shedding at home per day. Of the
employed sector, 37% working professionals do not have any back up power
supply at home, whereas 43% make do with a UPS when load shedding
occurs.

Magnitude of loadshading
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%

80

Interpretation:
Owing to this the load shedding is happening and it is increasing day by day.
The government is unable to bear the huge costs but now is time the
government realized and tried to solve the load shedding problem as quickly
as possible by holding talks with employees and with consumers.

12-Structure of energy sector:

This paper is an attempt to study the regulatory environment in the
electricity sector of Pakistan. NEPRA, a regulatory authority was formed in
1997 to protect consumer interests in the area of electricity provision, and to
ensure an efficient and competitive environment for the electricity
generators and distributors, but it has so far not been able to achieve
anything. The power sector (dominated by WAPDA and KESC) is still affected
by institutional and organizational weaknesses, with inefficient and nonoptimal tariffs, high line losses, and high level of corruption. It has been
found weak administrative governance in NEPRA in the form of lack of
autonomy, resulting in the overall institutional inability to carry out the
desired functions effectively. In addition, NEPRA is lacked in professional
expertise to supervise and control the power sector and establish a rational
and equitable pricing regime.

13-ROLE OF GOVERNMENT
The GOP needs to redefine its role in the power sector to one as a policy
builder one national energy level and work through the BODs and allow
international best Practices for improved corporate governance for each of
its owned entities, with agonal to allow corporatization for proven financially
sound entities. The GOP needs to support a more competitive market
structure and assist NEPRA to be independent and strengthen the

professional and technical requirements members and staff; and develop a

comprehensive capacity building and train in effort initiated. Tariff and
subsidy disputes between the provincial governments and CPPA and the
DISCOs, need to be resolved, either by negotiation or arbitration. Legislation
declaring electricity theft a punishable crime with penalties ranging from
fines to imprisonment needs to be implemented with specialized courts
established for the purpose. the selection criteria and methodology for
appointment of Discos BODs needs to improved. Members of the BODs need
to have high professional and technical capabilities; be independent of
political influence; have full authority for decision making at the DISCO; and
receive training to effectively monitor performance and enforce
accountability of DISCO management and staff. Changes to Articles of
Association of the DISCO to improve directors term of office and maintain
institutional knowledge with proper rotation and replacement. Eliminate the
uniform tariff and gradually move toward the regulators differential tariffs
based on true costs. The regulator to enhance tariffs with targeted
performance-based tariff to all DISCOs and remove to current cross subsidy
between the efficient and inefficient Discos Improve the fuel allocation
policy in the short-term to allocate fuel to the highest value uses (e.g., assign
a high priority to power sector in the allocation of natural gas), and in the
long term eliminate fuel allocation so that fuel use is based on competitive
market forces. Formulate policies and plans to promote hydro power and
other domestic sources of energy that will assist in balancing the electricity
supply portfolio. Implement a strong program of energy conservation and
demand-side management.

CONCULSION:
Presently Pakistan is pursuing a multi pro-longed strategy to ensure
adequate and uninterrupted oil and gas supply and other energy resources
to sustain the present pattern of energy for the rapid national economic
growth. Greater reliance on gas, aggressive pursuit of hydroelectric power
generation, and enhancing nuclear power generation capacity are some of
the key elements of this strategy. Pakistan is also seeking to expand its
primary energy supply base by encouraging oil exploration and power
generation companies to undertake energy project in Pakistan. The regional
gas pipe line projects in which Pakistan is actively pursuing to meet its
expanding domestic energy demands. These are the pre-requisite for
resolving energy crises that, unless resolved promptly, would cast a long
shadow on the short and medium term objectives of economic growth and
development.

Energy needs are indelibly linked to Pakistans economic and sustainable

growth capabilities. Pakistan has been in increasing in demand across the
various areas of energy sources. With a growing economy and the desire for
vast production and consumption across the country, the energy demands
remain high. Given the need for energy, the Government of Pakistan is doing
the utmost to promote renewable energies, various energy sources and
energy efficiency.

RECOMMENDATIONS:
Pakistan should focus on the utilization of hydroelectric resources through
building of dams such as Kala Bagh Dam, Bhasha Dam etc. to produce cheap
electricity. It should improve relations with international and Regional
Corporation. It should activate in Thar coal project with the assistance of
China to address energy crises. It should adopt new policies to overcome the
problem through renewable energy resources i.e solar, wind and tidal energy.
It should take positive steps to finalize international gas pipe line projects i.e.
IPI (India, Pakistan, Iran) Gas pipe line project which meet the needs of gas
demands of Pakistan and possibly India. It should make effort to fulfill the
project with Turkmanistan and Afghanistan gas pipe line which was floated by
Turkmenistan in 1991 to meet the demands of gas for Pakistan.