Pakistans Power Sector Need for Reforms By Kalim A. Siddiqui President-Petroleum Marketing Byco Petroleum Paksitan Limited 4 th International Power Generation

Pakistan’s Power SectorNeed for Reforms

By Kalim A. Siddiqui

President-Petroleum MarketingByco 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

April 10, 2023Power Gen Pak 2011, Karachi

Pakistan Power SectorNeed for Reforms

Overview of Pakistan Energy Sector & the developing Crisis


Overview of Pakistan Energy SectorEnergy Mix Electricity has a 15% share in the energy mix of the country,

which is a 1.3% decrease during the last 10 years.

Power Gen Pak 2011, Karachi April 10, 2023

Source: Economic Survey of Pakistan 2009-10

Overview of Pakistan Energy SectorPower Sources


Source: Economic Survey of Pakistan , WAPDA

Approx 20,000MW Installed generation capacity

Energy SourcesChange 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

April 10, 2023Source: Economic Survey of Pakistan 2009-10

Power Gen Pak 2011, Karachi

Energy Consumption & Output


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).

April 10, 2023

Source: Economic Survey of Pakistan 2009-10, Hydrocarbon Development Institute of Pakistan

Supply and Demand gap


Source: Wapda

Fuel PricesFuel Prices

Reasons for Power Crisis


Alternate Energy

Alternate Energy

Dependency on imported oilHigh cost of fuel and price volatilityCircular Debt

Dependency on imported oilHigh cost of fuel and price volatilityCircular Debt

Technical LossesTechnical Losses

Development issues

Development issues

SocioeconomicsSocioeconomics

Investment CrisisInvestment CrisisUncertain law and order situationLack of planning in viable projects such as LNG.Delays in implementation of projects e.g. QP , IPI and TAPI projects

Uncertain law and order situationLack of planning in viable projects such as LNG.Delays in implementation of projects e.g. QP , IPI and TAPI projects

Lack of utilization of coal reservesLess emphasis and awareness regarding use of renewable sources of energyDepleting natural resources such as gas.Lack o f exploring alternative energy options like nuclear, hydel, coal, gas etc. Development of wind and solar options

Lack of utilization of coal reservesLess emphasis and awareness regarding use of renewable sources of energyDepleting natural resources such as gas.Lack o f exploring alternative energy options like nuclear, hydel, coal, gas etc. Development of wind and solar options

Ageing of equipment and poor distribution network Ineffective utilization of installed power generation capacityWastage of energy due to line losses

Ageing of equipment and poor distribution network Ineffective utilization of installed power generation capacityWastage of energy due to line losses

Slow development of Hydrocarbon energy projects Lack of exploration activities Lack of investment in Dams and reservoirs

Slow development of Hydrocarbon energy projects Lack of exploration activities Lack of investment in Dams and reservoirs

Increasing demand due to economic progressPower generation capacities did not match demand during previous regime when consumer financing was promoted.

Increasing demand due to economic progressPower generation capacities did not match demand during previous regime when consumer financing was promoted.

Pakistan Power SectorNeed for Reforms

Drivers for reforms and recommendations


Roadmap Towards ReformThe Challenge


Roadmap Towards ReformGlobal 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.

April 10, 2023

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

April 10, 2023

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.

April 10, 2023

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

April 10, 2023

Thank You


Documents

Pakistans Power Sector Need for Reforms By Kalim A. Siddiqui President-Petroleum Marketing Byco Petroleum Paksitan Limited 4 th International Power Generation