Every government in Pakistan has a key challenge that is energy sector. The present Pakistan Muslim League-Nawaz (PML-N) administration claimed that they will put an end to crippling electricity.
The task was not as easy as government thought. They have to develop new power plants and upgrade gas supplies. The constraints would also be addressed that are upsetting the energy chain that are delaying supplies to consumers.
Though the country had adequate electricity production capacity, the outdated transmission and distribution system had been a major stumbling block that could not transmit the available electricity.
Simultaneously, the government started targeting the three areas of power generation, transmission, and distribution.
Collection of power consumption bills was not satisfactory due to extensive theft causing transmission and distribution losses.
China-Pakistan Economic Corridor (CPEC) came as a boon to recent government. Under CPEC Beijing has promised to build $33 billion worth of power generation along with transmission projects to meet shortfall in Pakistan.
So far 47 power generation projects have been completed by government that is adding around 8,694 megawatts to current installed capacity.
Data breakdown shows that in 2013 about 10 projects were completed that are supplying 474MW to the national grid. While the next year, seven more projects added 1,422MW to the system. Six projects started producing 717MW in 2015. In the next year, 10 more projects with 920MW capacity came in line.
Year 2017 gave a massive boost to electricity generation with 14 projects adding capacity of 5,162MW.
The projects included liquefied natural gas (LNG)-fired power plants in Bhikki and Haveli Bahadur Shah, a coal-fired plant in Sahiwal, Chashma-4 nuclear power plant and a power plant at Port Qasim.
As a renewable energy resource based plant, Bagasse and wind power projects added 334MW of electricity to the national grid in 2017.
Another thing that the projects for expanding the existing transmission system and laying new transmission lines have been undertaken. This project will ensure reliability and also protect against the threat of tripping of feeders.
National Transmission and Despatch Company (NTDC) have executed scores of projects, mostly in Punjab in 2014. Around 4 transmission line projects in Balochistan, 12 projects in Sindh, 29 projects in Punjab, 3 in Khyber-Pakhtunkhwa and 1 in Azad Jammu and Kashmir (AJK were completed.
Along with these encouraging developments, the inter-corporate debt has long plagued the energy chain. Pakistan Peoples Party (PPP) administration decanted around Rs2 trillion into the power sector in the name of subsidy but failed to resolve the problem. The present government too has failed to bring it under control so far.
There is an estimated circular debt above Rs450 billion, separate from around Rs400 billion of debt parked in a holding company.
Independent power producers (IPPs) even filed a case against Pakistan government in the international court for undue delay in the clearance of dues.
Pakistan State Oil has increased receivables to Rs316 billion. Power producers are the major defaulters among its clients.
In an effort to find a solution to gas shortage in Pakistan government policy has shifted turned to liquefied natural gas (LNG) imports.
Pakistan’s natural gas production is stagnant at 4 billion cubic feet per day (bcfd) for years. During the tenure of the present government over 500 million cubic feet per day (mmcfd) added from new discoveries.
Pakistan’s estimated demand is 6 bcfd. That means there are needs of 2 bcfd to plug the gap.
Particularly in winter compressed natural gas (CNG) outlets and fertilizer manufacturing plants had no alternative fuel.
However, about two and a half years ago these industries reopened after LNG imports. Gas was also supplied to power plants to ensure uninterrupted electricity supply to industrial units.
Government awarded the first LNG terminal contract to Engro in March 2015 to facilitate LNG imports. This terminal is handling 600 mmcfd of LNG, up from the initial 400 mmcfd.
Government permitted Pakistan GasPort Limited to build another LNG terminal of the same 600mmcfd capacity in November 2017. Sui Northern Gas Pipelines and Sui Southern Gas Company had an additional capacity of only 400 mmcfd.
Government focused on the utilities to enhance their pipeline capacity that has managed to increase the capacity by 1.2 bcfd.