Pakistan and Germany have initiated serious discussions of German funding of eight ongoing and new hydropower projects worth billions of dollars. These talks are taking place in Islamabad between visiting German Minister for Economic Co-operation and Development Ms. Heidemaire Wiegoreak Zeul and Pakistani Prime Minister's Adviser on Finance Mr. Shaukat Tarin, according Business Recorder newspaper.
The projects currently under discussion include 621 MW Palas hydropower project, 567 MW Spat Gah hydropower project, 28 MW Basho hydropower project, 33 MW Harpo hydropower project, 70 MW Lawi hydropower project, Naigaj hydropower project and 300 KW Hingol hydropower project, 43 KW Kurram Tangi Dam. As a start, the German Economic Minister said her country had already committed finances for Keyal Khwar hydropower project located in NWFP on river Indus at Dasu. The project would generate 130 MW power. The focus of many of these development projects are the rural areas in the North West Frontier Province and the least developed federally administered tribal areas of the country affected by insurgencies. 
Ms. Heidemaire Wiegoreak Zeul said that Germany was part of Friends of Democratic Pakistan (FoDP) and she had come here for the assessment of the situation and development needs to be discussed at Tokyo in April 17 and then again at the end of April during the annual meeting of the World Bank and IMF. She added that this support was important for Pakistan's development to stabilize the country and the region.
In addition to megaprojects such as 1000 MW Neelum-Jhelum hydropower project, a number of community-based micro hydro projects are being executed with the help of the Agha Khan Foundation in Pakistan's Northern Areas and NWFP. Within this region, out of a total of 137 micro-hydro plants, the AKRSP has established 28 micro-hydros with an installed capacity of 619kW. Initially, in 1986, these plants started as research and demonstration units. These projects were extended to Village Organizations (VOs) and became participatory projects. A Village Organization (VO) is a body of villagers who have organized themselves around a common interest.
After formation, each village organization signed a partnership with AKRSP to abide by all terms and conditions necessary for the village development. The entire responsibility of implementation was passed on to the VOs. AKRSP provided the negotiated cost of the plants and technical input required during the construction period. All the VOs completed the civil work of the plants. They purchased and transported machinery from other parts of Pakistan. The VO members provided subsidized or free unskilled labour and locally produced building material.
Pakistan's current installed capacity is around 19,845 MW, of which around 20% is hydroelectric. Much of the rest is thermal, fueled primarily by gas and oil. Per capita energy consumption of the country is estimated at 14 million Btu, which is about the same as India's but only a fraction of other industrializing economies in the region such as Thailand and Malaysia, according to the US Dept of Energy 2006 report. To put it in perspective, the world average per capita energy use is about 65 million BTUs and the average American consumes 352 million BTUs.
The electric power situation in India is not much better. The country is suffering its worst electricity crisis and it has become a key election issue in states like Karnataka and Maharashtra. Some major cities in India are facing alarming situations; continuous load shedding in Bangalore has led to diesel shortage as people are using diesel generators to deal with the crisis. Maharashtra, Uttar Pradesh, West Bengal and Haryana are the worst hit by the ongoing crisis and they are facing power gaps of about 5,000MW, 1,000MW, 2000MW, 1,500MW respectively. In Maharashtra, state officials are asking industrial consumers to lower their demand by 10% or be ready to face forced load shedding (rolling blackouts). Cities and towns are facing 7 to 13 hours blackouts.
With 40% of the Pakistani households that have yet to receive electricity, and only 18% of the households that have access to pipeline gas, the energy sector is expected to play a critical role in economic and social development. With this growth comes higher energy consumption and stronger pressures on the country’s energy resources. At present, natural gas and oil supply the bulk (80 percent) of Pakistan’s energy needs. However, the consumption of those energy sources vastly exceeds the supply. For instance, Pakistan currently produces only 18.3 percent of the oil it consumes, fostering a dependency on expensive, imported oil that places considerable strain on the country’s financial position, creating growing budget and trade deficits. On the other hand, renewable energyfrom hydro, wind and solar are perhaps underutilized and underdeveloped today, as Pakistan has ample potential to exploit these resources.
Pakistan has vast reserves of coal. But there is very little energy produced by burning coal. China has now agreed to invest about $600 million for setting up an integrated coal mining-cum-power project in Sindh. The project will produce 180 million tons of coal per year, which is sufficient to fuel the proposed 405 MW power plant. Pakistan is currently world's seventh largest coal-producing country, with coal reserves of more than 185 billion tons (second in the world after U.S.A.'s 247 billion tons). Almost all (99 percent) of Pakistan's coal reserves are found in the province of Sindh. Pakistan's largest coal field is Thar coal field which is spread over an area of 9100 square kilometers, and contains 175 billion tons of coal. So far this coal field has not been developed but efforts are underway.
In addition to the coal project, China has agreed to build several other power plants in Pakistan to help the South Asian nation deal with its worsening electricity crisis. When completed over the next several years, these plants, including Nandipur (425 MW, Thermal), Guddu(800 MW, Thermal) and Neelam-Jhelum(1000 MW, Hydro), Chashma (1200 MW, Nuclear) will add more than 3000 MW of power generating capacity for the energy-hungry country. Pakistan is currently facing a deficit of 4,000 to 5,000 megawatts, resulting in extensive load-shedding (rolling blackouts) of several hours a day.
China has already installed a 325-megawatt nuclear power plant (C1) at Chashma and is currently working on another (C2) of the same capacity that is expected to be online by 2010. The agreements for C3 and C4 have also been signed. The United States has objected to China supplying C3 and C4 on the grounds that any Pak-China nuclear cooperation would require consensus approval by the NSG, of which China is now a member, for any exception to the guidelines. The US is applying double standards since it supported and got approval for such an exception from NSG for its own nuclear deal with India.
Beyond the power generation capacity expansion projects, Pakistan must also pay attention to modernizing its national grid. The country's creaky and outdated electricity infrastructure loses over 30 percent of generated power in transit, more than seven times the losses of a well-run system, according to the Asian Development Bank and the World Bank; and a lack of spare high-voltage grid capacity limits the transmission of power from hydroelectric plants in the north to make up for shortfalls in the south.
The current power crisis has given a significant impetus for serious efforts to develop a series of power projects. With so many projects in the pipeline, it can be expected that there is relief on the way for the electricity deprived nation in not too distant a future. In rural areas in particular, Pakistan has a better chance of meeting the UN Millennium Development Goals by building infrastructure projects and providing energy and water for development.
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1 year ago
23 comments:
Why exactly are the Germans funding the destruction of two nature reserves? Palas is home to a dwindling population of Monal pheasants while the Hingol River contains Pakistan's last concentration of large wild Mahseer and Mugger crocodiles. Have environmental impact surveys been done for any of these projects? Several are in pristine areas. Will they be forced to adhere to EU environmental standards? If not, then why?
batholith,
This debate between satisfying basic human necessities versus preserving biodiversity is playing out all over the world. But in a nation where 40% of the population has no access to safe water and electricity, I would err on the side of catering for basic human needs while still doing the best to protect nature.
Riaz,
The point is not that development should not be pursued but that it must be done with insight. Are there no other ways of generating renewable energy? There are. Are there no other places to build dams where their impact would be lower? There are. How will these dams in the far North be connected to the national grid through a tectonically active zone? Has Pakistan managed to relocate those people who were displaced by the building of previous dams? No.
As far as water is concerned, if we are concerned about its scarcity, why are so many canals in Pakistan still unlined? Why are canals being lined with unburnt brick? Why do farmers still follow inefficient irrigation techniques? There is an old UNDP report claiming that these improvements would result in saving a greater quantity of water than the total storage capacity of Tarbela.
If it is water quality we are concerned about, why does industrial effluent flow into rivers untreated? Why are outlawed pesticides and herbicides still freely available?
The question,then, is, where would the application of limited funds be more productive for finding long term solutions to the problems at hand?
babolith,
I am not aware of the specifics of the locations you are concerned about. But, living in the US, I know that there is a powerful lobby advocating for preservation of nature, biodiversity and environment. But the US is at a very stage of development and 100% of the population has access to electricity and clean water. So Sierra Club is not out of place.
Pakistan is in a very different situation. The nation has severe shortages of both electricity and water. In my humble opinion, closing any options such as developing some pristine areas you point out is not a good idea. However, sufficient care should be taken to minimize negative impact to nature and environment without shutting down such projects.
Riaz,
Having lived a big chunk of my life in the Eastern Sierra, I know where you're coming from. But lets not forget that the first National Parks in the US came into being during Teddy Roosevelt's days, well before development reached the bulk of the rural areas. John Muir was active in the Sierra around the 1870's and the Sierra Club was founded in the 1890's. Remember that its opposition to the development of the dam in Hetch Hetchy dates to the early 1900's. This was then taken up again in the 1980's when Reagen, of all people, agreed to demolish the dam (which ended up not happening).
But, as you say, this debate is one that will continue deep into the future. Hopefully, there will still be something left to preserve then.
I completely second batholith, and this applies even more for India where the environment and people's livelihoods are being destroyed at an even faster rate.
http://vikramvgarg.wordpress.com/2009/03/05/we-are-committing-environmental-suicide-in-the-name-of-development/
PM inaugurates Pakistan’s first wind power project (Daily Times April 20, 2009)
* Gilani says 24 similar projects underway
* Hopes mid-term renewable energy policy document will get cabinet’s approval
JHIMPIR: Prime Minister Yousuf Raza Gilani on Sunday inaugurated Pakistan’s first-ever wind energy scheme – the 50-megawatt ‘Zorlu Energy Wind Power Project’ – and said the government has created a fund to mainstream and implement alternative energy technologies in the country.
“The fund will be used partially to finance economically viable projects … and for the much-needed capacity building of the renewable energy sector,” said Gilani at the inauguration – which was attended by Sindh Governor Dr Ishratul Ibad, Chief Minister Qaim Ali Shah, Federal Minister for Water and Power Raja Pervaiz Ashraf and the water and power secretary.
The prime minister said that the Alternative Energy Development Board (AEDB) – in collaboration with public and private stakeholders – had prepared a mid-term renewable energy policy document. He said the policy focussed on creating a feasible environment for power generation through renewable energy means in the country. “I hope the policy will be submitted to the cabinet and approved soon,” he said.
“The launch of the Zorlu wind farm is, indeed, a major milestone towards exploiting the wind potential of renowned Gharo-Keti Bandar Wind Corridor. This 60 kilometre long and 170 kilometre deep corridor alone has the potential to generate over 50,000 megawatts of electricity,” he said.
The prime minister said the launch of the project had heralded the beginning of a new era in Pakistan.
“We are keen … to reduce dependence on imported fossil fuel, control environmental pollution and achieve sustainable energy security,” he added.
“I am proud to narrate that apart from the Zorlu wind farm, 24 other wind projects, with a cumulative capacity of 1,200 megawatts, are under way.”
He also praised the Zorlu Energy Group for its plan to expand the project to 250 megawatts. “This will also send a very strong signal … that Pakistan offers great opportunities to do business and investment.” app
Power sector has been holding Pakistan back in recent years. Here's BMI assessment of energy sector prospects:
The new Pakistan Power Report forecasts Pakistan will account for 1.37% of Asia Pacific regional powergeneration by 2013, with a stable theoretical generation surplus before the country’s substantialtransmission losses are taken into account. BMI’s Asia Pacific power generation assumption for 2008 is7,093 terawatt hours (TWh), representing an increase of 3.2% over the previous year. We are forecastingan increase in regional generation to 9,099TWh by 2013, representing a rise of 28.3%.
Asia Pacific thermal power generation in 2008 totalled an estimated 5,570TWh, accounting for 78.5% ofthe total electricity supplied in the region. Our forecast for 2013 is 6,999TWh, implying 25.7% growththat reduces the market share of thermal generation to 76.9% - thanks largely to environmental concernspromoting renewables, hydro-electricity and nuclear generation. Pakistan’s thermal generation in 2008was an estimated 62.8TWh, or 1.13% of the regional total. By 2013, the country is expected to stillaccount for 1.13% of thermal generation.
For Pakistan, gas is the dominant fuel, accounting for 47.5% of primary energy demand (PED) in 2007,followed by oil at 30.7%, hydro-electric energy at 12.9% and coal with a 7.9% share. Regional energydemand is forecast to reach 4,859mn tonnes of oil equivalent (toe) by 2013, representing 24.9% growthfrom the estimated 2008 level. Pakistan’s estimated 2008 market share of 1.52% is set to ease to 1.45%by 2013. The country’s estimated 2.5TWh of nuclear demand in 2008 is forecast to reach 5.0TWh by2013, with its share of the Asia Pacific nuclear market rising from 0.49% to 0.75% over the period.
Pakistan is ranked third behind India in BMI’s Power Business Environment Rating, thanks to itsrelatively high level of renewables (mostly hydro) generation and healthy power consumption/energydemand growth prospects. Several country risk factors offset some of the industry strength, but thecountry is in a good position to keep clear of Malaysia below.
BMI forecasts Pakistan real GDP growth averaging 3.98% a year between 2009 and 2013, with the 2009estimate at 2.50%. The population is expected to expand from 161mn to 177mn, with per capita GDP andelectricity consumption increasing by 20% and 11% respectively. Power consumption is expected toincrease from an estimated 81TWh in 2008 to 99TWh by the end of the forecast period, which provides arelatively stable theoretical generation surplus (before transmission losses, etc.), assuming 4.3% annualgrowth in electricity generation.
Between 2008 and 2018, we are forecasting an increase in Pakistani electricity generation of 59.2%,which is mid-range for the Asia Pacific region. This equates to 27.2% in the 2013-2018 period, up from25.1% in 2008-2013. PED growth is set to increase from 19.1% in 2008-2013 to 25.8%, representing49.9% for the entire forecast period. An increase of 49% in hydro-power use during 2008-2018 is a keyelement of generation growth. Thermal power generation is forecast to rise by 52% between 2008 and2018, with nuclear usage up 380% from a low base. More details of the long-term BMI power forecastscan be found at the end of this report.
Here's a recent Daily Times report about Bhasha Dam in Pakistan:
ISLAMABAD: Deputy Chairman Planning Commission, Sardar Asef Ahmad Ali on Thursday said some changes had been made in Bhasha Dam project, particularly in its power component. In an exclusive interview with Daily Times he said the power component of Bhasha Dam would be run on Public Private Partnership basis so that burden on the government kitty might be reduced. In this regard he said that a ‘Company’ would be established, which would be converted into an international consortium. The consortium would be able to get equity as well as funds from the International Financial Institutions (IFI), Kuwait Funds and others.
Once the Company is established, he said that there would be no problems for funding, as it would be able to borrow from the market and repay the loan. “The government has assigned me to structure the Company,” the Deputy Chairman said and added that he would invite all power distribution companies including KESC to purchase its shares. The government and WAPDA might also purchase its share and later, expatriates would also be offered shares in it. In this manner, it would enjoy the status of an International Company. Its marketing plan would be carried out at world-class top companies and arrangements would be made to conduct internationals show for it. In this way, all requirements for making it an ‘Equity’ would be fulfilled, he added. All these measures have been carried out for the first time in Pakistan.
About PSDP (Public Sector Development Programme) he said that as a routine, the government releases 19 to 20 percent developmental funds in first quarter of the current fiscal year (July-September 2009). Reason for low allocation was the slow process of revenue generation through new measures adopted in the annual budget. PSDP releases for second quarter (Oct to Dec 2009) was already in progress. If the funds are released in time, he expressed hope that the government would be able to achieve its targets. At present, he said there was no indication by the ministry of finance regarding cut in PSDP 2009-10.
Currently the country’s revenue generation remained stagnant at 8.5 percent of the GDP, which he termed as lowest in the world. The government wanted to increase it to the level of 11 percent of the GDP. “Finance Minister Shaukat Tareen informed me that the government identified 2 million new taxpayers in the existing system and if it remains successful, then the PSDP will be remain as it is”, he maintained.
There have been widespread complaints in Islamabad, including by Finance Minister Shaukat Tarin, that the government had solutions to improve the power output but was refusing to implement them in order to benefit a handful of power plant operators, such as those supplying rental power at exorbitant rates, while the IPPs are not being paid for supplying power from currently underutilized installed capacity. Requests for information by Transparency International Pakistan regarding rental power contracts have been ignored by the Ministry of Water and Power. There are widespread corruption allegations against Mr. Zardari personally who has influenced the award of the 783 MW rental power contracts to a former governor of Oklahoma and his Pakistani partner.
Here is an excerpt from a recent report from Pakistan Economist about rental power in Pakistan:
Pakistan People's Party led coalition government has opted the option of using Rental Power Plants (RPPs) to overcome persistent electricity crisis that is not only causing great amount of hardships for the fellow citizens but also hitting hard to country's economy. There is much hue and cry from political and other circles over alleged kickbacks in deals of RPPs. Pakistan Muslim League-Nawaz has already announced to issue a White Paper on RPPs while another opposition party-Pakistan Muslim League (Q)- is also at the forefront in highlighting alleged wrongdoings in the execution of RPPs. Sources in PEPCO told PAGE that RPPs would provide electricity at a quick speed compared to IPPs which will reduce power deficit on an emergency basis. These rental projects are for five years and its costing responsibility rests with private sector investors.
The contract life of these projects is between 3-5 years, after which the government has no obligation to purchase power from these units. According to them, it is incorrect to suggest that rental power costs are substantially higher than that of IPPs. Due to different tariff of rental plants, even after taking into account the high fuel costs, the cost difference is almost equal or marginally higher in case of RPPs. Compared with IPPs, RPPs power generation cost ranges between 12-13 cents per KWh, and IPPs' power generation costs approximately 12 cent per KWh. Government circles are of the view that mere blame game is going on just for the sake of leg pulling. There is nothing wrong in RPPs and the only viable option to get rid of load shedding is rental power plants, they believe. They said rental tariffs for the projects depended on number of factors including location of the plants, system maintenance, and consumption of fuels. Others factors are variation in project cost due to difference in technology, age of machinery, and variations in financing. As many as, 14 approved RPPs with total generation capacity of 2250MW will start functioning by December, which would expectedly end the energy crisis.
However, critics of RPPs are of the sanguine view that highly controversial RPPs are proving last resort to overcome the power crisis, which has hit hard the economic growth of the country besides adding salt to public miseries at large. The political government has surrendered to public pressures on construction of Kalabagh Dam, the only way to survive ahead and instead preferred to go after a stopgap arrangement at a higher cost. The independent experts are of the view that RPPs would not only fail to meet rising electricity demand but also burden the national exchequer in general and power consumers in particular. The public is justifiable in questioning that if RPPs are the option, why it is adopted too late. According to Pakistan Electric Power Company (Pepco) Managing Director Tahir Basharat Cheema, an investment of around US $2 billion is expected in power sector through RPPs. Apart from investment in power sector, additional electricity of 1675 MW will be added in the system by December 2009 when nine rental power projects will start generation.
However, overall 2250 MW electricity will be generated through RPPs in current fiscal year (2009-10). Two rental power projects that have already started generation include Atlas Power (213 MW) and Attock Generation (156 MW) while remaining seven will start functioning by December 2009. These RPPs include Nishat (196 MW), Engro (203 MW), Saif Power (213 MW), Fauji Foundation (176 MW), Sapphire Electric Company (213 MW), and Orient Power Company (213 MW). He said all proposals of RPPs were accepted only with bid bonds and performance guarantee by sponsors.
Here's a blog post about "Power Politics" on "Teeth Maestro". It was produced by Center for Research and Security Studies:
Two questions: why have some private power producers completely shut down? Why are private power producers operating way below their full generating potential? Two answers: political score-settling plus the circular debt.
We at the Centre for Research and Security Studies (CRSS) have been trying for months to ascertain the crux of our power politics. Almost all roads lead back to the government. The federal government is the largest power defaulter, then come the four provincial governments, FATA, the KESC and the KW&SB. This is how the circular debt explodes into even bigger circles: the federal government does not pay its electricity bills to Water and Power Development Authority (WAPDA).
WAPDA is then unable to pay for electricity it buys from IPPs. IPPs are then unable to pay for their oil supplies. Refineries, short on cash, are unable to pay their foreign suppliers. Grow, grow, grow and we have a Rs200 billion time bomb.
Welcome to the rental power bonanza; the government’s ingenious – canny, crafty and cunning – all-in-one solution for the crux of our power politics. What we need to do is to re-start the power producers that are shut down. That’s 800 MW at US 11 cents per MW. What we need to do is to resolve our circular debt puzzle. What we need to do is to get our sugar mills connected to the national grid which could generate an additional 2,200 MW at less than US 11 cents per MW.
Here' Reuter's analysis of rental power in Pakistan:
Aides of Finance Minister Shaukat Tarin said he almost resigned after failing to persuade the cabinet against renting, an option he considered expensive and inefficient.
Here are some questions and answers about the plight of the power sector in Pakistan and leasing plants.
WHAT IS THE PROBLEM?
Pakistan has about 20,000 MW of installed power production capacity, but that falls short of demand by roughly 4,000 MW. Lengthy power cuts, dubbed load shedding, have become commonplace.
Past governments failed to anticipate the growth in demand and delayed clearing power project proposals and big dam projects that would have boosted hydro power.
Lack of investment in existing plant, outdated grids and rampant electricity theft mean that some grid companies experience line losses of up to 30-40 percent, analysts say.
Many independent power producers (IPPs) operate well below capacity because they cannot pay their fuel bills regularly as grid companies owe them money.
The crisis has crippled industry, notably textiles, the main export sector and largest employer in the manufacturing sector.
There have also been violent protests that some analysts see as a bad omen both for the government and democracy in a country struggling to contain the growth of Islamist militancy.
WHAT IS BEING DONE TO BOOST SUPPLIES?
The 18-month-old civilian government has vowed to increase supplies but needs huge finances.
It recently reached an agreement with the World Bank and Asian Development Bank to phase in power tariff increases.
The government is working on a multi-pronged strategy to address the problem through building new dams and setting up new permanent power plants. It sees Rental Power Plants (RPPs) as the "only solution", while completing medium and long-term projects.
WHAT IS RENTAL POWER PLANT?
Countries can hire power units from overseas manufacturers that can be shipped in kit form and installed.
It takes four to six months to set up a rental unit, while two to five years may be needed for an Independent Power Producer to build a plant.
Surging emerging economies like China and Turkey have gone the short-term rental route to bridge power supply gaps. And Pakistan, according to official documents, had two rental units commence operation in 2007.
Under the new plan, additional RPPs would be set up to generate 2,250 MW by the end of the year.
HOW WILL RENTAL POWER PLANTS IMPACT FUEL DEMAND?
The rental power plants would increase the Pakistani power sector's furnace oil needs by 29 percent, driving up its import bill and adding to pressure on the rupee and currency reserves.
Pakistan requires 35,000 tonnes a day to feed its thermal power plants and the installation of the RPPs will increase demand to 45,000 tonnes, officials say.
The country imports about 80 percent of its oil. It spent $9.5 billion on the import of 10.6 million tonnes of petroleum products and 7.8 million tonnes of crude oil in the 2008/09 (July-June) financial year.
WHAT ARE THE PROS AND CONS?
Rental plants can provide breathing space for Pakistan to focus on medium- and long-term projects.
Advocates say rental plants are efficient, will help quickly meet growing needs, and end-consumers will pay the same or a bit less for their electricity.
Opponents say the mostly second-hand equipment will be less efficient and that the tariff will rise. They argue that the government would be better off spending money on upgrading and using idle existing capacity.
Some opponents also say the option is being supported by corrupt politicians hoping for kickbacks.
Here is an explanation offered by the News for gas and CNG shortage in Pakistan:
ISLAMABAD: The multi-million dollar mystery shrouding the serious shortage of gas in the country, which has already led to twice a week closure of CNG stations, seems to have finally been resolved, as millions of cubic feet of gas per day is now being supplied to powerful owners of the controversial rental power plants in the country as the Economic Coordination Committee of the Cabinet meeting on Tuesday (tomorrow) has been asked to approve additional supplied for these plants.
The official sources said these expensive rental power plants, which were being installed with tall claims to address the energy crises in the country, were said to have now become one of the major reasons behind a new sorts of energy crises in Pakistan, as their gas requirements are bound to hit other sectors of economy running on gas supplies. The cement sector has already been hit as its gas supply is now being diverted to one such power plant at Naudero.
Under the agreed deal which was subjected to criticism both within and outside the Parliament, these rental power plants will continue to get gas supplies for five years till the completion of their agreements with the Ministry of Water and Power.
The formal approval of this gas supply is being given in the Economic Committee of the Cabinet (ECC) meeting tomorrow (Tuesday). Finance Minister Shaukat Tarin will preside over the meeting as Petroleum Minister Naveed Qamar is out to get the approval for these plants as proposed in the official summary of his ministry.
The sources said the supply of gas would become a huge issue in the coming days for even the domestic consumers after the government would divert more gas to these rental power plants after diverting it from the sectors which were now regularly getting the supplies. Now ECC was asked to give supply of gas only for one plant. Sources said, more demands from other power plants will soon follow and then the country would really experience the burden of these power plants, which were ironically being installed to address the very energy crises of the country.
The official papers to be laid in the ECC meeting revealed that the gas meant for the cement sector in particular was being drastically reduced and diverted to the rental power plants in the country. One source said, certain other sectors which are already getting the gas in the country soon may also face similar kind of cuts in their approved supply to accommodate the privileged and powerful owners of the plants having direct links at the top levels.
The huge gas supply is being supplied as a part of deal struck with these rental power plants by the Ministry of Water and Power in controversial circumstances.
According to the official papers to be tabled in the ECC meeting, the Ministry of Petroleum was now seeking the approval of diversion of gas from cement to power plants and initially a power plant of 51 MW was being provided with 30MMCFD. The papers said earlier the ECC has decided on October 2 to place 12 MMCFD gas from SSGC system at the disposal of PPIB/Ministry of Water and Power for five years for power generation in accordance with the natural gas allocation and management policy of 2005. The official summary said the Ministry of Water and Power have now informed that 12 MMFCD gas been allocated to the power plants project.
The summary said, based on SSGCL commitment, it is proposed that 15 MMCFD additional gas from SSGCL system which includes diversion of 14MMCFD gas being supplied to cement sector may be placed at the disposal of PPPB/ Ministry of Water and Power on the “ as and when available basis for five years” for power generation subject to following conditions.
Here are some excerpts from Fareed Zakaraia's interview with US Energy chief, Nobel Laureate Dr. Stephen Chu:
"I see the cost of [solar] photovoltaics going down and down. Right now it's about $4 per watt for full installation. In a decade it will certainly be less than $2. If it's $1 or $1.25, then everyone will put it up without subsidy. What else do I see? A new generation of biofuels that are direct substitutes for gasoline—so, better than ethanol—using agricultural waste: weed straw, rice straw, corncobs, wood surplus."
"We're at about 4 percent now (renewables sources). President Obama made a target to double that by 2012, and we are on target. I expect that to continue. In 10 years' time we hope to have carbon-capture-and-sequestration technologies starting to be deployed. Hopefully, we'll have restarted the nuclear industry and we'll be building several nuclear reactors."
Wake up Pakistanis! As we all know that Pakistan is distress from electrical vitality destitution but why Dam makeup venture immobile on paper?it is truly more esteemed to every component of Dam makeup Project as an alternative more on overseen projects. At the point we are standing today as a nation, its time to accomplish a thing to receive out of us from such a wretched condition.
Here's a piece on plans for wind turbine domestic manufacturing in Pakistan published in Dawn:
PROPOSALS for local manufacturing of wind turbines and allied equipment on commercial basis from foreign and domestic companies for partnership with Pakistan Machine Tool Factory (PMTF) at Karachi are in advanced stage of evaluation. The initiative has been launched by the State Engineering Corporation.
In July 2009, the expressions of interest (EOIs) were invited by the Corporation internationally. World reputed manufacturers in the USA, China and the European countries were also contacted directly seeking their collaboration for progressive manufacturing of wind turbines.
Enormous potential for power generation from wind energy has been identified in various parts of the country.. In 2006, the Alternate Energy Development Board (AEDB) had announced an attractive investment policy for promotion of renewable energy and many manufacturers of wind turbines like GE Energy (Canada), Vestas (Denmark) and Siemens/Fuhrlander (Germany) had shown interest in setting up wind farm projects in partnership with domestic entrepreneurs.
This is not for the first time that efforts have been made for manufacturing of machinery for wind mills. In response to the Energy Policy 1994, two wind power projects were proposed to be established in Sindh and Balochistan. The American sponsors of Kenetech wind power project of 100 mw capacity, who are also the manufacturers of wind turbines, had collaborated with the PMTF for local manufacturing of wind turbines, under technology transfer arrangement. No physical progress was achieved as none of the projects was approved by the government, courtesy the powerful lobby of oil-based thermal power plants.
Again, in 2006, Heavy Mechanical Complex (HMC) planned to diversify its wide-range production programme of power plant machinery to cover wind energy projects as well. The pioneering efforts by HMC to obtain requisite technology for one or two megawatt capacity wind turbine from any global key player however, were thwarted by the AEDB, which instead supported private sector participation for local manufacturing. The AEDB had claimed to have signed agreements with a few Western companies for the design, engineering and manufacturing of wind turbines and accessories. Based on these agreements the AEDB was said to be looking for qualified companies to commence assembly-cum-manufacturing of equipment locally. Nothing happened.
In the recent past, New Park Energy Limited proposed to establish a wind turbine generator assembly plant at Nooriabad, Dadu. The sponsor has obtained approval for the development of a wind farm of 1,000 mw in phases, the first phase project being of 400 mw capacity.
The government has allocated 1,000 acres of land to the company in the Gharo-Keti Bunder wind corridor on concessionary rates. The first wind energy project was thus launched in December 2004, but only of 45 mw capacity, proposed to be installed with 30x1.5 mw General Electric (GE) wind turbines. The project, which was to attain commercial operations in 2007, still remains on paper and even the Letter of Support (LOS) has not yet been obtained by the sponsors, despite a lapse of five years......
If the indigenisation programme is successfully implemented it would prove to be precursor for rapid development of the wind power projects for its low cost, high reliability and for being environmental friendly. India has over 10,833 mw installed wind power capacity, as in September 2009, with majority of wind turbines produced locally. Today, India has nine principal manufacturers and suppliers of wind electric generators in the range of 225 kw to two mw units.
China has offered to invest about $15 billion in Pakistan’s energy sector projects, according to Dawn News:
A Chinese delegation led by Cao Guanging, chairman of the state-owned China Three Gorges Project Corporation (CTGPC), discussed the Kohala, Bunji, Bhasha, Dashu and other hydropower projects in the upper and lower Indus valley during a meeting with Finance Minister Dr Abdul Hafeez Shaikh on Wednesday.
Dr Hafeez welcomed the offer and said he would try to develop consensus on issues relating to the projects. He said he would consult with the ministries of water and power and law and justice to sort out legal and other issues.
He informed the delegation about the country’s bidding rules and laws and assured it that the bidding process would be held in a transparent manner.
He said the Chinese offer had been discussed at a recent meeting of the Economic Coordination Committee of the cabinet. He said the projects identified by the CTGPC would be taken up with it but only after the completion of procedural matters.
The Chinese offer to provide financial and technical assistance for hydel and wind power projects, upgrade the transmission system and provide an integrated solution to the problems of power shortage and disruptions was elaborated by the CTGPC delegation at the Aiwan-i-Sadr on Wednesday.
Presidential spokesman Farhatullah Babar said in a statement that President Asif Ali Zardari had advised the government to consider tasking the CTGPC with building a run-of-the-river hydro project at Sukkur Barrage and asked Water and Power Minister Syed Naveed Qamar to discuss the project with the sections concerned and prepare a proposal in two months.
The president said that agreements with China ensured full security of Chinese investments in Pakistan. He said the true potential of business partnership between entrepreneurs of the two countries had yet to be fully realised.
Mr Babar said the CTGPC was already involved in a number power projects in the country and offered to build more to address the problems of power shortage. He said the corporation was currently undertaking Karot, Taunsa, Kohala and Bunji hydro-electric power projects. A letter of intent for the 720MW Karot project has been issued after the approval of its feasibility study. The project is currently at the tariff petition stage.
A memorandum of understanding for the 120MW Taunsa hydro-eclectic project has been signed and a development agreement will be signed this month. Mr Babar said the 1,100MW Kohala project was ready for tariff negotiations. A letter of intent for the project has already been issued after the approval of its updated feasibility study.
The 7,100MW Bunji project is ready for site survey. The MoU for the project was signed in August 2009.
Mr Babar said that wind power projects, including Sindh’s first and second wind farms and Punjab’s wind and solar projects, were also in an advanced stage.
Here's a Business Recorder news report on delays in Neelum-Jhelum construction project:
The pace of work on the important Neelum Jhelum hydroelectric project is very slow, as only 22 per cent work has been completed so far against the targeted 50 per cent. The detailed feasibility study of the 969 MW project was completed in 1997 and the revised Project Cost-I (PC-I) was approved by Executive Committee of the National Economic Council (Ecnec) on February 28, 2002 at a total cost of Rs 84502.26 million.
The work on the project was started in January 2008 and October 2015 was fixed as completion date. By 2011, about 50 per cent work was to be completed, however, only 22 per cent work has been completed so far, making it difficult the project would be completed on time, sources told Business Recorder.
Subsequent to the 2005 earthquake the PC-1 was revised again, which also affected the cost of the project and its completion period. They said after passage of almost half period of the project only 22 per cent work has been completed, which shows slow pace of work on the project.
Sources further revealed that till June 30, 2010, a sum of Rs 16897.243 was spent on the construction of the dam. In 2010-11's Public Sector Development Programme, Rs 14700 million were allocated and only Rs 3953.244 million have been spent so far. While a total amount of Rs 20850.487 million has been spent on the project so far.
Total required land for the project is 3400 Kanals and land awarded to Wapda is 3300 Kanals with another 100 Kanals required for which land acquisition process is underway. In addition there is an issue of transfer and possession of 26 Kanals that has not yet been handed over by the AJ&K government which is also causing delay in completion of the project.
Source maintained that if the project was not completed on time, the total cost of the project could increase as the cost of raw materials was increasing day by day. They added if the government was serious about resolving the electricity shortages then it should take appropriate measures to ensure timely completion of the project.
http://www.brecorder.com/component/news/single/595:news.html?id=1189959
Here's an Express Tribune update on Neelum-Jhelum hydroelectric project:
ISLAMABAD: As Water and Power Development Authority (Wapda) completes 28 per cent work on the 969MW Neelum-Jhelum Hydropower Project, the cost of which has gone up from Rs84 billion to Rs333 due to inordinate delay, Pakistan is pushing China to release the promised $500 million loan to bridge the shortfall of funds.
The cost of the project has increased after it was redesigned in the wake of the 2005 earthquake. Work on the project is progressing but the shortfall of funds and issues in land acquisition are still problems that need to be addressed to complete the project.
Wapda has also had to procure two Tunnel Boring Machines (TBMs) at the cost of Rs17 billion to overcome the delay of two and half years. “We will be able to reduce implementation time by two years by using TBMs that are expected to reach Karachi by January 25, 2012,” sources said.
Average completion level on the project is 28%. Some areas are progressing better, like the powerhouses, which are at 40% completion.
In the powerhouse, four turbines with a capacity of 242MW each will be set up. A separate plant of 45MW will also be set up at the diversion tunnel which was completed on October 15. A total of 60 kilometres of tunnels have to be completed including 35.6 kilometres of tunnels needed to push water to drive the turbines.
“As much as 17 kilometres have been completed,” sources said adding that work was underway on the coffer dam that is expected to be completed by February next year.
Sources said that a consortium of six banks including Exim Bank of China is providing financing for the project. “We are pushing Exim Bank of China to extend a $500 million loan to bridge the shortfall of funds,” sources said adding that other banks in the consortium were also being asked to extend additional $700 to $800 million loans.
The project cost has escalated on different accounts including Rs38 billion due as interest on loan, Rs45 billion on account of depreciation of rupee against dollar, from Rs45 to Rs86. Further cost increases were because of rate of land acquisition and procurement of two TBMs that cost Rs17 billion.
The government is to procure total 3,900 kanals of land out of which about 68 kanals is still outstanding, including the crucial portion of about 18 kanals for which payment of Rs1.2 billion has already been made to the AJK government.
“Despite payment, local people are reluctant to hand over land which may further delay the completion of the project,” sources added.
http://tribune.com.pk/story/302326/neelum-jhelum-project-pakistan-pushes-china-to-release-promised-500m/
Privately owned Star Hydro Power's Pakistani project receives funding, according to Hydro World:
ISLAMABAD, Pakistan 12/20/11 (PennWell) -- Star Hydro Power Limited has been awarded a loan worth US$60 by the International Finance Corporation (IFC) for construction of the 147-MW Patrind hydropower plant in Pakistan.
The $409 million run-of-river project will be the largest privately financed hydroelectric facility in the country when it is completed in 2016, according to an IFC release.
Other investors include the Islamic Development Bank, the Export-Import Bank of Korea and the Asian Development Bank.
ADB previously announced a pledge of $97 million to the project in October 2011.
The project will be located between the Kunhar and Jhelum rivers near Muzaffarabad.
http://www.hydroworld.com/index/display/article-display/1544077455/articles/hrhrw/hydroindustrynews/newdevelopment/2011/12/star-hydro_power_s.html
Here's an Arab News report on Islamic Dev Bank funding a hydroelectric project in Pakistan:
JEDDAH: The Islamic Development Bank (IDB) has signed a $60 million lease finance deal with Pakistan for the development of the Patrind Hydropower Project.
The agreement was signed by Ahmed Al-Hariri, manager, country operations division, Southeast Asia and Farouk Javed, CEO, Star Hydropower Limited in Islamabad.
The power plant is expected to be completed by 2016 and add 147 MW of power to the country’s national grid, helping the Asian country increase utilization of its renewable resources and generate power in an economically sustainable manner to reduce dependency on imported fuel.
“The project represents 100 percent foreign direct investment (FDI) in the country. After 30 years concession period the project will be handed over to the government of Pakistan,” a statement on the South Asian News Agency (SANA) said.
According to data from the IDB, Pakistan is the second-largest beneficiary of IDB financing.
Since the bank’s inception in the mid-1970’s the multi-lender has committed $7.6 billion including 85 projects worth $2.2 billion mainly in the transportation and power-generation sectors to the country.
In addition to the financing being committed by the IDB, funding is also being provided by the Export-Import Bank of Korea, the Asian Development Bank and the International Finance Corporation for a total injection of nearly $400 million for the project.
The project, according to a study carried out by its sponsors, Star Hydropower Limited, will call for the resettlement of 28 residences in the small village of Patrind on the Kumhar River.
“In Pakistan the increasing demand for electric power is now outstripping the supply. The gap between supply and demand has resulted in load shedding, causing serious setback to national economy. To close this gap, different possibilities for electrical power generation have been identified including a series of hydropower projects,” the report stated.
http://arabnews.com/economy/article555273.ece
German tunnel boring machines (TBMs) worth Rs 8bn to reach Pakistan by end of Jan 2012 for Neelum-Jhelum dam project, reports Daily Times:
LAHORE: The Water and Power Development Authority (WAPDA) is installing two tunnel boring machines (TBMs) at a cost of Rs 8 billion on 969 megawatts (MW) – Neelum-Jhelum Hydropower Project to reduce construction period of the project by about 18 months aimed at estimated benefit of Rs 60 billion.
The two German-manufactured TBMs, being imported by the contractor, are expected to reach Pakistan by the end of this month.
WAPDA Chairman Shakil Durrani stated this while briefing the Azad Jammu and Kashmir (AJK) Prime Minister Chaudhry Abdul Majeed, and Planning Commission Deputy Chairman Dr Nadeem-ul-Haq during their visit to Neelum-Jhelum Hydropower Project components including underground powerhouse, weir site, diversion tunnel, de-sander and main tunnels etc. Federal Secretary Planning Asif Bajwa, AJK Chief Secretary Muhammad Shahzad Arbab, Planning Commission Member Energy Shahid Sattar, WAPDA Member (Water) Raghib Abbas Shah, Member (Power) Muhammad Qasim Khan and senior officers concerned were also present during the visit.
http://www.dailytimes.com.pk/default.asp?page=2012\01\14\story_14-1-2012_pg5_16
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