Featured Pakistan: Hopes Rise For Cheap and Abundant Electricty

[RiazHaq]

http://www.riazhaq.com/2020/08/pakistan-hopes-rise-for-cheap-and.html

Pakistani power sector is continuing its march toward cheap indigenous sources of electricity. Hydropower component has increased 22%, coal 57% and nuclear 8% while oil is down 54% and natural gas and LNG are down 32% and 15% respectively, according to Bloomberg. These changes in power mix are expected to help significantly reduce power subsidies that run into hundreds of billions of rupees contributing to large annual budget deficits.


Data From NEPRA. Courtesy Pakistan Today

Coal's contribution to power mix now stands at just 21%, in spite of 57% increase in use of coal in Fiscal Year 2020. It is still almost half of the global average of 38% of electricity produced from coal. Overall, the contribution of fossil fuels in electricity generation is now about 54%, down from nearly 66% a few years ago.


Pakistan Power Generation Mix. Source: Bloomberg

Hydropower and natural gas now contribute 32% each, making them the biggest sources of electricity in Pakistan. Coal comes next at 21%, followed by nuclear at 8%.


Pakistan Power Generation Plan 2019-2040. Courtesy of World Economic Forum

One of the biggest economic challenges Pakistan faces is it growing debt and deficit from subsidies to the power sector. Often referred to as "circular debt" in Pakistan, the government owes Rs. 1.6 trillion ($7.2 billion) to power sector at the end of June 2019. Pakistan government is now is committed to improving the situation by its development of an Indicative Generation Capacity Expansion Plan (IGCEP) that runs until 2040.


Change in Sources of Electricity in 2020. Source: Bloomberg

Pakistan recent efforts to diversify its fuel mix for cost reduction are raising hopes for cheap and abundant electricity needed for its industries and residential consumers. There is a plan called "Indicative Generation Capacity Expansion Plan" in place. Execution is the key to making the power sector greener, cheaper and more reliable.

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http://www.riazhaq.com/2020/08/pakistan-hopes-rise-for-cheap-and.html

 

[not_two]

What's current rate per unit of electricity ? How much it will reduce after completion of cpec power projects ?

 

[Chakar The Great]

Thats the bottle neck in our economy. If Pakistan is to compete with China, Bangladesh, India cheap electricity would be needed , otherwise the cost of end products become non competitive.

 

[Pandora]

We substituted one expensive source furnace oil with another LNG/LPG all thanks to PMLN. Coal is cheaper but not as cheap as hydro.

 

[Murgah]

We need to make 10000 MW electricity from thar coal

 

[Syed1.]

We could have produced 60,000 MW from hydro. That is literally more than twice our peak demand. Imagine nearly free power that would have revolutionized our economy. Instead our governments since the 1960s have focused on thermal power.

 

[Mrc]

Share of nuclear needs to go up to 20 percent

 

[RiazHaq]

Already, the electricity generation cost is down 11% and current account deficit has declined 78%. There is a plan called "Indicative Generation Capacity Expansion Plan" in place. Execution is the key to making the power sector greener, cheaper and more reliable.

https://www.southasiainvestor.com/2020/08/pakistan-hopes-rise-for-cheap-and.html

 

[sohail.ishaque]

Katzarah dam should had been worked upon also. along with basha dam

 

[Avatar]

Rampant corruption and power mafia has stalled the progress of Pakistani people. The Elite dont want Pakistanis to progress for their selfish reasons and the whole nexus, which also has links in military etc is only interested in selling overpriced basic commodities by controlling the supply.

 

[Yaseen1]

imf influence will never allow govt to provide cheap electricity as imf wants to destroy our industry and dictate govt to devise policies which restrict industrial growth so we remain dependent on their bailout

 

[Dalit]

We could have produced 60,000 MW from hydro. That is literally more than twice our peak demand. Imagine nearly free power that would have revolutionized our economy. Instead our governments since the 1960s have focused on thermal power.

So much precious time lost. Imagine if the hydro projects were intiated at the right time decades ago. This country would be somewhere else.

 

[Avatar]

imf influence will never allow govt to provide cheap electricity as imf wants to destroy our industry and dictate govt to devise policies which restrict industrial growth so we remain dependent on their bailout

IMF wants your govt to earn more money and reduce subsidies so that Pakistan can stop begging for bailouts and loans every 2 years.

 

[Dalit]

imf influence will never allow govt to provide cheap electricity as imf wants to destroy our industry and dictate govt to devise policies which restrict industrial growth so we remain dependent on their bailout

It will be interesting to see what the government does after having sought IMF bailout at the beginning of their term. Certain economic indicators have improved whilst others have deteriorated. This was to be expected since the government is trying to patch up the most critical aspects of the economy. Having said this, let's see whether the government continues on the IMF path which in my opinion is detrimental in the long run. Certain IMF demands are logical, but others are really meant to undermine growth.

 

[Dalit]

IMF wants your govt to earn more money and reduce subsidies so that Pakistan can stop begging for bailouts and loans every 2 years.

That is one part of the story. The other part is that IMF also wants to dictate the Pak economy and politics. It is in Pakistan's best interest to swiftly improve economic indicators and thank IMF for its support. Easier said than done, but that is the job of the government.