Power up!

China is ready to invest in our power projects, but are we ready to work on them?

Power up!
While the $46 billion deals that Chinese President Xi Jinping arrived with in Islamabad last month may right most, if not all, wrongs for Pakistan, it was the energy deals that stood out for a country impaired by a multi-pronged power crisis.

Considering that the goals of the National Power Policy (2013) were twofold – reducing power shortfall and diversifying Pakistan’s energy mix – the deals signed with China appear to signal the right intent. And yet, scepticism persists with regards to Pakistan’s ability to ensure the completion of these projects.

“Deals are signed frequently; it’s a question of implementation,” says Nadeem Haque, former deputy chairman of the Planning Commission. “A decade ago, a deal was signed with China to construct a city outside Lahore, near Ravi, but nothing materialised,” he says. “No number of deals can change anything without domestic reform. With such weak institutions, it is going to be very difficult for these deals to materialise.”

The most prominent energy deals with China – part of the China Pakistan Economic Corridor (CPEC) – include the completion of Pakistan’s section of the Iran-Pakistan (IP) pipeline, the Gwadar-Nawabshah LNG Terminal and Pipeline Project, the 70MW Suki Kinari Hydropower Project, the Port Qasim 2x660MW Coal-fired Power Plant, the 720MW Karot Hydropower Project, the Jhimpir Wind Power Project, the Thar Block II 2x330MW Coal Fired Power Project, the Dawood Wind Power project and the Quaid-e-Azam Solar Park in Bahawalpur.

In spite of the question marks that hang over the government’s capacity to implement these projects, Khurram Hussain, financial journalist and columnist for the daily Dawn, believes the Quaid-e-Azam Solar Park is one project where the government has got things in order.
"We're light years away from fulfilling our solar potential"

“In some areas the government appears to be successful, like the Quaid-e-Azam Solar Park. But not quite in other areas, like the LNG import terminal for example,” he says. “Unlike the Quaid-e-Azam Solar Park, much of the work on LNG import terminals was supposed to be done by the Pakistani government. It’s been more than a month and no gas has flowed through the terminal. They’re still working on gas classification, and are yet to decide the tariffs.” That raises concerns about the projects that have little Chinese involvement, he says.

Nadeem Haque believes limited government involvement in projects like LNG import can actually help streamline the process. “The PPP government spent its entire tenure trying to import LNG. The current government is chasing the same deals,” he says. “The proper way of managing this is to let the private sector handle the deals. The government shouldn’t get involved at all. The more the government is involved the more things are spoiled – IP is a classic example.”

But will Chinese involvement improve the situation?

“Maybe we should lease out the country to China,” Haque says sarcastically. “What about the previous projects that China has been working on – where do they stand? Can China work any better with the same institutions that we have right now?” he asks.

One of the major aims of the NPP was to diversify the energy mix, especially considering that we have around 50,000MW worth of potential wind power and 60,000MW of potential hydroelectric power to bridge the current shortfall, which as things stand is around 4,500MW.

Khurram Hussain says we must put our energy eggs in different baskets. “We should diversify the gas supply, now that we’re going to rely more and more on imported gas. We should have LNG terminals, along with pipeline gas from Iran and Turkmenistan,” he says, adding that not a lot of work is being done on alternative energy. “The big problem on those fronts is the circular debt. The power crisis is more than just a crisis in power generation – we have a crisis in the pricing regime, we have a crisis in governance – all of these combine to aggravate the situation.”

Many Pakistanis have pinned their energy hopes on the the sixth largest coal reserves in the world at Thar.

“To get that amount of electricity from Thar to the national grid requires a really big transmission line, which is a multi-billion project that the government has done nothing about,” Hussain says adding that the project would require “enormous amounts of fresh water as well, for which we don’t have any infrastructure in place.”

He believes that for any significant reduction in Pakistan’s power shortfall any time soon, a ‘game changer’ in technology or governance is needed. The Quaid-e-Azam Solar Park could be that game changer.

“The price to install solar panels is coming down rapidly – currently it stands at around 20 or 21 cents per unit. Within a matter of three years it could be down to 14 or 15 cents.”

Nadeem Haque says we’re still light years away from fulfilling our solar potential. “Instead of creating an entire solar park, the simplest solution lies on our rooftops – every roof is a solar plant,” he says. Haque adds that while everyone seems to be focusing on increasing the supply, no one is paying heed to the unnecessary demand and energy wastage. “The demand is increasing, because our major cities are constantly expanding. In Lahore, people regularly drive 30-40 miles every day. Obviously is fuel wastage.”

He says the Pakistani home paradigm is based on single families, which means energy wastage through appliances. “No one seems to be bothered about energy efficiency,” he says. “What about the amount of energy we waste through inefficient heaters, air conditioners and other appliances?”