AHSAAS ENERGY: 2015

·         Country is in worst Energy crises and the Government is involved in construction of roads & metro buses. Dr. Qadir Khan
·         If we don’t have dams in the coming years then we may step into water crises which will be more horrific then energy crises. We are 110% sure that till 2018-2019, 660MWs of Power will produce from Thar coal. Shammsuddin Shaikh
·         My recommendation will be to go for privatization of power generation but the power purchasing should be on open bidding basis. In this way we can control energy crises quickly. Kalim Siddiqi
·         Shale oil & gas exploration and production requires huge investment and due to which we will only work if we have all confirm and detailed data and studies. M Rafi
·         InshaAllah within some weeks, 100 MW of solar power will be in the national grid. There are many traders who are selling solar products and don’t have any qualification in this sector. Mr. Kazi Zulfiqar
·         Around 65 million people do not have access to electricity & around 75% of people do not have access to gas. Rather than going for big solar power plant we need to give importance to distributed generation. Inam ur Rehman
·         The circular debt is rising & coming again, Faisal Ahmad

Around daily 14-16 hours in Quaid-e-Azam Solar Park will be worthless with no difference between Cholistan desert & Solar Park.

There are lots of concerns which still exist regarding the quality & cost of renewable energy and its penetration into the grid.

The E-commerce Gateway Pakistan and some other private companies have recently organized the “Energy Convention 2015” on “Powering the Future of Energy Innovation” at Karachi Expo center dated 10-12 March 2015. In this crucial time where the energy crises are still in its peak and the summer season are coming again, this convention attracts attention of different private sectors. Many renowned energy specialists and head of the companies in power sector have attended & presented their challenges which they are facing & solutions for mitigating the energy crises for short and long term. Pakistan’s founder of the nukes, Dr. Abdul Qadir Khan has also participated in the conference and highlighted some of the major and core hurdles in the energy crises.

Dr. Abdul Qadir Khan highlighted the following concerns;

Pakistan is in Energy crises and the Government focuses are on construction of roads & metro buses.

Most of the head of main positions in regimes are accountants who don’t know the engineering solutions and they are just aware about the cost calculation.

Nowadays we can survive without roads and metro buses but without electricity we will be unable to survive.

Here in our government & other main positions, no right man is on right place.

Years ago, Government showed dreams to provide 50000 MW for 500 years but nothing has done.

Recently, PM Nawaz Sharif visits the Chinyot reserves which they claim recently discovered, but they are wrong because we already knows these reserves and others 40 years ago.

Here, Ministers are living like a Raja, Maharajas. I wrote couple of letter to PM Nawaz Sharif about running of the Civil Service and selecting the right people but there were no response.

Last time they promised to finish the load shedding within 6 months but now they are asking time till 2018-19 so that planning to get another term.

Today PM Nawaz Sharif inaugurating Lahore-Karachi Motorway but this is not an economical option as we already have train lines which are better economical option. The real concern is we need billions of dollars to invest in energy sector.

In India, Government is giving loans in Renewable sector on small scale and Europe is also releasing billions immediately to their experts when they present the potential.

Industry is going towards China because there is no load shedding. Here everything is imported, there is no local manufacturing.

Roads, motorways, flyovers are just the way for corruption, contracts and money gambling.

In 1990s when PM Nawaz launched Yellow cap car project, I recommended him to invest in local automobile manufacturing industry rather than Yellow cap but he never considered this option and in the end it came up with lots of corruption scandals and now same with the laptop schemes.

I know most of the Ministers or high officials when visit foreigner developed countries, they see the clean roads, proper traffic/roads but they don’t ponder on these developments and asking where we will get best shoes, best cloths, best meals etc.

Government must do something for private power sector in the form of policies, investment, tax relaxation etc. because whatever private sector will do will not make any big impact unless there is no potential governmental support involve in it.

Mr. Shammsuddin Shaikh, MD, ENGRO presented the following;

There are lot of misunderstanding exists towards Thar coal but in reality there is no any concern. I will focus towards Pakistan’s energy crises and Power from Thar Coal.
Currently Pakistan not only facing less electricity but it is also very expensive.
In coming years when we need more power around 16000 to 20000 MWs and if we see the current situation of the country/government then we may go into more problems.
Now what are the options and how much we have done so far?
We don’t have enough dams and we have to put our all efforts on building the dams, it is not only the question of producing electricity but here it also plays an important role towards water reservoir. Most of the people are not aware about water issues; if we don’t have dams in the coming years then we may step into water crises which will be more horrific then energy crises. There must be at least one dam in a decade, after mangla then tarbela and then nothing. Without any politics, all political parties have to show their united commitment towards construction of the dams because it relates with both water and electricity. Remember more than electricity, we will need water in the coming years.
Another big problem is circular debt which is due to the production of expensive electricity. Most of our power plants are crude oil based and there is severe variation in its international prices and no one can predict its future prices.
In 1970s & 80s, most of our power came from either hydal or gas but as our power requirement rises we import oil and build thermal power station due to which electricity rates also increases.
Now I would like to tell something about Thar coal, it is one of the biggest gifts to our nation from Allah Subhanautalla because here there are 175 billion tons of coal reserves. From 1980s, we are hearing a lot of things about these reserves but there were no any solid on ground work happened.
· We have now started our work on it and here many people have concerns regarding Sulphur content, water presence and low energy capacity etc. but with all of our data we are confident to make all these concerns wrong.
If we compare thar coal to the coal use by different countries like Germany, Greece, Poland and other European countries, they produce 30-40% of energy from coal and mostly from the Legnite type of coal. Thar coal are more better than these countries, if not better but atleast they are equal in quality.
If we see India, they are generating 50% of electricity from coal with local production of 440 million tons of coal and just importing 100 million tons of coal. Look at us, we are importing 3-4 million ton of coal even we already have our own coal reserves and not utilizing them.
If you go to central Germany, the miners and scientists are really hopeful to discover 80 million tons of coal and they are planning to produce 12000 MW from it even this coal is worse than Thar.
Government has divided Thar coal into 12 blocks, one of them is with Sind Engro Coal Mining who will work here with all the international standards.
In all of these things, we must not forget the people of Thar who are extremely poor, if you drive 5 hours from here, you will reach to our block Islam kot and you will feel you are going back 200-300 years into history. Almighty God has given these reserves under their feet and we must provide all the benefits to these people. So whenever we talk about solving energy crises by utilizing Thar coal, this means we are also talking about the taking care of Thar people. Just look to Sui place from where gas is providing to all country but we didn’t take care of their people and in the result, at the moment it is really difficult to go there, we don’t want to repeat this history again.
In our Thar coal project, we will spend around $30 million on local development or CSR.
There are two companies, one of them is Sind Engro coal Mining company in which Sind Government is 51% of its owner, 10% Engro, 10% Habib Bank, 10% Hubco and some other investors. All of them are working together to make the production of electricity possible from Thar Coal. The other one is Engro Power who will build 2x330 MW of plant in the first phase. We will increase the capacity because it depends on mining which is quite time consuming.
If we see the cost of imported coal, it costs around $5-6/mmbtu, cost of thar coal initially for 660 MW will be higher than international market rate but it will decrease when we increase the plant capacity because the cost will decrease gradually as per increase in the thar coal mining, the point will come in future when thar coal rates will become half to international market rate and from this point we will be in the real benefit of utilizing our own coal reserves. It is because currently coal rates are linked with international variable market and after extracting thar coal there will be no variation in the cost of coal rates, all the rates will be in our control. We are very hopeful about the cost of thar coal that it will be half of imported coal in the future.
· Now we have two projects, one is mining and the other one is Power. The first phase will be mining which costs $0.9 billion, other one is 660 MW Power plant which costs $1.1 billion, the total cost will be $2 billion. This is one of the biggest investment in the private power sector which you will never found in the near past especially investment in the country like Pakistan where there are quite lot of problem but we are facing and solving them with all of our hard work.
With all these efforts we are also facing some challenges like coal is considered to be dirty fuel which are harmful towards environment so funding from west or European countries are really hard and only China agrees towards funding this project. The other challenge is circular debt because whenever we talk about foreign investment, this particular hurdle again arise and make them difficult to finance the projects even Chinese and other countries always telling us to solve this problem.
There are many other problems because it is $1 billion kind of big project but we will Alhamdullia solve all these problems.
· I will also appreciate Government of Pakistan who gives sovereign guaranty of $700 million in $900 million.
Regarding the environmental concerns, we believe the Sulphur & other toxic contents in Thar coal are the same as practicing in European countries. We know that coal is the dirty fuel for power generation but we will fulfill the standards of IFC, NUFC & World Bank guidelines.
For this project, we are very hopeful that the financial closing will be completed in the middle of this year.
We are 110% sure that till 2018-2019, 660MWs of Power will produce from Thar coal and will be in the national grid.

Mr. Kalim A Siddiui, CEO, Rehkal emphasized on following;

The growth of any country depends on the supply of cheap electricity but unfortunately our position is not good. Around 40% population does not have the access to the electricity & the other 60% are facing electricity shortages.
65-70% of our total electrical capacity (23000 MW) is on furnace oil. If we remember when the oil prices reached $147/bl, the per unit prices also rises and due to which the circular debt issues arises and which still exist. Unfortunately we don’t have any one group or umbrella under which we can solve all these critical issues. We also don’t have long term action in which we can meet our future energy demands.
Pakistan has plenty of natural reserves like hydal power, wind energy; solar energy . but we are not utilizing it properly.
Here I want to give some suggestions. Firstly we need a commission on permanent basis who not only work hard but they also have proper long term action plan and who can coordinate to the entire stakeholder not like power distribution companies who are going to different agencies and settling the rates, issues etc.
From hydal resources we can generate 100,000 MW of electricity. Presently, we are hardly producing 750-850 MW from nuclear power station but we can go up to 4000-5000 MW. Currently we can produce maximum of 6800 MW from hydal power which could reduce to 2500 MW in winter season when the water is not available. As far as wind energy is concern, China is producing 91000 MW, USA 61000 MW, and Germany 35000 MW & India 38000 MWs. So we need to work hard on this sector also, Pakistan has the potential to produce 50000 MW from wind power.
We are also talking and hearing so many things regarding Thar coal for the last 60 years but didn’t use it; we have abundant coal reserves to utilize it for the power generation.
If we see our Transmission and distribution lines, it also becomes quite old now, most of them are HV and EHV lines but we don’t have any UHV lines which are used for extremely long lines, so we also need to focus on this area.
Many countries adopted privatization of power generation strategy due to which most of the hurdles which comes from Government sector has been solved. My recommendation will be to go for privatization of power generation but the power purchasing should be on open bidding basis, Turkey has implemented this strategy and got really good results. By using this strategy, we not only can solve the energy crises as soon as possible but private sector may also invest in the power production and off-course we need to plan all this in away so that our energy mix must produce cheap electricity.
Instead we have lots of power supply companies, we need to have one energy ministry who can manage to take out all the governmental & bureaucratic hurdles for the private investors who are interested to invest either in power generation or power transmission and distribution.
Without electricity no county can progress in this era and our development is badly affected by the shortages. Our government has taken really good steps like wind and solar power but we need to have one energy ministry who can ease the process of power generation for private sector.
We also know that we have the generation capacity but we are unable to produce it on full scale because of the prices and most of the major decisions are in the government hand that are unable to solve it because of so many reasons.

Mr. M Rafi CEO/MD, OGDCL says;

Oil & gas play really important role in the development of any country, OGDCL is one of the biggest companies in Pakistan, in which 75% of its ownership is with Government of Pakistan and 15% are in stock exchange and we are also registered in the London stock exchange.

Currently we are exploring oil & gas in around 115000 square kilometer of land; it is because Pakistan has lots of hydrocarbon reserves. OGDCL is financially strong enough and average daily net oil production till last December was 41200 barrel per day and gas production was 1.2 bcf per day. We have drilled 697 wells in which 298 were exploratory and 103 were discoveries, so our success ratio is 1:2.8 which is far better than international success rate of 1:7.

OGDCL is exploring oil & gas in 32% of Pakistan geographical land and OGDCL also have 67% of oil & 42% of gas reserves. If we talk about the local production of oil and gas, we are producing 17% of oil needs in the country and 30% of gas needs which is 1.2 bcf.

OGDCL is working in all provinces and currently we have 63 exploring licenses. In Baluchistan province we are working on six sites some of them are in Dera Bugti, oach, jal magsi etc. Some of our projects will complete in Dec 2015 and from which we will add more 125 MMscf of gas daily and also produce 410 mtd of LPG daily. Some projects will complete by the end of this month which will produce 1600 barrels of oil and 120 mtd of LPG.

In terms contribution to national exchequer, last year OGDCL has paid Rs. 132 billion and in terms of tax paid is Rs. 54.5 billion . We are also involve in the social works, we spend Rs. 1 billion on health, education, sanitary, IDPs and particularly our focus are on very poor areas.

We have identified some of the areas for shale oil & gas because Pakistan has got 7^th largest shale oil & gas reserves and exploring these reserves are really important for us and we are working on it form different angles. Shale oil & gas exploration and production requires huge investment and due to which we will only work if we have all confirm and detailed data and studies.

Regarding Offshore oil exploration, we worked on 4 offshore wells but unfortunately there were no results and the drilling in offshore costs are more than $100 million. In 2016, we will do seismic surveys with some joint ventures, after the survey then we will be able to take a decision.

Mr. Kazi Zulfiqar, CEO TBA, Quaid-e-Azam Solar Power Park presented the following;

100 MWs solar power plant has successfully been installed in Bahawalpur. Here I really thanks to Dr. Naseem who also invited me to address here. This project is just like our dream come true. In 2013, we presented 1000 MW solar power park to be installed in Punjab and within short span of time we have achieved our goals because we never compromised on the quality of all the equipment used in this plant.

This project is designed and installed by Chinese company TBA which is one of the biggest companies in solar power and most of its work is in China. In 2013 it was second largest company but in 2014 it stands on top of the list. This company also manufactures transformers and different kinds of equipment.

If we analyze the solar irradiation map of Pakistan, it got really great potential for solar power. By comparing it with the countries like Germany, UK even China, Europe and Northern Amercica, our solar irradiation figures are twice than these countries but still they are using this technology for power generation. Germany installed 20000 MW, USA more than 20000 MW and we are only tracking these countries. If we see the central region of Pakistan which includes southern Punjab, northern Sind and some of the Baluchistan areas have the irradiation value of 6 KWh/m2/day. Europe and other northern countries have around half of this value of 3 KWh/m2/day. So we can produce twice bigger power than these countries.

The first phase of 100 MW is in final stages of execution and Punjab Government is providing all its security, auxiliary power, water etc. to this place. The cost of the land is just only $1/acre/year for 25 years. This place is 10 KM of distance from Bahawalpur Airport.

If we talk on solar panels then unfortunately there is no quality check on import of solar panels in Pakistan. We have selected each and every device of this plant on international quality standards and which lasts for 25 years not 3 or 5 years which many companies are offering. We have also hired Germans & some European consultants for checking the quality & standards of each and every solar panel.

The project involves following equipment;

392168 modules of 265 W, 100 inverters of 1 MW, 100 33KV Transformers, 2 transformers of 132 KV/100 MVA, 1400 combiner boxes, 140000 screw piles, DCS & SCADA system for communication. InshaAllah within some weeks, 100 MW of solar power will be in the national grid. The selected tilted angle for this plant is the same as the location’s latitude, which is between 28-29 degrees. The lines coming from this plant are connected to the nearest 132 KV substation via two 100 MVA transformers, in which one of them is for supplementary.

The total cost for this 100 MW solar power project is $150 Million which is 15% less than international market. If we see the per unit price then as per directions of NEPRA, it is 14-15 cents/KWh but it depends on location, insurance etc. and the final price may be around 12 cents/KWh.

Now, I want to highlight some of the issues that Pakistan is facing in the Solar Technology market. The solar panels which are manufacturing in Pakistan are not up-to international quality standards. Another important aspect is regarding our own standards. In solar industry, we don’t have any standards in the country which is satisfying the international quality and testing. In Pakistan there are very few companies who really knows the design and Engineering of solar power plants even small solar systems for residential purposes are also not design properly because there are any traders who are selling these products and don’t have any qualification in this sector. Our people don’t care about quality and can’t make difference between cheap and standard solar panels.

We don’t have any testing labs & standardization and we also have few capabilities in the system design & engineering due to which we still have long time to go in this field because of capacity building, standardization expertise etc.

Regarding quality, China is selling 3 types of solar panels in Pakistan, one is very cheap which doesn’t have warranty, 2^nd is little bit higher which has 3 years of warranty and 3^rd one is international standard whose warranty is 25 years. Now one can imagine what type of quality they are getting in cheap rates because China is making cheap products especially for Pakistan, India and Bangladesh.

So we must need standards, R&D, capacity building and the most important is to find investor for investment. In the last I am really thankful to Chief Minister Punjab who really supports us in building the Qauid-e-Azam Solar Park.

Arif Usmani, DHA Sustainability City Project, highlighted following;

In energy sector we are facing one of its worst impacts especially the city of Karachi. In our projects in DHA sustainable city, 30% of energy will come from Renewable Energy which will also be a model project for Pakistan. This housing society will be the first who will generate power from renewable in Pakistan.

Our main focuses are Quality, Safety, Profitability and Environment. One of our main objectives will also be reducing energy consumption, Passive coating, LED lighting.

Our other projects are 50 MW wind power, Smart grid, 1 MW Solar car park, electric buses, 30 MW biomass and the most important one is “Enabling Environment for Homes”.

We are also working on wind energy potential because the area where we will install have average wind speed between of 7.4 m/s – 3.5 m/s. The wind turbines will rarely stops because the cut-in speed is very low.

If 2% of houses generate its 15% of energy from Renewable Energy then we can generate 100 to 200 MW of Power without any extra big acres of land.

Inam Rehman, CEO Local Private Company says;

30% of people in Pakistan which means almost 65 million people do not have access to electricity. Only 25% of people have access to gas which means 130 to 140 million people do not have access to gas and they are using kerosene oil or wood for cooking or heating. We almost neglect these poor people who are living in far rural areas. By using solar and other renewable resources, we can provide electricity & gas to remote rural areas.

Regarding solar power technology, it is still not in full maturity because if you compare the 100 MWs of Solar Power plant which Punjab Government is installing in Bahawalpur, it is equal to only 100 MWs of some Diesel or gas generators and off-course the availability of sunlight is also the prime requirement. Here I also want to clarify the general perception that some people think heat is very good for solar power, basically it is not heat but light which is good for solar power because after 25 Celsius the performance of solar modules declines and this is an international standard.

So, if we want install 1000 MW of solar power then we need to install around 5000 MWs of solar panels which require around 5300 square Kilometers of land and you can compare the land of DHA Karachi which is 3600 Square Kilometers, now think about how much big lands are require and here the question arises whether the solar power are useful or not in the form of Big Solar power plants? And after all the lands are so expensive especially in Karachi. The best way will be to utilize the roofs of the homes to generate solar power. We are hearing from lots of years about the on-grid solar residential systems but here the utility and power purchaser responsibility are crucial because this technology is linked with the utility and how much importance they will give to this technology.

In Bangladesh when someone wants a new gas connection, it is now mandatory from the utility that consumer must install 3% of energy from renewable like solar geysers. In this way, when so many people install 3-4% of their energy from renewable then it will save huge amount of energy. Recently we have installed 125 KW of solar system for some military place and we also have used advanced systems in it, the result is after installation yet they never paid any electricity bill.

Here, people are slowly losing trust on solar power because they have faced very bad experiences from the market which is a very big challenge for us and for solar market. We must understand that there are many small companies/traders who are selling solar systems and claiming of running appliances like air conditions and running loads for longer periods, so it is not possible in small areas and I recommend the people to consult with specialist who are qualified and who knows the designing very well.

My suggestion to the concern authorities is to give importance to the net metering as soon as possible which is successfully implemented in many countries like UK etc. Rather than going for big solar power plant we need to go for distributed generation in which the power where it is generated can also be consumed there at the same time and which will be more useful.

Faisal Ahmad, SGM, KESC

Our 42% of Power Generation is oil based and when the furnace oil price last time raises, the result was not only increase in per unit price but it also created circular debt. When Government bail out the circular debt with no new & cheap energy mix, the circular debt is rising & coming again within one year.

One of our efficient & biggest Bin Qasim Power Plant relies on the availability of gas.

We have reduced the distribution losses from 28% to 23%.

Our coming future projects in Renewable are Solar IPP 150 MW, 150-200 MW wind power and as far as waste to power is concern, it all depends on the availability of the feeds/waste which is mostly in the administration of Municipal corporation/KMC and also their cooperation with us.

Dr. Naseem Khan says that we need to produce good human resource in this field and we also have to work with universities. We hoped that some minister level delegate could attend this conference but no one shown their interest. We only aimed to send all these important discussion to them.

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In all this conference, most of the focus were on power generation either from fossil or renewable but no one has discussed about the Power Transmission & distribution lines, its capability, lifetime and any up gradation with modern equipment. This is really important because it will carry these renewable power generations to the grid or consumers. There were no question & answer session on the second most important day. The details regarding wind power were also not discussed in detail which also contains a lot of concern regarding the quality & cost of penetrated power into the grid. Most of the attention was on solar power which is quite expensive if installed in the form of power plants.

Hydal power is also a renewable source of energy but there is no any interest shown by the private sector in the conference regarding efforts or construction of small hydal dams which are far more economical than solar power plants. For example, the per unit cost of Qauid-e-Azam Solar park will be around Rs. 12-14 (which is now around Rs. 16 according to new recent announcement of NEPRA) with lots of natural solar power losses called THDs, unstable frequency & voltage and synchronization issues with the grid but the per unit cost for small hydal dams are between Rs. 4.5 to 8 with stable frequency and voltage and with no any switching losses. It is because the power which will be generated from solar plant is DC type which has to be change in AC via inverters but in small hydal dams there is no need of inverters because they generated the conventional AC power directly.

Now if we compare the power capacity and total estimated cost of solar power with small hydal dams, there is a huge economical difference. $150 million is the estimated cost for Qauid-e-Azam solar power with just only 100 MW of Power and which is only for around 8 hours of power generation per day and also depends on the availability of sunlight, the rest of 16 hours will be worthless with no difference between Cholistan desert & Solar park. There are many feasible locations in Pakistan for the construction of small hydal dams but let’s consider some potential for small hydal power in Azad Kashmir. The are some projects in Azad Kashmir whose feasibility studies has already been completed and if we see its potential, it can generate around 536 MW of Power with an estimated cost of $644 million with only Rs 4.5-8/KWh. Now just compare this with 500 MW of Qauid-e-Azam solar power which will cost $750 million with Rs 12-14/KWh. Government of Punjab is planning to install 1000 MW of solar power with the an estimate of $1.5 billion, PM Nawaz Sharif recently addresses in one occasion that till 2017, 10000 MW of Power will be in the grid which mostly will be from Nandipur and Mangla. This is wonderful news for Pakistan but hope this will not be hopes again for us.

Here it is key to mention that solar power is an important source of energy but it is only feasible in residential, rural and small commercial purposes to reduce either the load shedding or lowering down the utility or fossil fuel cost. The people who want to start business in the renewable sector can’t get loans from Government and banks without interest rate even it is a known fact that most of the Muslims hate interest rate because of the religious believes, This is one of the biggest hurdle especially for youth are facing who wants to start business in Renewable and Sustainable Energy.

Pakistan is a developing country encircling with lots of problems like energy crises, inflation, unemployment, terrorism, circular debt, political crises etc., now how this nation can afford these kinds of decisions not just only from Government side but also from private sector? as Allah has already granted us one of the best rivers for cheap power generation in the world?

(Asif J Khalil, Energy writer, Ahsaas Energy)

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