The ministry of petroleum and natural resources plans series of roadshows in the United States, England and Canada, seeking strategic investment in oil and gas sector, said officials on Friday.
These shows tentatively scheduled in the middle of November are not aimed at attracting financial institutions instead the ministry plans to lure strategic and technical investment, they said.
The events would be held in London, Houston and Calgary in the post-text of 60 exploration blocs placed on auction across the country.“We hope to invite one or two energy companies to come here and bring technology with them,” said an official.
The oil and exploration companies and countries have almost two months to submit bids, which will be opened in the second week of December.The Petroleum Policy 2012 has increased the rates of gas for exploration and production companies. Under the new policy, the government has set wellhead gas price in Zone-III at $6 per MMBtu, $6.3 in Zone-II and $6.6 per MMBtu in Zone-I.
The government is working to increase the capacity of the existing power plants.
Secretary Water and Power Nargis Sethi said this while talking to Pakistan Television (PTV) on Friday. She said the Ministry of Water and Power was trying to overcome the power shortfall. She added that efforts were being made to enhance the power generation capacity.
Replying to a question, she said the Wapda had disconnected the electricity connections for those institutions, which were not paying electricity bills.
She claimed that the government had controlled the problem of loadshedding.
She said all resources were being utilised to create awareness among the people to save energy.
Replying to another question, the secretary said a strict monitoring system was adopted to balance demand and supply in the energy sector.
Solar energy generation is the real time solution to Pakistan’s growing energy scarcity problem whereby environment-friendly renewable energy can be produced in the shortest possible time, said Chairman of Buksh Energy Pvt Ltd Asim Buksh.
He quoted a World Bank report, which said that Pakistan had massive solar energy generation potential and an available production capacity of 2.8 million MW, while talking at the Buksh Group head office on Thursday.
The Buksh Group has successfully shifted a majority of its electricity load on renewable solar energy from a conventional Wapda transmission system by installing an off grid power generation system at its head office.
“If renewable energy generation options are not adopted, the power shortage will become more acute – to 19000 MW by 2020,” said Buksh. His company has been offering off grid energy solutions to businesses, offices and domestic consumers with two to three years’ payback period by reducing their electricity bills. Solar power generation is the cheapest source of energy, he said.
Talking about some Corporate Social Responsibility (CSR) initiatives, he said that the Buksh Foundation – a non-profit organisation had successfully electrified two villages of Sahiwal districts, in Punjab while the process of electrifying other districts was also underway.
“We have provided solar lanterns to the villagers. These are recharged through a solar generator that is installed at one house in that village,” he said. One solar generator can recharge 50 lanterns at a time, he said. The company has provided off grid electricity solutions to those villages which are not electrified by Wapda or any other electricity supply company, he said.
“By providing solar lanterns we have given a new life to these villagers. After the installation of solar lanterns in these two villages, villagers from adjacent villages have also approached us to install the same technology in their villages too,” Buksh said.
Earlier, in the briefing, the CEO of Buksh Foundation Fiza Farhan said that Buksh Energy was the leading Energy Servicing Company (ESCO) operating in Pakistan.
“Buksh Energy has successfully converted the head office operations on solar energy. It is an off grid/hybrid solar PV solution which has enabled the head office to get rid of the conventional and unreliable sources of energy including UPS and generators. This off grid/hybrid solar PV solution incurs only a one time investment cost and is a minimal maintenance solution that provides its users with a payback of less than four years and a sustainable project life of 25 years,” she said.
The total energy load had been reduced by 80 percent and the lighting load of 13.59 KW had been reduced to 2.52 KW, she said. The project has rendered annual savings of Rs1,949,472 and a payback period of 1.8 years.
Farhan said that the company was working on micro, meso and macro level to provide alternate, reliable and sustainable energy solutions for commercial, residential and industrial purposes.
Moreover, the company was working with credible international vendors which include big names such as SMA.
President Zardari said on Wednesday that huge investment opportunities were available in the country in the alternate energy sector as the abundant sunshine and wind corridors offered great opportunities to the investors for harnessing this clean and efficient source of energy.
He was talking to a delegation of DACC Power Generation Company — a subsidiary of US-based DACC Global that provides alternative energy solutions internationally – that called on him at Aiwan-e-Sadr Wednesday.
Spokesperson to the President apprised media that the DACC Solar Power Generation Company (DPGC) is pursuing development of a 50MW Solar power project in Punjab, production of bio-fuel and installation of solar water pumps in the country.
President appreciated delegation’s interest and investment in the alternate energy sector. He said that energy shortage has been one of the major challenges faced by the country at present.
He said that the government was according highest priority to facilitating the investors undertaking business ventures in this sector.He said that the government was committed to promote the alternate means of energy production so as to reduce dependency on conventional modes and simultaneously to save the environment from further degradation due to burning of the fossil fuels. He also mentioned special control rooms in the Ministry of Water and Power and various offices of power distribution companies for monitoring and coordination purposes.
President assured the company of all possible facilitation in its business ventures in Pakistan.He also expressed the hope that the company will construct more solar projects in other parts of the country too, which will greatly help in meeting the energy demand of the country.
The delegation thanked the president for meeting and expressed keen interest in further expanding their business in the country. The delegation, headed by Doug Melvin, President DACC Global, comprised of Arnd Spinger, Joseph Steinfeldt, Mark Lohoff, Adnan Hameed, Zafar Ahmed and Nasir Waseem.
Chairman Intellectual Property Organization of Pakistan Hameedullah Jan Afridi, Secretary to President Maj (R) Haroon Rashid, Secretary Water & Power Ms Nargis Sethi, CEO Alternative Energy Development Board Arif Allauddin and other senior officials were also present during the meeting.
The industrial sector has urged the political elite to consider national interest in gas distribution instead of opting for populist solutions which have done away with thousands of existing jobs.
Chairman All Pakistan Textile Mills Association Ahsan Bashir said that it has been proved internationally through creditable research and analysis that power generation should be given preference in supplying gas over all sectors as doing so makes the economic process downstream efficient.
“The next priority in every economy except Pakistan is industry as its sustained operations increase economic growth and provide jobs,” he said. “If industry closes for any reason jobs vanish immediately,” he said. Further, reducing industrial jobs by giving gas priority to less important sectors is suicidal for the economy, he said. Bashir also said that the next priority in gas supply is for commercial purposes only followed by domestic consumers. Transport, he added, should be the last priority and that too only when it comes to public transport. In neighboring India only public transport had access to natural gas, said Bashir. Chairman Energy Committee of the federal government Gohar Ejaz said the energy crisis could be resolved immediately without financial loss to the consumers. “We are in a deep economic crisis and need accelerated growth and exports to come out of the woods,” he said.
He added that the CNG sector was consuming 500 mmcfd gas daily at the national level and 280 mmcfd in terms of the SNGPL network. He said that the government was providing Rs50 billion subsidy on CNG by keeping its rates 40 percent below petrol rates (on BTU basis). On the other hand, the government was providing power sector subsidy of Rs250 billion and fertiliser sector subsidy worth Rs50 billion, he said.
“This cumulative subsidy worth Rs300 billion could be wiped out immediately if the 500 mmcfd gas being supplied to CNG was diverted to industry,” he said, adding that this measure should at least be applied for three winter months. In order to compensate the CNG users the government should reduce the rate of petrol to Rs80 per liter which would involve a subsidy of Rs100 billion per annum or Rs25 billion for three months.
“This measure would decrease the import of furnace oil and the import bill by $3.8 billion at current global rates,” he said. In addition, the entire power sector and fertiliser subsidies would be done away with. “The urea rates in the country would decrease by at least 30 percent while there will be no need to import urea worth a billion dollars each year,” he said.
Chairman APTMA Punjab Shahzad Ali Khan said this prudent solution would revive the economy. He conceded that 30,000 CNG workers operating at 300 CNG stations would lose their jobs. They could be compensated through a government subsidy at least during the winter months, he said. Full gas supplies to industries would revive 40 percent of the closed units in almost every industrial sector.
Moreover, an exportable surplus of $4 billion would be available for global markets and at least two million employees would get back the jobs they lost due to closing of industrial units. This plan would pave the way for new investment.
Energy sector expert Mohsin Syed said that the statistics clearly show that immediate energy needs of the country could be addressed by giving gas supply priority to the power sector and industry.
“The CNG sector should be accommodated by importing LNG and pumping it into the SNGPL and SSGC systems. The gas rates for all sectors could be increased on the basis of weighted average of domestic natural gas and imported LNG,” he said.
The All Pakistan CNG Association (APCNGA) has demanded the government to bring down prices of compressed natural gas (CNG) in Pakistan in line with other countries, as it is highest in the region, according to a statement on Tuesday.
“CNG prices in Pakistan should match other countries where buying power of the people is more or less the same,” said Ghayas Paracha, chairman of the Supreme Council of APCNGA.
“Decisions affecting the CNG sector are not taken on merit but on the whims of the powerful oil lobby, which wants to boost its business,” he added.
The CNG sector needed immediate attention of authorities as billions have been invested in this sector and 3.5 million cars have been converted, while millions were directly and indirectly employed in this sector, he said.
Gas is an indigenous resource, which is economical and clean as compared to the imported fuels, which are costly and unfriendly to the environment.
Paracha said that CNG price in Thailand is 76.70 percent less as compared to price of petrol. Similarly, in Bangladesh, CNG is available at 68.61 percent less price than petrol, Indonesia 51.65 percent and in India it is 58.84 percent of the cost of petrol.
“Several countries, including India and Bangladesh don’t have any indigenous substitute for gasoline; they lack proper gas infrastructure but they sell CNG at low price as compared to Pakistan,” said Paracha.
As a policy, the United States and several European Union (EU) countries are promoting use of gas to reduce dependence on imported fossil fuels due to uncertainty in supply chain, volatility in prices and to save foreign exchange, he said, adding that several countries are doing away with expensive liquefied petroleum gas (LPG) but here the CNG sector is being closed to boost import of costly fuels.
Total consumption of CNG in Pakistan is not more than eight percent and yet the sector is paying more taxes as against any other sector consuming gas, said Paracha, adding that still the sector is being victimised.
He said that before 2002, there was a ban on running thermal power plants on CNG. It was Musharraf’s era when the country started running power stations on clean fuel despite scarcity.
This decision resulted in depletion of precious gas reserves, which took toll on the economy, deprived industry of economical fuel and contributed to rapid environmental degradation, he added. The government can consider reversing that decision, suggested Paracha.
Punjab Chief Minister Shahbaz Sharif has welcomed the successful conduct of energy roadshow by Turkish companies in Istanbul, saying the energy roadshow would prove to be helpful in solving energy crisis in the Punjab.
Presiding over a meeting held here on Tuesday on the conduct of energy roadshow in Turkey, the chief minister said the Punjab government was taking effective steps to meet the electricity shortage by implementing a concrete strategy, under which power would be generated through traditional as well as alternative methods.
He said a great deal of headway had been made in the negotiations with world-renowned companies of other countries, while 22 Turkish companies had expressed their interest in investment in the Punjab energy sector.
Member National Assembly Ahsan Iqbal, MPA Zaeem Hussain Qadri and Kh. Ahmed Hasaan, secretaries of Finance, Energy and Mines and high-ups of departments concerned also participated in the meeting.
During the meeting, the chief minister was given a detailed briefing by the delegation which had participated in the energy roadshow in Istanbul.
Addressing the meeting, Shahbaz Sharif said that friendly relations between Turkey and Punjab had been transformed into financial collaboration.
He said the Turkish companies would be provided all kinds of facilities in the Punjab and their representatives would pay a visit to the province in the near future. He said the Punjab had 540 million tons coal reserves.
The federal government has allocated Rs13.78 billion for the 4,500MW Diamer-Basha dam project during the fiscal year 2012-13, said chairman of Water and Power Development Authority (WAPDA), while talking to Gilgit-Baltistan Works Minister Bashir Ahmed, Health Minister Haji Gulber Khan and Taxation and Minerals Minister Muhammad Naseer Khan, who called on him.
The chairman said that as many as 14 local contracts had already been awarded and the construction work on WAPDA offices, colonies, contractors’ camp, road infrastructure etc, in the project area is in full swing.
The process to acquire land for the project both in Gilgit-Baltistan and Khyber-Pakhtunkhwa has also been started, while Rs6.85 billion has been paid to the respective governments till June for the purpose, he said.
The chairman said that the multipurpose Diamer-Basha dam would usher in an era of prosperity and development in the country, particularly in Gilgit-Baltistan.
He said that a lucrative compensation package for the victims of the project has been devised in accordance with the international standards.
The Gilgit-Baltistan ministers assured the Water and Power Development Authority chairman of their full support in implementation of the project. Discussing the matters relating to the project, they also apprised him of the demands of the locals.
Federal Secretary for Water and Power Nargis Sethi has made it clear that electricity would not be supplied to those who did not pay their bills.
She stated this while talking to heads of distribution companies in a video-conference at the Ministry of Water and Power here on Monday.She said that six-hour-long loadshedding was not acceptable and the submission of wrong statistics by the heads of power distribution companies (Discos) would not be tolerated.
The secretary said, “Forget the six-hour loadshedding and there would no extreme loadshedding in summers.” She said that so much loadshedding showed poor performance and incompetence of the company concerned. The secretary said that the government had overcome loadshedding to a great extent through solid steps adding that loadshedding in urban and rural areas would be equalised and additional electricity would be supplied to industries. She said the people should pay bills and should also show national responsibility by identifying consumers who did not pay their bills.
She said if such consumers paid full dues, electricity supply without an interruption could be ensured. She said that none would be provided free electricity and the power supply to those not paying the bills would be disconnected.
The process from having an energy vision to achieving energy security is a complex and multi-faceted one which requires dedicated efforts and input from specialists. The crucial phase of this is none other than an energy demand modelling exercise undertaken on scientific lines and based on a current and expected rise in energy demand – not only for the medium to long-term but for 20 to 25 years.
Unfortunately, such an exercise has never been attempted in the country. This negligence has contributed significantly to inaccurate policies resulting in the ongoing energy crisis. However, accurate energy modelling itself requires a detailed data gathering phase. Data accuracy leads to an accurate demand model which then leads to accurate plans. This necessitates the implementation of a standardised roadmap so that policymakers can be guided from the initial vision to the preparation and implementation of an action plan; create an accurate energy demand for short to long term planning; harmonise the energy demand at the national and provincial level; and allow for a variety of energy and technology mixes.
Any systematic approach encompassing the above mentioned steps would minimally comprise: i) an energy vision ii) energy demand modelling iii) energy resource mapping iv) energy policy development and v) an energy implementation plan. The energy implementation plan must be followed in letter and spirit thus ensuring that timelines and goals are met.
Vision is the nascent step for any plan. However, the predicament here is not turning the vision into a detailed policy or action plan as has been the norm in the country. The energy vision needs to provide a view of the future in accordance with the overall economic and national plans as well as population estimates. It is crucial that intricate details are not set at this time of the process as the necessary information needed is not available to the resource planners. Many failures of energy plans can be traced back to the setting up of details too early in the planning process.
In the last few decades, energy demand modelling has become a complex process entailing the utilisation of specialists and expert simulation systems. Predicting the demands accurately is crucial to coming up with an energy plan which ensures energy shortages do not occur in future.
As evident in the first decade of the twenty-first century, any energy demand forecasting with regard to Pakistan needs to accommodate the uncertainty factor. This uncertainty factor can either mean unprecedented growth as witnessed in the early 2000s or a slowdown interval in the economy. To accurately predict this factor, the energy demand modelling needs to follow a systematic process from the collection of data on key drivers. These key drivers, among others, include: i) energy infrastructure ii) energy intensity of industrialisation iii) consumption pattern iv) travelling habits and v) consumer demand behaviour. The first step in this process is accurately identifying all the key drivers. Next, a methodological process for data collection needs to be followed to ensure data accuracy.
Based on the data collected, the energy experts are able to model the demand. Simulation software is a cornerstone of this step and its usage has become a common practice in energy modelling.
Energy demand modelling kick-starts the intricate process of energy resource planning. This is a time consuming process as the experts also have to look at the geopolitical situation globally and in the region. This includes many other factors such as the country’s imports and national fuel sources. Here the need is to focus on a number of factors of which energy sources and infrastructure development are the most important. The energy sources needs to comprehensively cover the areas of electricity generation, energy procurement, indigenous sources, technologies available and global trends. Infrastructure-related planning covers the areas of construction of new power plants, pipelines, water accessibility and so forth. Areas such as energy efficiency planning and energy diversification are also integrated at this point. The decision to include the areas of renewable energy in the national energy mix, requirements of human resource, financial constraints and industrial requirements are also mapped in this phase.
Once the energy resource mapping is done, the energy policy can be formulated. It is this energy policy which is based on such extensive groundwork that promises to deliver a successful implementation plan.
However, the work does not end here. The policy developed needs to be an integrated energy policy. Developing different policies for different energy sources, such as: i) fossil fuels, ii) renewable energies, and iii) energy imports not only leads to duplication of efforts at national level but also costs more resources. Additionally, the policy coordination and coherence becomes a major issue. In rare instances the policies might also negate each other.
The ideal integrated energy policy would cover all aspects of energy at national and provincial levels. Once an integrated energy policy has been developed, only then can the policymakers move on to the implementation phase.
Development of the energy action plan marks the start of the implementation phase. Based on the energy policy, an energy action plan is created which outlines the details for the implementation of the plans to achieve the identified energy targets with timelines as well as availability of financial resources and/or investment.
Can this be done in a country known for duplication efforts, multiplicity of institutions, lack of coordination and political considerations taking precedence over rational decision making and optimal resource allocation? To this list, another dimension that needs to be factored in is none else than the corruption, malpractices and the urge to swindle and squander away the scarce financial resources.
The energy policy developed with a roadmap, timelines and optimal energy mix – prepared by experts – has to be agreed upon by the major political parties so that an uninterrupted pursuit is ensured. This would give a positive signal to donors, multilateral institutions and investors about the continuation of the policy. Let us deliver this time.
The writer is a Ph.D. candidate.