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National Energy Policy

PPP government has failed to resolve electricity shortage in last two years and its current policies show little hope of overcoming the acute shortfall in years to come. Government representatives media statements that it will take years to overcome the acute shortage and latest energy riots in different cities are dangerous omens for country’s energy deficient stalled economy, allied unemployment and resultant increase in domestic and foreign loans to run the affairs of the country. Under the circumstances, Pakistan needs a National Energy Policy (NEP) to revive country’s economy, restore jobs and end corruption.

End Politics in country’s energy sector. Domestic and foreign meddling in country’s energy sector is stalling the energy sector. Fossil fuel exporters and importers mafia force advanced world and third world governments to maintain thermal based power generation to protect their business interests. Islamabad needs to get rid of these elements in national and public interest and nationalization of Pakistan’s energy sector is the first step in the right direction. Government should therefore scrap all privatization plans in energy sector because by removing state control of national energy sector both state and public are directly left at the mercy of private owners of national energy sector that is only there to make profit and leaves the state to bear the financial, economic and social repercussions.

Corruption is a major challenge in the energy sector. Obama had to give $6bln for restoring national electricity infrastructure, which private energy companies failed to maintain and upgrade despite being part of their contract. Pakistan is facing mega level of alleged corruption in its energy sector in form of circular debt, free electricity as perk, furnace oil imports, and reports of waste of foreign debts by power distributors (23-03-2010 nationalmedia). Islamabad needs to scrap PEPCO. State run energy sector in China is successfully meeting national energy targets and keeping energy prices affordable. From 2004 to 2009, there were only two energy price increases in China. Today, the price of electricity in China ranges between 1.7 to 4 cents per kWh (2010-03-04, China Daily). In Pakistan the price of electricity is 64 percent of average income. In UK and USA, it is under 3percent and 1.59 percent respectively. Nationalization of Pakistan’s energy sector is must to end corruption, cut inflated salaries of top management, reduce energy prices, and restore accountability and transparency. Corruption is a universal phenomenon in energy sector. Failed Enron electricity Plant in India is an eye opener for those seeking Pak-US energy cooperation in energy sector.

http://www.nytimes.com/2010/03/23/business/global/23enron.html?hp. UK’s energy sector is equally infested with corruption http://www.guardian.co.uk/business/2010/mar/07/energy-lightbulbs-wasted-lax-regulation. Pakistan has its own energy saver scandal.

Beijing has formed a multipronged renewable based energy policy to meet nation’s growing energy demands, meet international clean energy standards, provide cheap energy on sustainable basis, replace fossil fuel based energy generation with renewable energy, protect country’s economy from volatility in international prices, increase employment and protect national and foreign policy interests. China has added 9 GW of renewable energy in 2008-9 alone. The successful use of thousands of wind power units in western China and shifting of public sector to solar energy has shown critics of renewable energy in the world that it is the future (2010-03-30, Daily China). Mongolia has been provided with Solar-Wind Generators ($512) to power average household. Renewable energy is creating jobs in equipment manufacturing, construction and service sector. In China, clean energy will account for 15 percent of total consumption mix by 2020 (2 March, China Daily). UK is gearing up to adopt renewable energy. A £8.6 bln scheme to help middle class install solar panels funded by £3 levy in next 20 years is in the offing. Solar PV alone has already created 50,000 jobs in UK (3 March, The Guardian). Islamabad therefore needs to come up with NEP with renewable energy as driving force on lines of Chinese and European models to overcome electricity deficiency in next six to nine months. The availability of grid ready, plug-and-play renewable energy options including solar panels, windmills and their mix allows fixing energy shortages in weeks. China’s streetlights and most of the government setups are powered by the renewable energy. Islamabad should encourage use of affordable solar panels http://www.solarsystem.pk/products.html in Pakistan to reduce fossil fuel based energy consumption. If Islamabad is really serious to restore stalled economy, resultant unemployment and address allied socio-economic challenges including brewing (energy) unrest there is a need to do more. Plans of generating 150 MW from renewable energy are too little, too late.

The media reports show that a sum of $4.2 bln has been allocated for the independent power projects with a total capacity of around 2000 MW. The cost of furnace oil and import bill will be over and above the cost. Reportedly, it roughly costs one million dollar to generate one megawatt of electricity from renewable resources like solar or wind and indigenous production can further reduce the cost. They have a twenty-year life (30 March, China Daily). The experts in Britain are of the view that shipyards of UK can be used to build wind turbines that will not only save money but also generate employment. Islamabad can help shipbreaking industry to start manufacturing wind turbines. The success of Beijing’s clean energy policy shows that overcoming energy deficiency in Pakistan has more to do with political will than availability of technology. PPP government therefore has to choose between people of Pakistan and energy mafia.

Energy efficiency is an important part of China’s national energy policy. Beijing is improving its industrial infrastructure to reduce energy consumption to meet national Energy efficiency target of 20 percent reduction in energy consumption vis-à-vis economic growth between 2006 and 2010 (4 March 2010, China Daily). Beijing is training country’s textile sector comprising of 50,000 textile mills to adopt measures to save 20 percent energy, water and pollution through different steps. Two-hundred ton of “noxious” brew of chemicals and water is used to manufacture one ton of fabric. A mill owner by investing $73000 and adopting efficiency measures reduced water use by 23 percent and coal use by 11 percent. As a result, mill is saving about 5.7 million yuan annually. In addition, it will secure mills international exports. China has drafted Green Energy program (2 March, China Daily) to control pollution under international laws. China exported nearly $160 billion in textiles last year (01 April, China Daily). At the domestic level, National Development and Reform Commission of China is promoting steps to cut energy waste to meet energy efficiency goals. The important ones are standardization of energy efficiency labeling on domestic appliance, energy efficient lights and appliances, allocation of $2bln to give ten percent discount to replace old models with energy efficient new models of domestic appliances and promoting awareness among people to buy appliances using renewable energy like solar water heaters etc. British media has uncovered a scandal in which the energy companies transferred cost of carbon emission to the consumers in utility bills and adopted a policy that wasted distribution Transport is the second largest energy consumer in Pakistan (23 March Daily Times). To cut its fuel import bills by half Islamabad needs to introduce trains and trams in all major cities of the country. Dubai has developed its metro service in record nine months.

An efficient metro service in Pakistan can recoup it prices within no time. On average, 50 million Pakistanis commute daily in Pakistan. Government can earn lot of revenue through metro services and reduce country’s (fuel dominated) import bill provided it can free itself of the vested stakes including plans to privatize Pakistan Railways. Reportedly, Toronto metro daily earning is around $2 million. The gas, electricity and CNG should be provided to public because industrial sector is using bulk of domestic energy to profit without providing relief to domestic consumers. The state should arrange for their energy needs. Thus, without comprehensive NEP based on renewable energy, end free electricity and strong will to fight corruption Islamabad cannot make any headway in energy sector, provide relief to public and revive economy.

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