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Use of alternative energy urged

The Union of Small and Medium Enterprises (Unisame) has urged the government to make installation of alternate energy system of solar, wind or biomass mandatory for all new construction of houses, commercial buildings and factories to save electricity in view of satisfactory and successful reports from alternate energy users from all over Pakistan.

President Unisame Zulfikar Thaver said the new houses, commercial buildings and factories should be given a choice to install solar, wind or biomass systems and urged the government to make it mandatory for them to install alternate energy systems.

He said the government needs to encourage the use of alternate energy generation systems and make it affordable by exempting the alternate energy systems from all import duties.

He asked the State Bank of Pakistan to offer subsidised finance for installation of alternate energy systems of solar, wind or biomass.

He asked the government to offer leasing facilities for the installation of alternate energy systems for the small and medium enterprises on easy repayment terms to enable them repay over a period of 3 to 5 years on easy installments.

Call for overcoming energy crisis

Energy expert Adeel Ghayur has said that along with foreign investors, government should also focus on local investors to overcome the energy crisis.

Talking to a private news channel, he said that if private investors in Pakistan are encouraged they will be ready to invest in the field. He praised the inauguration of New Bong Escape hydel power project in Azad Kashmir and said that it is the first project inaugurated in the last few decades that does not come under the definition of mini or micro hydel power projects that are less than 50MW.

This project has been completed by private enterprise and it is strong evidence to the fact that private investors can be engaged if their concerns are addressed, he said.

Not police but technology will deliver

The bleak energy situation in the country is cause of serious concern and anxiety for the intellectuals, think tanks and most importantly for the new government of Mian Nawaz Sharif. In order to maintain desired level of sustained growth to meet the needs of growing population, Pakistan must have resources not only to maintain the present level of Energy Supply from the available sources but It must also ensure 6-7% annual increase in Energy Supply.

Till now the country has been primarily relying on two major sources of energy – Natural Gas and Electricity. The demand for Natural Gas has been rapidly increasing for use as domestic fuel, power generation and industrial production. As a result the country has been facing shortage of about 2000 MMCF/ day of gas due to depleting gas resources and increasing public demand.

As regards electricity at about 23000 MW installed generation capacity and about 18600 MW available capacity it exceeds the peak demand of around 15600 MW. A capable and competent professional and corruption free management , can overcome the pitfalls and mitigate shortages of Power and Gas.

The government of Mian Nawaz Sharif seems to have very clear vision about short term, medium term and long term objectives and solutions. However, resolute commitment to take unprecedented tough decisions to tackle the monumental problems confronting the Energy Sector is the need of this hour. The government will be faced with lot of resistance from many quarters, the energy thieves, energy mafia and the illegitimate beneficiaries as the failure has been on the part of the entire system. The government will need to ensure respect for the common man, avoid nepotism, fight corruption and vested interests with iron hand. A very critical analysis and review of reasons for the energy crisis would prove as a big help in resolving the crisis.

No matter how many more generation facilities are installed, the critical point remains that any system would work,” as good as the people who run it”. The total management structure has been infested with an alarming level of corruption.

The government immediately needs a comprehensive surgical operation. At least the heads of all related departments, ministries and operating companies need to the replaced with qualified, competent, experienced persons and then given well defined targets for achievement. It can be said without any shadow of doubt that if the age limit condition remains, as shown in the media, for the selection of the heads of the corporations, you can forget about getting the type of managers who are needed to run these corporations profitably. In that case all noble plans of this government will be doomed. The government needs to, seriously, review this aspect while launching the program of recruitment of chief executives of corporations.

In order to manage and control the energy theft the government may think among realistic technological measures, to opt for many administrative measures. The utility bill defaulters are mostly government departments, federal as well as local. At the federal level the utility bills can be ducted from the budget allocation of the federal departments in advance every month.

The distribution of power and collection of revenue in the provinces can be made the responsibility of the provinces and the cost of power supplied could be deducted in advance from the funds allocated to the provinces under NFC award. The provinces, if desired so, can be given the control of distribution companies within the province. However this administrative solution may have many pit falls. The provincial governments may not have the necessary resources and capacity to effectively manage this new responsibility. The provinces may go into default in the recovery of utility bills. Eventually the federal government may end up making the short fall which could even be more than the present level.

No accurate estimates are available for colossal theft of power & gas. However, the most authentic information is the statement of the ministry of Water &Power before a committee of the parliament in early months of 2013. According to this statement the losses of power had reached to an alarming level of 45%.Hence no wonder that when generation is 15400MW the available power supply to consumers is only around 9000MW. Similarly a colossal amount of gas around 108,000 MMCF, is lost in the system due to theft, leakages and other reasons, resulting in huge loss to the nation.

So far the government seems to be contemplating only punitive measures through police to control theft and recovery of revenue. It will never work. The police monitoring cells might be able to harass some consumers and get media attention for excitement and an eye wash. In reality the corruption which presently is the domain of the line man and power & gas sector hierarchy only will further spread and multiply to the monitoring police and even lower judiciary. This administrative but punitive plan will usher in new era of corruption and nothing else. In a matter of few days the whole plan will become the decoration of the dust bin for all times to come.

How to deal with the high & mighty, who steal energy, Electricity & Gas to a great extent, is the prerogative of the government itself. Most of the energy thieves belong to the respectable industrial and commercial groups and some,” Honorable men” even sit in the parliament. It has been seen in the past that many governments have not been successful in anticorruption campaigns as soon it hits the Haves. No administrative plan will work. Only a proven and fool proof technological solution which eliminates human intervention in the energy supply networks is the answer.

The implementation of a number of Technological proven Energy Efficiency Programs aimed at controlling losses, theft and ensuring recovery of revenue with the use of pre paid Smart metering Network for the energy being consumed are the most effective productive and vital steps that need to be taken. Without the implementation of such Technological Energy Efficiency Programs even the increase in Power Generation & supply of additional gas will not solve the problems. The Power & Gas losses will only continue to multiply.

Panel formed to review energy policy

The Council of Common Interests (CCI) on Tuesday deferred the new energy policy after Sindh and Khyber Pukhtunkhwa refrained from giving their immediate inputs and directed the constitution of a committee to give its recommendations within seven days.

The PML-N government unveiled its new power policy at the meeting of the CCI with ambitious targets.

Chaired by Prime Minister Muhammad Nawaz Sharif, the council, however, failed to accord approval to the much-trumpeted energy policy because of the fact that the central government shared the draft with the provinces just a night before the meeting and the provincial heads took the stance that they did not get the time to read the draft.

Sindh protested over the provision of deduction of Rs5 billion at source from the Divisible Pool which the central government did in the heads of power bills.

Sindh Chief Minister Syed Qaim Ali Shah adopted the stance that at source deduction mechanism mentioned in the policy of the outstanding bills of electricity was simply not acceptable, as the bill amounts needed to be reconciled first. Chief Minister of the Khyber Pakhtunkhwa also raised the same issue.

He is also said to have pointed out that the KP generates cheaper hydro power and gives it to the national grid but it gets back power at higher tariff. The KP consumers, facing the worst law and order situation, are unable to pay the higher tariff, he added.

A committee comprising the chief secretaries of the four provinces, secretary of water and power and secretary inter-provincial coordination ministry will review the power policy 2013 and draft bills of two ordinances to check gas and electricity theft.

The committee would give its input in the power policy and two draft bills of the proposed ordinances within seven days.

Addressing the 23rd meeting of the council, Nawaz said power thieves and government officials were hand in glove and held Wapda and other government departments responsible for the ongoing power crisis in the country.

The premier said the power issue needed a policy encompassing all dimensions and needing a strong will of the federal government as well as the federating units to make it successful. “The role of the provinces is crucial in making the policy a success,” he added.

The premier said the major problems being faced by the power sector were demand-supply gap, lack of affordability, inefficiency and power theft. He said major changes will beovercome these issues. He said Pakistan was producing 45 percent electricity through furnace oil that was costing too much and hence higher tariffs.

“Distribution losses which account for 25-28 percent and theft of electricity amounting to Rs140 billion per annum are the major causes of shortfall. We plan to finish load shedding within next 3-4 years through a multi-pronged strategy.

 “The strategy includes production of low-cost energy, tariff restructuring, efficient technology, transparency and merit-based system. Low cost energy will be produced by using coal and hydel power for power generation. Extraction of coal and development of infrastructure for power production will be carried out simultaneously to save time. Till such time that the local coal is available, it will be imported for power consumption,” he added.

He said run of the river projects were being initiated to overcome short-term demands while large dams including Bunji Dam and Bhasha Dam will be constructed over a period of time to overcome the irrigation needs as well as power shortage. He said power strategy was focused on bringing the power tariff down to the single digit in three years.

“Tariff restructuring is the main feature of the new energy policy through which subsidies will be gradually rationalized. The 200-unit consumers will be provided subsidies,” he added.

The premier said mismanagement and inefficiency of Wapda and other departments were responsible for this situation. “It is their responsibility that we are facing this situation today. They have miserably failed to maintain system and today our distribution lines cannot bear the burden. The 1400 megawatts of electricity can be brought into the system within one year only through proper maintenance of the system,” the premier maintained.

He said the government had to take lead in power projects’ implementation strategy and announced that the construction of Gaddani Energy Corridor which will provide services to investors for energy production.

“It will be a hub of electricity generation,” added the premier. The new policy moved the deadline of ending load shedding to four years. The other targets include reducing the line losses from 28 percent to 16.1 percent and bringing the tariff down to single digit, enabling the country to produce surplus power by 2018.

The new power policy contains seven points with a mission statement that Pakistan will build a profitable, bankable and investment-friendly power sector focused on meeting the needs of its population and boosting its economy in a sustainable and affordable manner.

When contacted, spokesman for the Prime Minister’s Office Mohiuddin Wani clarified that it was not the energy policy, rather it was power policy 2013 and the gas policy would be approved after Eidul Fitr.

He said the participants of the CCI were given a presentation on the power policy and all the chief ministers including the chief ministers of Sindh and KPK appreciated it.

However, they (Chief Ministers) wanted to give their inputs in the draft bills of the two proposed ordinances and on this the prime minister asked the chief ministers to also give their input in the power policy.

When asked if the Sindh government had highlighted the issue of at source deduction of electricity bills that the four federating units owe to pay, Wani said the Sindh government had raised the issue but Finance Minister Ishaq Dar clarified that the Federal Adjuster would only deduct 70 percent of the electricity dues of the provinces to be piled up in future after clearing the present dues.

However, the 30 percent remaining dues would be adjusted in the reconciliation process. This mechanism will help not build up the volume of arrears to be paid by the federating units and would ensure better cash flows.

Under the policy, the govt-owned power plants and few power distributing companies (Discos) would be sold out bringing the double digit cost of power generation to single digit, restructuring of water and power ministry, National Electric Power Regulatory Authority (Nepra), Oil and gas Regulatory Authority (Ogra), adjustment of outstanding dues that the government and privately-owned bodies are bound to pay back, through federal adjusters, and formation of regional transmission and power trading system would be made.

The power policy draft says Pakistan’s power sector is currently afflicted by a number of challenges that have led to a crisis: a yawning supply-demand gap where the demand for electricity far outstrips the current generation capacity (up to 4500-5000mw). Highly expensive generation of electricity (Rs12/unit) is due to an increased dependence on expensive thermal fuel sources (44% of total generation). A terribly inefficient power transmission and distribution system currently records losses of 25 to 28% due to poor infrastructure, mismanagement and theft of electricity.

Goals: The power policy highlighted the goals that include i) To achieve the long-term vision of the power sector and overcome its challenges, the government of Pakistan has set the following nine goals: ii) Build a power generation capacity that can meet Pakistan’s energy needs in a sustainable manner.

The policy also disclosed that efficiency would be predicted on three pillars of merit order, transparency/automation, and accountability.

 Merit order will be privileged fuel allocation on the basis of efficiency set a tariff structure that encourages efficient technology and management, optimise dispatch and payments and retire high cost power in favour of lower cost sources.

The transparency will be achieved by providing greater and easier access to information through a public website and by optimising transmission through technology and automation. And, accountability will be ensured by hiring solely on the basis of competency, signing performance contracts with heads of all entities, and exercising zero tolerance towards corruption and poor performance. Similarly, competition will be built on three pillars: upfront tariff and competitive bidding, and key client management.

Infrastructure will be developed and incentives provided to attract greater private sector investments. The government will set the foundations of energy cities and corridors and sponsor public-private partnership for coal and run of river projects.

The government will also redesign and strengthen the national grid transmission network and build a regional transmission and power trading system. The government would like to limit its role to policy making and unless necessary, service delivery will be promoted through a fiercely competitive and transparent private sector.

The tariff and competitive bidding process will be controlled by a world-class regulatory authority. Up-front tariffs will be set for low cost fuel and competitive bidding will be used to decrease the costs further.

Similarly, a transparent and competitive process will be established to privatise government assets. Under the policy, the government will assign “key client managers or relationship managers” at the Ministry of Water and Power who will act as a one window operation for investors in the power sector and ensure the timely completion of investments and projects.

Again, sustainability will be grounded on three pillars of low-cost energy, fair and level playing field and demand management.

It is also mentioned in details in the policy that the low cost of energy will be ascertained by altering the fuel mix towards less expensive fuels such as hydro, biomass and coal. The power sector will be afforded a privileged access to gas allocation. Investments required for the low cost fuel mix will necessitate rationalization of the electricity tariff.

Similarly, fairness will be ensured by protecting the poor and cross-subsidizing their consumption from affluent domestic, commercial and industrial users all across the country. And, demand management will be introduced through time of day metering; setting technology standards (such as Green Star compliance) for electrical appliances; mandating energy efficient building standards; and subsidizing low cost renewable energy among consumers.

Overall, the strategy to achieve the above goal is focused on attracting and directing local and foreign investments towards rapidly expanding the power generation capacity. Investments can only be encouraged if the sector is made attractive and bankable by treating the subsidy to the abject poor and clearing it out through cross subsidization mechanisms.

In the short run, the government has already brought the existing capacity online by retiring the circular debt. This action has provided financing to plants that were dormant due to lack of feedstock and or disputes.

In the medium term, the power ministry will attract new investments and expedite the pipeline projects on a war footing by employing a key client management system. In the long run, large infrastructure programs such as the Indus River Cascade will be aggressively developed.

The strategy focuses on shifting Pakistan’s energy mix towards low cost sources such as hydel, gas, coal, nuclear and biomass. Local and foreign investment will aggressively sought for small and medium size run of river hydel projects.

Selected hydel projects under development will be positioned for privatisation. Multilateral agencies will be invited to partner in large infrastructure hydel projects. LNG terminals will be developed in close collaboration with friendly countries such as China. Development of coastal energy corridors based upon imported coal (mixed later with local coal), rapid proliferation of coal mining all across the country-especially at Thar and conversion of expensive RFO (residual fuel oil) based plants to coal are the central tenets of coal policy.

The proposed strategy will change the energy mix of Pakistan in favour of low cost sources and significantly reduce the burden of energy to the end consumer.

Once relief from load shedding is forthcoming because of a decreased supply and demand gap, this strategy will focus on redirecting the supply of fuel from inefficient Gencos to the most efficient IPPs (independent power producers). This reallocation alone has the potential of saving Rs3billion per month and generating an additional 500 MW electricity. At the same time, the water & power ministry will sign performance contracts with Gencos, PSO and fuel transporters and hold them accountable for the quality and theft of oil. Fuel procurement contracts may be made open sourced to eliminate the power of a single supplier. Leakage will be plugged by building fuel pipeline where possible and open decanting. In the event that fuel is found to be missing or adulterated, the fuel economic value of the fuel will be appropriated to the end receiver.

The electricity generation strategy focuses on establishing plant efficiency through external heat rate testing, building a merit order accordingly, and allocating fuel to the more meritorious plants. Allocations will be made public online to increase transparency. The strategy calls for the privatization or O&M based leasing of GENCOs.

Transmission Strategy: The transmission strategy is based on installation of upgrade SCADA software to optimize transmission and monitor its losses. Dispatch will be based on economic order and internal/audit control will be established on dispatch and payment. Plants will be built closer to load centers; high voltage transmission lines will be expanded; and the 220kv rings around cities will be strengthened.

Distribution strategy: In short-term, performance contract will be signed with the heads of distribution companies and their respective boards focused on reducing distribution losses due to technical reason, theft, and lack of recovery/ collection. Smart meters will be installed at the feeder level, profit and loss accounts will to be managed at the feeder level, and the accountability will be appropriated to the Executive Engineer. A regime of reward and punishment will be use to improve efficiency and decrease theft.

In the medium term, the efficiency will be improved by privatizing a selected number of distribution companies.

Financial Efficiency Strategy: The strategy is predicted on collecting outstanding receivables from provinces and government departments. The Federal Adjuster will be appointed to settle disputes. GST refunds will be collected from the FBR and a mechanism will be built to avoid future build-ups.

The financial efficiency strategy is geared towards punishing private defaulters and proposes severing the electric connection of defaulters after 60 days of non-payment and only reconnecting them to the grid with pre-paid meters. External collection agencies may also be sourced to improve cash flows. At the same time, load-shedding may be focused on areas of high theft and low collections as opposed to the current structure of indiscriminate load-shedding.

Governance strategy: The governance strategy calls for the notification of an Official Coordination Council comprising the Ministry of Water & Power, Ministry of Petroleum, Ministry of Finance and Planning Commission. This council will ensure information integration between all these ministries and will assist in policy formulation and decision making related to energy.

The strategy requires the reformation of structural and regulatory aspects of Nepra and Ogra to improve efficiencies. New business models including power exchanges and wheeling charges will be explored. Finally, the Ministry of Water and Power will be restructured to strengthen its functional expertise. Directorates will be created for key functions (i.e. generation, transmission and distribution) and key organization such as CPPA, and NTDC will be reformed.

Nawaz to end loadshedding in three-four years

The government has no plans to enhance the tariff for the consumers using 200 or less units of electricity though tariff enhancement is part of the structural reform of the energy plan, said Prime Minister Muhammad Nawaz Sharif in his interaction with senior newsmen at the Prime Minister Office (PMO) on the government’s energy policy.

Malik Muhammad Musaddaq, Special Assistant to the PM on Energy who gave a briefing on the energy policy, assured the audience that power loadshedding would come to an end in three and a half years.

The prime minister discussed various aspects of the energy policy with the senior journalists. Federal ministers Senator Ishaq Dar, Senator Pervez Rashid, Shahid Khaqan Abbasi, Khawaja Muhammad Asif and minister of state-designate Abid Sher Ali, secretary information Dr Saeed Nazir, PIO Syed Imran Gardezi and press secretary to the PM Ghulam Mohayyudin Wani were also present on the occasion.

The prime minister said the government was devoting much of its time and energies to overcoming the energy crisis to ensure smooth availability of electricity to domestic users, industries and other sectors.

He blamed the poor policies and lack of attention of the previous governments for the power sector crisis. He further said that not only production of cheap electricity is a challenge, revamping the transmission and distribution system also needs due attention and huge investments.

The premier warned that the government will not only impose heavy fines on gas and power thieves, but also jail them that will serve as deterrent to others.

He said in the US and Europe gas and power thieves were not only made to pay whole bill including the penalty, but also jailed for two to five years and the PML-N government will also follow this practice.

He said the government was bringing major amendments to gas and power regulations which will include imprisonment, huge fines and other penalties.

“Those stealing gas and power are national thieves and if we failed to arrest them, then we will stop bringing the thieves to book,” said the premier in a determined tone.

“If India can generate cheap electricity from coal, then why not Pakistan?” He said the investors generating power from coal in India desired their participation in the tenders for power generation in Pakistan. He said India had been generating thousands of megawatts of power from coal but no government in Pakistan made a sincere effort in this regard.

Talking about the challenges faced by the government, he said most of the state-owned institutions including PIA, Railways and Pakistan Steel Mills are eating up billions of rupees of taxpayers’ money. He said he believes in transparency, good governance and fair play and would ensure them at all costs.

He said those who steal electricity worth billions of rupees should be brought to justice, as they not only deprive thousands of this facility, but also harm the national economy.

The PM urged the media persons to give their input in the government’s energy policy so that the country is relieved of this menace. He said it is a national issue and everybody must contribute to make this government’s energy policy a success.

Earlier chairing the 23rd meeting of the Council Common Interests (CCI) the prime minister said that his government plans to completely end load shedding of electricity within three to four years through a multi-pronged strategy.

Tariff restructuring is the main feature of the new energy policy through which subsidies will be gradually rationalised. The 200-unit consumers will be provided subsidies.

The prime minister said 1400 megawatts of electricity could be brought into the system within one year through proper maintenance of the system. He said the government has to take lead in power projects implementation strategy. He announced construction of Gaddani Energy Corridor, which would provide services to investors for energy production. It will be a hub of electricity generation, the prime minister added.

The prime minister said the energy crisis needs a policy that encompasses all dimensions and also a strong will to make it successful. “The role of provinces is crucial in making the policy a success”, he added.

He said that major problems being faced by the power sector are demand-supply gap, lack of affordability, inefficiency and pilferage and power theft. He said that major changes would be brought about in the system to overcome these issues. He added the country was producing 45 percent of electricity from furnace oil, which was too expensive for power generation and had led to higher tariffs. The distribution losses, which account for 25-28 percent and theft of electricity amounting to Rs140 billion per annum are major cause of the shortfall, he added.

The prime minister said the implementation of the policy would not be an individual effort but a collective endeavor to overcome power shortage and in this regard the input of the provincial governments will be very important. He highlighted the role of the provinces in curbing power theft, asked for their cooperation in curbing this menace and promised all assistance to the provinces.

The meeting was attended by Chief Ministers Shahbaz Sharif (Punjab), Syed Qaim Ali Shah (Sindh), Pervaiz Khattak (KPK), Dr Abdul Malik Baloch (Balochistan), federal ministers Khwaja Asif, Ishaq Dar, Riaz Hussain Pirzada, Shahid Khaqan Abbasi, Ahsan Iqbal, Pir Syed Sadaruddin Rashidi, Lt Gen (R) Abdul Qadir Baloch and officials concerned.

LNG has potential to help overcome Pak energy crisis

Commenting on the likely agreement with Qatar for purchasing LNG, Kamran Khan said in his programme ‘Aaj Kamran Khan Kay Sath’ on Monday that overcoming the energy crisis is the government’s first priority and so the government has decided to purchase Liquefied Natural Gas (LNG) from Qatar.

This is a huge project through which the country is to purchase $3.5 billion worth of LNG from Qatar.Kamran Khan said that the LNG has the potential to overcome the country’s energy crisis, but at the same time it is important to determine whether this is the best price we are getting from Qatar and what is the price trend in this connection in the world.

The energy sector is making some progress worldwide, and some recent developments suggest that there is a likelihood of the price of LNG falling.

Kamran Khan said as far as purchasing LNG from Qatar is concerned the government has secured exemption for itself from the transparent PPRA rules being applied in this case. This is going to be a direct agreement.

He said that it is being said that this is a direct government-to-government agreement, but it has been observed that Qatar has brought an American company, ConocoPhillips, into the equation and said that the government of Pakistan has to deal with ConocoPhillips. A delegation of the American company is arriving in Pakistan on July 30.

Commenting on the next president, Kamran Khan said that it is becoming evident that Nawaz Sharif wants to nominate former governor of Sindh, Mamnoon Hussain, to be the party’s candidate. Mamnoon Hussain has been an old associate of Nawaz Sharif, and he even stood with Nawaz when his government was toppled and he was imprisoned.

Commenting on the sorry state of affairs at some national organisations, Kamran Khan said that the dilapidated condition of the public sector organisations has been a nuisance for the Nawaz government. The government wants to reform the public sector organisations. PIA and the Civil Aviation Authority (CAA) are government’s priorities. Among the very first steps by the government was the decision to withdraw PIA and CAA from the Defence Ministry and to place them under a separate division.

In a different segment of the programme, Kamran Khan said that the situation in Karachi is of utmost importance to the federal government, and this was reflected when the Federal Interior Minister Chaudhry Nisar Ali Khan arrived in Karachi on an official visit and took stock of the situation. He brought with him a goodwill message for the Sindh government vis-à-vis the federal government’s desire to help the provincial government on Karachi. Improving the situation in the port city is one of the priorities of the federal government.

Commenting on the economy, Kamran Khan said that the change of government has boosted the confidence of the investors. This phenomenon is best reflected in the stock markets. The index at the Karachi Stock Exchange has increased by nine percent in the last month and a half. The thing to be noted is that the price of the shares of the corporations in the public sector is going up. This indicates that the investors believe that improvements in the functioning of these corporations are on the way.

Senior analyst Farrukh Saleem, while speaking to Kamran Khan in the programme, said that the expected agreement with Qatar on LNG is not a government-to-government agreement. He said that the royal family of Qatar has partnerships with two or three oil companies, ConocoPhillips being one of those companies.

Farrukh Saleem said as far as price is concerned it should be remembered that we will be bound by those prices for the next 20 years. He said that the government of Pakistan is going to enter into LNG agreement for almost $18 a unit whereas India in December 2011 had an agreement with Qatar for $13 a unit.

The adviser to the PM on aviation, Shujaat Azeem said in the programme that new-generation aircraft will be added to the PIA fleet within two months.

57pc support importing 100MW power from India

Some 57 percent of Pakistanis have favoured purchasing 100 MW electricity from India while 46 percent are of the view that the prevailing energy crisis is difficult to end in next three years.

In a Gallup survey on the energy crisis conducted with the coordination of Geo in all the four provinces of the country from 8 to 10 July, a representative sample of men and women were interviewed.

The main question of the survey was: “Are you in favour of purchasing 100MW power from India?” As many as 27percent people replied in positive while 30 percent gave their mixed response. However, 12 percent people opposed the idea while 9 percent opposed to some extent. As many as 15 percent people remained impartial and 8 percent did not reply.

When asked what the possibilities of ending the energy crisis in next 3 years was, 46 percent viewed it was difficult while 26 percent termed it impossible but 23 percent hoped the crisis would end and only 4 percent did not reply.

When asked if they would accept 30 percent raise in tariff to end loadshedding and power crisis 29 percent replied in favour while 23cent replied in negative and 5 percent did not reply.

Govt on track to resolve energy crisis: experts

The country’s ailing energy is recovering at a satisfactory pace as the new government has substantially reduced the production cost by simply applying a merit order in which the lowest cost producers are given preference, experts said on Monday.

Power experts say gas-fired power generators run by independent power producers (IPPs) were denied gas throughout the tenure of the previous government and when they were asked to produce power they had to use high speed diesel, which is seven times more expensive than gas.

Meanwhile, most efficient furnace oil based IPPs remained idle while public sector power generation companies were asked to produce electricity between Rs21 and 28 per unit against an average of Rs14.50 per unit power produced by IPP – dramatically increasing the production cost of electricity.

However, after clearing the entire circular debt of IPPs, the government ensured sustained production of power at lower rates.

The power experts argued that the new government is fortunate to have inherited the current system when hydel generation is high – providing breathing space for the government to chalk out a strategy to reduce losses by targeting power thieves, evaluating higher tariff for industries and commercial consumers and targeting subsidies geared towards lower income group.

Former WAPDA chairman Tariq Hameed said IPPs are producing power at full capacity. The total power generation of IPPs stood at 9000 MW, including the 600MW Chashma power project, 6100MW from projects added under the 1994 power policy and 2900MW added under the 2002 power policy, while nuclear power generation stood at 600MW from IPPs.

According to rules determined by WAPDA, Hammed said, six percent of these generators remain closed for annual repair and maintenance at any given time. “This means that a capacity of a little over 500MW is not available, reducing the availability of IPP capacity at any given time to 7900 MW,” he said.

He said the country is now producing between 14000 and 15500MW electricity daily depending on the indent issued by the National Transmission and Dispatch Company (NTDC). “We can expect addition of another 500MW when one of the Mangla generators becomes operational,” he said, adding that hydel generation at present ranges between 5500 and 6000MW.

The former WAPDA chairman said public sector thermal power generation is costly and ranges between 1900 and 2200MW against production capacity of 3150MW. Further, he said, the current energy mix is favourable for the power sector as far as the cost of production is concerned, he added.

Power sector expert Mohsin Syed said the cost of 5500MW hydel generation supplied by WAPDA is Rs1.27 per unit. He said 2000MW of power is being produced from gas which costs Rs5 per unit (ranges between Rs2 and 7 per unit). The nuclear power of 600MW produced at Chashma, he added, costs Rs6 per unit.

He went on to add that 8100MW power available in the system is low cost, while the remaining 6000-7000 MW is produced through furnace oil at average cost of Rs16 (ranging between Rs14.5 and Rs21 per unit in some public sector companies).

Syed said the average cost of power to the distribution companies fell from Rs15 per MW to around Rs8.50 per MW. After accounting for line losses at 20 percent, the cost will increase to Rs10.2 per unit, he said, adding that the average selling price of the government is Rs9 per unit. “The government will still lose Rs1.20 per unit on power supplies,” said Syed. However, he added, the loss is substantially lower than what the government or PEPCO was incurring two months back.

US to help Pakistan end energy crisis

Vinay Chawla, Deputy Coordinator for Development and Assistance, US Embassy Islamabad, said the US government will help Pakistan end the energy crisis besides enhancing trade between the two countries.

Addressing a meeting at the Faisalabad Chamber of Commerce and Industry (FCCI) on Monday, Chawla said the United States government also wanted to enhance its economic relationship with the present government.

“US civilian assistance to Pakistan has five pillars including energy, economic growth, community stabilisation, education and health,” said Chawla, adding that the US’ development cooperation budget for Pakistan is the second largest in the world with USAID providing over $2.8 billion in assistance since 2009 and $723 million in 2013.

Chawla said energy projects had added 900mw to the power grid, which would reach 1200mw by 2014, to supply electricity to an estimated three million households.

Govt planning energy generation from bagasse: Shahbaz

Chief Minister Shahbaz Sharif has said that there is a vast scope of generating energy from bagasse in the province and the government is formulating a comprehensive policy in this regard. He said there were 46 sugar mills in Punjab and power could be generated from bagasse which was an economical source of generation of electricity, adding that foreign exchange of billions of rupees, spent on the purchase of furnace oil, could also be saved by producing energy from the alternative resources. He said the government was trying to generate electricity from the alternative and renewable resources for overcoming the energy crisis.

He was talking to a delegation of an engineering company associated with power generation, Avant Grade Engineering, at Model Town on Monday.

Shahbaz said Pakistan was facing the worst energy crisis which had not only affected the common man but also left a negative impact on economic and trade activities. He said electricity was essential for economy and trade; therefore, the government was attaching top priority to overcoming the energy crisis and was taking steps for the purpose. The CM said that agreements were signed with Chinese companies and leadership during the visit of Prime Minister Nawaz Sharif to China for cooperation in this sector while steps were being taken expeditiously for power generation from alternative resources. He said upgrade of boilers in sugar mills could result in generation of more energy, adding that several countries of the world were generating power from bagasse which was a cheap source of power generation.

The chief minister directed the authorities to prepare a financial model for power generation from bagasse and the departments concerned should present such a roadmap with the consultation of the experts of the company he met on Monday for power generation through which bagasse could be speedily implemented. Shahbaz said the goal of producing electricity from bagasse could be achieved by upgrading the technology of sugar mills and experts should chalk out a plan for the purpose so that progress could be made in this direction without any delay.

Avant Grade Engineering Director Bala Supramanium gave a briefing on the projects of generation of power from bagasse, coal as well as biomass.Later, Chris Holmes of Global LNG Market Outlook, Julian Nambert, Regional Director Middle East and Stephene Canpron, Head of LNG, also met with the CM and gave a briefing on increasing demand of LNG.