August 03, 2022

    Meeting the energy demand

    During the last couple of months, the country has been experiencing long hours of load shedding ranging from 8 to 14 hours a day. The reasons cited include fuel shortage, closure of power plants and the heatwave that has hit various parts of the country.

    The early on-set of summer has made meeting the country’s power demand difficult. The News on Sunday talked to experts on the impact of heatwave on energy demand and the ways in which the situation can be tackled.

    Aisha Khan, an environmentalist, says that the current heatwave should not have come as a surprise. The scientific community has been alerting the world for decades about global warming and climate change but has failed to elicit the desired action, she says. There have been heatwave occurrences in the past, she says, but this year it has happened in March-April and therefore, raised alarm. “We should be prepared for more freak events as we go through this phase of climate variability. Increase in temperature will have a cascading effect. It will increase power demand in many sectors. This includes water, agriculture and electricity.” Simultaneously, she says, it will reduce productivity, increase healthcare costs and widen the gap between supply and demand.

    “The increase in population has increased the demand for electricity. As the weather gets hotter the demand threatens to outpace supply creating a food, water and energy crisis.” This makes a strong case for transitioning to renewable energy and investing in solar for meeting rising demands. “We should see this heatwave as an early warning for the catastrophes that are likely to follow ranging from floods to droughts, and plan accordingly. Global warming is called an existential threat for a reason. It can wipe out life and therefore, should be treated as an emergency.”
    The maximum load our power distribution system can currently support is 27,000 MW. When demand exceeds this amount (it does in June-July), the excess installed capacity will be useless. The grids simply trip. Load shedding is the only solution in such cases. The distribution capacity is being improved but the process is slow. Last year, maximum load dispatch achieved was 27,000 MW. The actual demand in the system is higher. This necessitates load shedding. The installed capacity in the country is close to 40,000 MW.

    Amir Iqbal, the Sindh Engro Coal Mining Company (SECMC) chief executive officer, says that Pakistan’s current energy crisis is largely due to an import-driven energy mix. Prices for furnace oil, high-speed diesel, and LNG have all increased significantly, leaving the country struggling with severe energy challenges, he says. This has caused a major hit on the country’s forex reserves and the economy at a macro level.

    The solution to this pressing issue lies in utilising indigenous resources for power generation, for which Thar coal is the answer, he says. It is cheap, abundant and ready to be utilised. A 660 MW plant is already functioning. The local coal costs about $65 per tonne, which is substantially cheaper than imported coal. As the mining operation expands, the price will likely go down to below $30 per tonne by 2024. This will reduce the power generation cost benefitting the end consumer, particularly the industrial sector.

    Imran Rana, a spokesman for Karachi-Electric (KE), says the current heatwave across the country is driving a surge in electricity demand. He says K-Electric is taking all possible measures to provide relief to its consumers.

    Keeping in view the harsh weather conditions, he adds, the KE has halted all maintenance shutdowns across the city. Furthermore, he says, under the supervision of its chief distribution officer, the utility has setup an emergency cell that includes other senior officials of the company. This emergency cell will monitor the situation 24/7 and utilise all possible resources to provide relief to consumers. The KE is also collaborating with welfare institutions and setting up heatwave relief camps in the city. He says that the KE is in touch with regional administrations as well as government institutions and continues to update them on the power supply situation in the city.

    Across the country, load shedding is dependent on transmission and distribution losses, particularly the ratio of theft of electricity and the percentage of bills being paid in an area. However, in exceptional circumstances, when the gap between power supply and its demand become too large, relevant distribution companies can also carry temporary load management measures to manage the shortfall. In KE’s case, the load-shedding schedule is kept updated on the company’s website. Also, registered KE customers who may face an interruption in power supply are informed via SMS by the company.

    Heatwaves and inclement weather conditions continue to remain a challenge around the globe and in Pakistan. During the current heatwave in the country, the overall availability of power remained a challenge where distribution companies (DISCOS), including KE, at times had to undertake load management measures to bridge the gap between demand and supply.

    Syed Saifullah Kazmi is a renowned economic and financial expert with more than 19 years of experience, closely analysing financial and operational performance of the power sector. He tells TNS that a considerably higher temperature was witnessed in April 2022, which increased the demand of electricity. The situation worsened due to water shortage in dams, which put all the pressure on fossil fuel-based plants, he says. Meanwhile, LNG purchases were not made from spot market and the huge requirement of furnace oil could not be met by local refineries. Also, he says, some plants were under scheduled and forced outage due to technical reasons.

    By the first week of May, supply of fuel improved due to import of several ships of furnace oil. The ordering of additional cargoes, three each, of LNG for May and June, and supply of gas to plants has made the situation considerably better. The situation may remain under control on generators’ side if the payments are made timely to all stakeholders as higher fuel prices require higher cash flows.

    Power demand is increasing consistently compared to last year. This may put pressure on supply side if the water shortage persists, says Kazmi. Also, he adds, transmission system bottlenecks may trigger forced load shedding during peak summer demand. Areas with large revenue shortfall (theft) will continue to bear load shedding. A strong resolve is needed on the part of the government to control system losses – i.e., low recovery, theft and transmission and distribution losses. No system can flourish with 17 percent system losses, he adds.


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