Syed Akhtar Ali PIDE OnLine Conference Pakistans Energy Issues IndiaPakistan Comparative Power Profile INDIA PAKISTAN Peak DemandMW 192000 25000 Installed CapacityMW 370000 ID: 1029444
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1. Pakistan Power Investments: Cost & Planning IssuesSyed Akhtar AliPIDE On-Line ConferencePakistan’s Energy Issues
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3. India-Pakistan Comparative Power ProfileINDIAPAKISTANPeak Demand-MW19200025000Installed Capacity-MW370,00036000Electricity Coverage-%99%77%Per Capita Consumption1181 kWh500-971 ? kWhT&D losses-%2121Solar Mission-Target100,000 MW13000 Solar,11000 WindSolar Capacity Existing40000 MW362 MWWind Power Capacity37669 MW1237 MWRenewables Market Share17% excl Hydro4.4%
4. PowerPower System Institutional RolesCCoEStrategic DecisionsMinister of EnergySectoral Responsibility inc Fuel SectorECCPricing, Subsidies, CAPEX Planning CommissionPC-1,third-party roleNEPRATariff, oversightSAPMCoordination, AdvicePower DivisionControl, establishment, Policies, Sectoral Planning, CoordNTDCTransmission, Power PlanningCPPAPower PurchaserNPPC-Micro-planning ,scheduling and dispatchIPP,GENCO,WAPDA,PAECPower GenerationDISCOsDistributionPPIB,AEDBProject Facilitation, Tariff Proposals(provinces,CCI,CPEC)
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6. From Deficit Crisis to over Supply Crisis
7. Peak Power Demand-MWActualComputed2017-182050026000Projected-2019-202200030,000Actual-2019-201954821732Projected 2030Low base 29000-39000High Base 39000-49000Peak Demand RoG %3.8-4.3,4.9-5.3,6-6.3%GDP RoG %4.5,5.5,6.5 %Source: NTDC IGCEP-2047
8. Comparative Power Demand Projections of various Studies-MWPeak Power Demand- MWGDP Growth%Year202020302040JICA-Base Case-20163391357413949808JICA-High Case-201636314698741283779NTDC IGCEP-47Low GDP-202039111645384.5NTDC -IGCEP47-Normal GDP43820831555.5NTDC-IGCEP47- High GDP growth487181065176.5Energy Security Plan-20087221016259010SNC LAVALIN-2011-Low4261282457SNC LAVALIN-Normal49824107477SNC LVALIN-High54998128039Source: NTDC
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10. Indicators of Planning ProblemsNTDC IGCEP does not include Bhasha Dam, while WAPDA signs contract for BhashaPC Electricity Security Plan -2005 allocates Gas Power Plant Capacity 83760 MW as opposed to 162,590 MW total Capacity in 2030.There was no Gas Supply potential nor imports no LNG in 2005Lack of Resource knowledge and Consensus
11. Demand Supply PlanningDemandSupplyEstimationAcademia, EconomistPower PlannersVariablesGDP, Prices,CPI etcCost, Efficiency, Capacity ParametersGrowth rate, ElasticityCost Functions,RoILocations etc
12. Planning ProblemsEconomic growth Uncertainties; varying GDP growth RatesVarying Political CircumstancesEnergy Demand ForecastingEnergy Demand function of Income(GDP) and Prices(Tariff)Lack of interaction; Academia vs Energy sectorMisuse of Regression Analysis SoftwareNo consensus Model-Elasticities?
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14. IGCEP-Indicative Generation Capacity Expansion PlanIGCEP-40 Vs IGCEP 204720 years PlanReturned by NEPRA without substantive CommentAnother Public Hearing July 15th50,000 MW capacity proposed to be added 2021-30?20,000 MW Committed already30,000 MW uncommittedLow Demand and Circular Debt Challenges
15. IGCEP-Indicated Generation PlanUnitLowNormalHighGDP RoG%4.55.56.5Demand MW-RoG%3.8-4.34.9-5.36-6.3Generation-2020-21GWh159,003162,472165,662Peak DemandMW2814328,75529,320Generation-2024-25GWh185,203?188,792200,096Peak DemandMW3207634,20936,257Generation 2029-30GWh212418237,990264,595Peak DemandMW3911143,82048,717Capacity 2020-21MW36,000Capacity 2024-25MWCapacity-2029-30MW78,762
16. Forecast Year-wise Demand-IGCEP-2047:Theoretical high base vs Actual low BaseIGCEP-2047 High BaseIGCEP-2047-Low Base ActualLowNormalHighLowNormalHigh2018-192562725627256272562725627256272019-202684427128273912000020000200002029-30391114328048718297473288936327GDP-ROG%4.55.56.54.55.56.5Peak Demand-RoG-%3.8-4.34.9-5.36-6.33.8-4.34.9-5.36-6.3GWh-RoG-%2.8-3.94-55-62.8-3.94-55-6Source:IGCEP-2047 NTDC, Author's Estimates
17. Total Installed Capacity under IGCEP by 2030HydroTharImported coalThermal/Gas/RLNGNuclearSolarWindTotalExisting capacity-2019871333039601467430104836000Comm. Capacity addition-20305154327016201263330037389920300Candidate Capacity-203026302174486812000833230685Subtotal Capacity addition7784577416206139127731027945891Retirement7629Bhasha4500Total2099757745580245674767127731027978762Source: NTDC, NEPRA, Author's Estimates
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20. Cost of Generation& TariffPoverty, Theft and Elite Capture
21. Typical COGEFossil : 8 USc per kWh-Rs 12.00Solar & Wind: 4 USc per kWh-Rs .6.00Hydro : 8 UscNuclear : 10 Usc-secret ?CAPEX typical: 1 million USD/MWTypically 40% higher than elsewhere
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23. Comparative Solar & Wind Power TariffFoundation-1 WindWestern WindAccess SolarReferenceActual March 20O & M Local0.4490.39530.5295O &M Foreign0.4491.53242.5947Insurance0.16510.20810.78330.7833RoE1.27541.79643.91656.054RoEDC0.11490.07980.78931.3592Loan Repayment2.35462.32165.7944.0842Interest0.94360.17497.11869.2726Total5.68286.234315.914623.8942exchange rate-USD100.5155.35KIBOR9.6313.49LIBOR0.331.91Source:NEPRA
24. Comparative Fuel and O&M Cost Coal Power Plants-March 2020FuelO&MTotalRs/kWhPort Qasim CPP5.41970.16275.5824Sahiwal CPP8.1960.17988.3758China Hub CPP5.06880.49725.566Engro Thar Lignite PP2.07151.06733.1388Sahiwal Transport Cost2.7767Sahiwal Net Fuel Cost excl Transport5.4193Source: NTDC
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26. Cost IssuesNEPRA Parameters-Interest rates Margins, O&M etcCAPEX Determination and Jacking-zero EquityOver Capacity and Capacity underUtilization-40%Undue EscalationsHigh O&MSeasonal Difference in DemandEnergy not Utilized due to T&D IssuesT&D losses and TheftCross SubsidyPolitical Admixture-CPEC,Nuclear
27. New Contributors to Circular DebtLIBOR and KIBOR increase quadrupling from less than 0.5 % to over 2%;has come down nowExchange Rate Devaluation-continues to be thereCombined Effect 50% increase in debt servicing &RoI in Rupee Terms70% rise in Capacity Payments(Ra 1.045 Tn in 2021 to Rs 1.7 Tn in 2025) from by 2025;will demand increase by that margin?
28. T& D losses-TheftMore than 20%-adds 4-6 Rs to TariffPoverty-consumer and InspectorSame in India and Bangladesh and L.A.Used to be 30% in the beginning in the U.S.ASome technical solutions-smart meters @ consumer or D.T.35 million meters,5 -7 billion USD,7-10 yearsCan be reduced to half ;with difficulty; reduction of 2-3 Rs in Tariff of Rs 20 or so;all cost elements have to come down
29. WAPDA EX-DISCO Distribution Cost-2017-18LossesUnit Sales PriceUnit PPPUDM+%Rs/kWhRs/kWhLossesIESCO8.6514.931010.31374.6173LESCO11.7616.118411.04845.0700FESCO10.2417.353311.50195.8515GEPCO10.0314.659511.34133.3182MEPCO1517.799411.97795.8215PESCO31.9521.653214.40737.2459HESCO22.5923.836118.97904.8571QESCO17.517.248912.28724.9617SEPCO29.7520.863813.83857.0252TESCO12.4714.516712.37672.1400Total15.5317.356511.86345.4931Source: NEPRA Annual DISCO Determination Annual-2017-18Revenue Requirement
30. Oil vs Power SectorsOilPowerSovereign GuaranteesnoneyesPurchase GuaranteesnoneyesPrice AssuranceInternational PricesyesProtection5%40-100%Take or Paynoneyes
31. Why Coal still ?Imported Coal & LNG-short term solutionsThar Coal-late starter; will remain unfullfilled dream; no future beyond 2030India started Thar in 1970s;Europe Lignite 1950sOnly 5000 MW ? In IGCEP 2030Water IssuesHigh cost of local Thar coal-twice the cost elsewhere
32. Renewable Energy-Solar & WindMore Solar than Wind-available everywhereDistributed generation; no transmissionMore at consumer premisesCheaper than Fossil-4 Usc or less vs 8-10 UscHowever, Problems at Utility level; weak gridsStorage required; expensive; another 10 years10 % share possible to-date;5-7000 MW in 2020-30IGCEP provides for higher share but may not be achieved due to slower demand and other priorities,Bhasha-4500 MW
33. Renewable StrategyDistrict based generationRural Electrification: 1-2 MW per location-BalochistanConsumer based roof top:1-5 kWAverage District Demand=200 MW x 100=20,000 MWAvg. District Demand 2030 =300-400 MWx100=30-40000 MWKarachi: 4000 MW LHR: 3000 MW25% Market Share possible thru Distributed generation; grid-based options undesirable
34. SolutionEPC based competitionTariff based auctionsElectricity MarketPrivatizationOrganizational & Governance ReformsRegulatory Reforms
35. Strategy: Distributed REN GenerationNo more fossil power plantsNo more centralized generationThere is enough base-load capacityAfter committed projects, only REN projects to be addedDistributed generation, preferably, after 2025It would be at-least half cheaper