Energy projects

Published December 18, 2014

THE prime minister’s visit to China some time ago apparently resulted in deals and MOUs on projects expected to generate some 10,000 MW of energy — on the face of it a positive development though essential details are still awaited.

Or perhaps it is just a continuation of the tradition of the ‘energy agreements’ spree’ like the 1990s’ IPPs saga? Given the modus operandi of policy and decision-making circles and the track record of energy projects, however, transparency in these newly proposed projects is bound to become a burning issue and attract debate at the national level.

The real worth of the projects cannot be commented upon without details. Nevertheless, assuming, these projects are handled with utmost care and discipline, these would still be just a partial solution to the larger energy problems of Pakistan if they are limited to capacity addition only. Leaving the transparency issue aside, let’s reflect on some of the important features any solution to Pakistan’s energy problems should exhibit.

What is fundamental to finding a solution is a holistic approach rather than a segmented one as has traditionally been the case. A classic example of this is that of rental power plants — a number of rental power plants arranged by the previous regime failed to deliver because of the unavailability of fuel; yet they charged millions of dollars. The energy crisis is multifaceted in terms of dimensions and intensity and thus can only be remedied through value-engineered, vibrant and cohesive solutions.

We need a holistic approach to our power woes.

While capacity addition is not a complete solution to Pakistan’s energy crisis, whatever new energy projects come to Pakistan must deliver two important benefits — technology transfer and human resource development.

One of the most important shortcomings of Pakistan’s energy sector is the lack of a technological base. The Pakistani industry has hardly any expertise in the area of energy technologies. It has little idea of how to produce the energy system’s key components ie turbines, engines, generators and other electronic and control gadgets.

Even the situation where secondary components such as boilers, compressors and heat exchangers are concerned is not enviable. Through technology transfer, Pakistan can become self-sufficient in the production of power plants in future. Huge revenues in terms of importing expensive components for routine maintenance and emergency breakdowns can also be saved. It will also enhance the productivity of the energy sector at large.

Technology transfer will revitalise the Pakistani industry that has suffered so much at the hands of the energy crisis. It will help create thousands of new jobs and new business avenues. Also, amid the numerous emerging new technologies — such as renewable energy systems, fuel cells, etc in the medium to long term — industry in Pakistan will benefit from the fast-changing and expanding business environment.

Pakistan’s energy problems are also compounded by the lack of skilled human resource. This is an area that has always been ignored. Specialised expertise — that generally accounts for well over 10pc of the total project cost — has traditionally been outsourced. Consequently, the energy sector largely remains dependent on foreign expertise on all fronts including development of project proposals and feasibility studies, design and manufacturing of machinery, commissioning and major repairs.

This could be a good opportunity to objectively engage Pakistanis at various stages in these projects to develop a breed of capable professionals — including planners, engineers, technicians, and financial and marketing experts — that could make valuable services locally available and take the country forward.

Through this, the cost of proposed projects can be reduced, outflow of large revenues can be curbed, and overall productivity in the energy sector and national energy security can be enhanced.

The transmission and distribution infrastructure in Pakistan has almost collapsed. It is old, inefficient and full of leaks and is thus in dire need of an overhaul.

The local T&D infrastructure in many parts of the country is unable to cope with any additional power generation. The T&D system has been ignored for long and its substantial upgrading is key for generation capacity addition. It must be clear to the authorities that the proposed new power plants can’t deliver if the T&D system is not improved.

Lastly, agreements and MOUs are positive developments but one must not get carried away. These may or may not result in working projects. Owing to factors including political instability, lack of transparency and financial and administrative irregularities many such initiatives don’t go beyond flashy news stories and paperwork.

Yet again, these understandings and agreements are bound to fail or become counterproductive if not supported by vision, deliberation, commitment and competence.

The writer is the author of Energy Crisis in Pakistan: Origins, Challenges and Sustainable Solutions.

Published in Dawn December 18th , 2014



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