The Weekly Reader

Link: http://www.thenews.com.pk/print1.asp?id=39492

Power crisis remains a nightmare

KARACHI: When power crisis last summer subsided after hitting hard the common men, industry and trade alike for months, people had expected that enlightened and moderate government would take the issue of energy availability seriously.

ED NOTE: High energy costs and climate change are beginning to really be felt as we remain unaware here in the USA.

Follow up:

However, it is quite obvious now that people were wrong expecting good from the government, as the government failed at all fronts in trying to tackle the energy crisis. The industries located in the northern provinces of the country have been affected badly by the shortage of gas and resultant load shedding since the beginning of this winter season in early December.

In those parts of the country the situation is as bad for a large number of industrial consumers of gas as it was for everyone during the last summer when the country went through the worst power crisis of its history.

Those who are concerned about the situation are predicting that the coming months and years are going to be much more difficult for the industries because of the energy crisis that has gripped the country. Power shortage has always been there. Of late, we have started experiencing gas shortages despite being self-sufficient for decades in natural gas. Oil prices are still higher although they have fallen by around $29 per barrel in recent months. We have nowhere to go.

The Sui Northern Gas Pipeline Limited (SNGPL) has faced a shortfall of 700 million cubic feet per day (mmcfd), as temperature fell below zero Celsius, and has had to meet the shortfall by suspending supplies to some 300 industrial units in Punjab and NWFP.

The company saved around 450 mmcfd by suspending supplies to 11 cement units, two fertilizer factories and captive power producers, and diverted the same to domestic consumers.

While the cement units can bear this cut in supply of gas by cutting their production, as there has been a glut in the market following massive expansion in the sector, the suspension of supply to fertilizer industry at this moment will be bad enough for the country.

National Fertilizer Development Corporation has already predicted a shortfall for the Rabi crops and if the gas supply to fertilizer units continued to be suspended, there would be massive shortage in the market in the coming weeks when the demand is at its peak.

SNGPL also had to refuse to meet the demand for 300 mmcfd by Water and Power Development Authority (Wapda), which it usually obliges during summer when the company has sufficient supplies.

January has always been a difficult month for Wapda because of decrease in releases from major dams and cut in gas supply to power plants. Conversion of a large number of automobiles to CNG has further increased pressure on gas supply.

The relevant officials say the demand is rising continuously, an evidence of which is the fact that the SNGPL faced a shortfall of 400 mmcfd last year and it has gone up to 700 mmcfd this year. The situation seems to worsen next year when four more gas-driven power units - Safire, Saif, Orient and Savari - would start operating, requiring 220 mmcfd gas. This demand would on top of the usual 12 per cent load growth, which would add a load of another 200 mmcfd.

With a deal with Iran on gas supply far from the stage of finalisation and arrangements for liquefied natural gas at a great distance the future of our industries is quite uncertain. On the other hand it is very much certain that the government would have to allow import of fertilizer once again to meet the demand.

Already the Commerce Minister Humayun Akhtar Khan has said hopelessly that load shedding of power and gas would adversely affect the production of the manufacturing sector.

The helplessness of the government can be gauged from the fact that Wapda Chairman, Tariq Hamid has had to propose staggering of weekly holidays for industry to cope with power shortage.

He has said that 399 mega watt of power could be made available for trade and industry by staggering of weekly holidays.

In this era of stiff competition for export markets, no industry can survive if it is not assured of uninterrupted supply of gas throughout the year. All this is happening to our industries at a time when minnows like Cambodia and Bangladesh have started capturing our export market share.