Policy Paper Course: Water Policy and Governance. LKY School of Public Policy
Hydel Power Generation in Pakistan.
Policy and Climate Issues (With a Special Reference to Obstacles in Construction of Kalabagh Dam)
Muhammad Arshad Manzoor MPA: 2010-11 (Full Time) Email: exec4lov@yahoo.com, & m.arshad_manzoor@yaoo.com
National University of Singapore
1st December, 2010.
Table of Contents: Section-1. Outlines.
Page-3
1.1 Introduction 1.2 Aim 1.3 Methodology
Section-2. Hydel Power and Energy Portfolio.
page-4
2.1. Country Information. 2.2. History of Hydel Power Generation in Pakistan. 2.3. Energy profile of Pakistan 2.4. Present Energy Crisis. 2.5. Electricity Shortfall.
Section-3. Hydel Power and Policy Issues. 3.
Power Policy.
4.
Adverse Political Mandate.
5.
Inter-Provincial Didderences.
6.
Royalty Issues.
7.
Socio-Economic implications.
8.
International Dimensions.
9.
Displacement and Re-Settlement.
Page-7
10. Costs and Funding. 11. Environmental and Ecological issues. 12. Technological Resources.
Section-4. Kalabagh Dam Controversy.
Page-10
Section-5. Recommendations.
Page-12
Conclusion.
Page-14
References.
Page-15
Appendices.
Page-16
1. Power Policy 2002. 2. Pakistan economic Survey 2009-10 (Ch. 13) 3. List of WAPDA Hydel Power Stations. 2
Section-1. Outlines. 1.
This policy paper is a research paper required as part of the Course PP-5272,
Energy Systems and Climate Policy at Lee Kuan Yew School of Public Policy This course is offered as an elective course for various Graduate and Postgraduate programmes including Master of Public Administration (MPA) and Master of Public Policy (MPP). This policy paper is a study of Policy and Climate issues related to Hydel Power Generation in Pakistan. A special reference has been to the case of Kalabagh Dam proposed to be constructed in Punjab over the Indus River.
1.1.
Introduction: Pakistan if facing an acute energy shortage since the last 10
years. The country’s population and economy is expanding steadily, thereby requiring more energy resources to overcome the difficulties confronted by manufacturing and agricultural sectors. The shortage of electricity is the leading area of energy shortage. Pakistan has vast potential for generation of hydal power at low cost of production. Though, there are various hydal power projects working already but their capacity is far shorter than the requirement of the National Grid. Pakistan has the unique policy problems to exploit its potential for generation of Hydal power for its requirement of electricity. The issue of construction of Kala Bagh Dam in Punjab is an important example to study the issues relating to Energy and Climate policy. The recent heavy floods have highlighted the social, administrative and climate issues relating to construction of Hydal Power Dams in Pakistan.
1.2. Aim: The study of factors affecting the formulation and implementation of Energy and Climate policy as part of the Course of Energy Systems and Climate Policy for Master of Public Administration.
1.3. Methodology: The following methodology will be adopted to write this research paper: I.
Study of the genesis of Electricity Generation in Pakistan.
II. An insight into the present energy crisis through a difference in the Demand and Supply, of electric power in the country. III. Analysis of the Social and Political issues relating to construction of Hydel Power projects like Kalabagh Dam in Punjab. IV. Study of issues relating to climate and energy policies. V. Analysis of the issues relating to funding of Hydel Power Projects in Pakistan. 3
Section-2. Hydel Power and Energy Portfolio. 2.
Pakistan is located in Southeast Asia as part of the Sub-continent with India. It
shares long borders with India in the East and Afghanistan in the West. It also has common borders with China and Iran as well. High Himalayas stand in the North and in the South, Pakistan has large Coastal Areas off the Arabian Sea with Karachi, Gawader and Pasni as important sea-ports.
2.1. Country Information: Pakistan is a federation and a large country with four major federating provinces, Punjab, Sindh, Khyber Pukhtunkhwa and Sindh. Gilgit-Baltistan(FANA), Azad Jammu and Kashmir (AJK), and Federally Administered Tribal Areas (FATA) are also federating territories of Pakistan.
Pakistan has Total Area of 796096 Sq.Km with population of 132352279 persons having population density of 166 persns/sq.km.1 . Pakistan Federal Ministry for Population Welfare has projected the population of 242.123 Millions in 2030.2 Therefore Pakistan will need extensive energy sources to keep up the pace for sustainable development in future.
2.2. History of Hydel Power Generation:
At the time of independence in
1947, Pakistan has very few units of Hydel Power power Generation. Only 10.7 MW capacity of hydel power was available with 10.6 MW at Malkund Power Station
4
Source: Water and Power Development Authority (WAPDA).3 Jabban and 1.1 MW at Renala in Punjab. Pakistan established WAPDA(Water and Power Development Authority) in 1958 with its head office in Lahore.4 Since then Pakistan established hydel power projects rapidly. By 1993, Pakistan had hydel power stations at Dargai, Rasul, Chichoki Millian, Nandipur, Shadiwal, Warsak, Mangla and Tarbela constructed to tap hydel potential.5
2.3. Energy profile:
Pakistan has rapidly increased its energy resources to meet
the development needs. Pakistan has been facing accute power crises since the last decade. The agriculture and industrial sectors suffered and economic growth went down. The existing installed generation capacity of electricity from all EXISTING INSTALLED GENERATION CAPACITY Installed
Derated /
Capacity
Dependable Capacity
(MW)
(MW)
WAPDA Hydro
6444
GENCOs
Type of Generation
Availability (MW) Summer
Winter
6444
6250
2300
4829
3580
2780
3150
IPPs (incl Nuclear)
6609
6028
5122
5402
Rental
285
264
250
250
Total
18167
16316
14402
11102
Source: Water and Power Development Authority (WAPDA).6
5
2.4. Present Energy Crises:
Pakistan Economic Survey 2010 effectively
depicts the present Energy Crisis and its effects bon the countries Economy. “Energy sector issues and developments continued to severely constrain Pakistan’s economy in 2009‐10. The cumulative effect of the energy crisis on the economy is estimated at upward of 2 percent of GDP during 2009‐10 alone. The cumulative effect has been that the growth rate of Pakistan’s primary energy supply, which began decelerating in 2007‐08, has turned negative in 2008‐09 and 2009‐10 (July‐March). Final energy consumption is estimated to have declined by 5.3 percent during calendar 2009.”7 The forecast for 2030 shows that Pakistan will still have to face a difference between energy demand and supply. Demand will be more than the supply of energy in the future. Following “graph and table” shows the projections to the year 2030:8 PROJECTED ENERGY DEMAND VS CAPABILITY 2009-2030 120000
Demand
Supply
113695
100000 80566 90000
MW
80000
54359
60000
70000
36217
40000 18883
40000
24474
20000
27000 17008
19000
0 2009
2010
2015
2020
2025
2030
Years
DEMAND FORECAST (2009-2030) Fiscal years MW
Net Dependable Growth Capability Rate
Peak Demand
Surplus/ Deficits
2009
2010
2015
2020
2025
2030
17008 19477 27000 40000 70000
90000
9%
8%
15%
9%
10%
8%
MW
20594 22353 32704 48843 72169
101478
Growth Rate
7%
9%
-3586 -2876
8%
9%
8%
7%
324
4066
4031
5087
Source: Water and Power Development Authority.
6
2.5.
Electricity Shortfall:
As described earlier, Pakistan has been facing
electric power shortfall over the years. At the start of the month of October, 2010, Federal Minister for Water and Power told the media that Electricity shortfall has reached upto 5000 Megawatt in the country. He said that the production stood at 11,725MW as against the demand of 16,662 MW. The cities had been facing 8 to 10 hours outages and loadshedding while the duration extended from 14 to 16 hours in rural areas.9 In November, 2010, the shortfall in electric power has been report up to 3335 MW with 09 hours outages in cities and 14 hours loadshedding in villages.10
Section-3. Hydel Power Policy and Issues. 3. Power Policy:
There is no official public sector policy for power generation in
Pakistan. However, Government of Pakistan in 1994-95 and again in 2002 forwarded its Power Generation Policy for private power generation. Chapter 10 of the latest power policy 2002 gives the specific provisions for hydel power generation in private sector. It provides regulations for most economical dispatch criteria including the lowest energy cost component, transmission line losses, system stability and reliability, and other economic considerations. It also regulate the water use charge, feasibly report as international standards, creation of fund for feasibility studies and hydrological risks in case of scarcity or flooding seasons.11 The other policy issues regarding the hydel power generation in Pakistan are discussed in the preceding paragraphs.
4. Adverse Political Mandates:
The political Parties in Pakistan are not
unanimous in their opinion about the construction of reservoirs for bhydel power projects. There are two main political parties in Pakistan. Pakistan Muslim League and its various offshoots represent Punjab Province. And Pakistan Peoples Party, whose leadership is predominantly from the province of Sindh. Pakistan Muslim League leaders strongly advocates the construction of dams but the Peoples Party always looks after the interests of Sindh province which is against the construction of large dams on the Indus River. This stalemate has adversely affected the construction of large hydel power projects. “It is clear
that political discord and lack of clear vision among Pakistan’s ruling elite have prevented even a single dam from being constructed during the last three decades.”12
5. Inter-Provincial Differences:
The inter-provincial differences are severe
on the use of Indus river. The two large Hydel power projects needs the construction of big dams at Kalabagh in Punjab and Bhasha in Khyber Pukhtunkhwa. “Although Sindh is 7
opposed to any dam on Indus, NWFP(Khyber Pukhtunkhwa Province) feels that a dam at Kalabagh will inundate large agricultural tracts as well as the thriving city of Nowshera. Similarly in case of Diamer-Bhasha Dam, almost the entire inundation will take place in Gilgit-Baltistan, the power plant will be located in Bhasha in NWFP and hence it will receive the royalty from the power generation.Although the entire water in the reservoir will be available for irrigation down stream in Pakistan, not even an acre of land will be irrigated in so called ‘Northern Areas’ (Gilgit-Baltistan).”13
6.
Royalty Issues:
The constitutional provisions provide that the royalty for
hydel power project will be given to the province where the power house is built. There are differences over the distribution of royalty for hydel power projects in Pakistan. Federal Government has been trying to solve these issues. In case of Bhasha Dam, the power plant will be located in Bhasha in NWFP and hence it will receive the royalty from the power generation.Although the entire water in the reservoir will be available for irrigation down stream in Pakistan, not even an acre of land will be irrigated in so called ‘Northern Areas’ (Gilgit-Baltistan). As a sop to the local population the nameof the dam was changed from Bhasha to Diamer-Bhasha to give them a false sense of ownership and it was announced that the royalty will be shared with the ‘Northern Areas’. However, NWFP government has refused to share the royalty and Pakistani constitution supports their contention. The provision in the constitution states that the royalty would go to the state where the powerhouse for generating electricity is located. However, this is not a valid justification for the NWFP to reap the benefits of royalty from the dam, as the constitution of Pakistan does not apply to Gilgit-Baltistan, where the dam is actually located. it will inundate large tracts of land in Gilgit-Batistan.14
7. Socio-Economic Implications: The Hydel Power Projects has large socioeconomic issues due to construction of large water storage dams. For example, in case of Kalabagh Dam as eearlier stated will destroy a large area of fertile agriculture land alongwith big city of Noshehra in Khyber Pukhtunkhwa province. Similarly, the Bhasha Dam will submerge almost 120 Kilometre of famous Karakoram Highway, the only road link to China through Northern Areas of Pakistan. Bhasha Dam reservoir will also submerge a large number of villages and half of of the city of Chilas as well in Diamir District of Gilgit-Baltistan.
8. International Dimensions of Hydel Power Generation: There are two main rivers of Pakistan which create a large Hydel Power potential for Pakistan. These are the Jhelum River and Indus River. Jhelum runs through Jammu and Kashmir and Indus runs through Giligit-Baltistan. There is a long standing dispute between India and 8
Pakistan. Both these countries come up strongly against each other over the construction of any Hydel Power Project in these areas. Thus, giving these projects, an international dimensions.
9. Displacement and re-settlement of Population:
The water dams
for Hydel Power projects create the humanitarian issue of displacement and re-settlement of large population affected. Tarbela Project displaced 120,000 and Mangla Project displaced 110,000 people. Similarly, Bhasha Project is estimated to displace 44,000 people and Kalabagh Dam will displace 120 000 people to be evacuated, to which 78 000 in Punjab and 42 000 in the North-West Frontier Province (NWFP). The relocation would require the purchase of 300 square kilometers of irrigated land by the government. The town of Nowshera (200 000 inhabitants) is at risk.15 Therefore, the displacement and resettlement of affected population are two big questions of Public Policy associated with construction of Hydel Power projects in Pakistan.
10. Costs and Funding:
The construction of large hydel power projects, have
bigger costs in terms of money, technology, displacement and re-settlement of people. All the hydel power projects require foreign exchange and foreign loans for execution. At times due to Kashmir, dispute foreign donors are reluctant to invest for hydel power projects in Pakistan. Arrangement of funds is also a big policy question for Hydel Power projects.
11. Environmental and Ecological Issues:
The forests will be in danger
of extinction as the construction of dams in northern areas will submerge the pastures in the mountain velleys. The people goes up to mountains in summer and return down to velleys in winter. This cycles will discontinue and people will have to stay up on mountains and will cut forests for heating and fodder for live stock. The Kalabagh dam is believed to destroy the Mangroves forests near the coastal areas of Sindh due to less water entering the ocean from Indus River. There is a big ecological danger from Bhasha Dam as it is built on tectonic fault line. The recurrence of a massive earthquake like the one experienced in the Mirpur-Muzaffarabad region of POK in 2005, could lead to severe calamity as a breach in a huge reservoir like Bhasha Dam could inundate most of the cities located downstream on the banks of Indus.16
12. Technological Resources:
The policy Makers in Pakistan are always in
difficult situation on the question of technological resources. There is no technology available in the country for construction of Dams and Hydel Power Stations. All the
9
technology and technical human resource have to be imported. It increases the dependency and resultantly, the costs of projects go up manifold.
Section-4. Kalabagh Dam Controversy: 13.
The case of Kalabagh Dam is a comprehensive example of Policy catastrophes in
respect of water storage and Hydel power generation in Pakistan. in May 2008, present Government of Pakistan Peoples Party decided to shelf the Kalabagh Dam project once and for all. On 26th May, 2008,17 while addressing a press conference at the WAPDA House Lahore, Water and Power Minister Raja Pervez Ashraf said Sindh and NWFP had passed resolutions against the construction of the Kalabagh dam and, therefore, its construction could endanger the federation. The minister said funds allocated for its construction would not lapse, but would be spent on other water and power projects. The minister said the nation had wasted a lot of time debating construction of the Kalabagh dam. For a strong and united federation, it is better to abandon the project, he added.18
14. Kalabagh Dam:
Kalabagh is a town in Mianwali District of Punjab province.
A large power project has been planned at this site on River Indus by costruction of a large water storage dam named as Kalabagh Dam. The initial study for the construction of Dam was done in 1953. The proposal of Kalabagh dam officially surfaced in 1984, in July 1985 the federal Minister of Water & Power formally announced that the project work had been started and the dam would be completed in 1994. Since then at least Rs 1.3 billion (US$ 28 million) have already been spent on the various phases of this most controversial project in the country's 50 year history. The storage capacity of this dam has been estimated at 6.7 MAF of Water alongwith hydel power generation of 3600 MW. Total estimated project cost in 1987 & 1992 was about US$ 4.9 billion. Expected donors are World Bank, Asian Development Bank, Canadian International Development Agency (CIDA), Governments of China, Saudi Arabia, Italy and Japan.19
15. Controversy and Objections:
The Objections and controversies include all
the above stated issues in relation to Hydel Power Generation. It is therefore appropriate to highlight those issues which are specific to the construction of Kalabagh Dam. These objections are actually related to the water storage and use by Punjab Province. But it also expresses the dismal future of large hydel power projects in Pakistan. These issues are stated in the incoming discussion.
10
16. Un-realistic Estimates of Water Usage:
It is estimated that the
storage capacity of dam reservoir shall be 6.7 MAF. As a matter of fact, the water flow in proposed irrigation for Punjab province will make the water usage upto 19.5 MAF.20
17. Water Accord 1991. In 1991, under thhe auspices of federal government the four provinces agreed to an accord for distribution of Indus water. According to this agreement a quantity of 10 MAF has been provisionally earmarked for out flow to sea. But after construction of Kalabagh Dam, it will not be possible.21
18. Inter-Provincial Dispute:
People in Sindh Province believe that the aim of
Punjab regarding building a dam at Kalabagh is to keep a life and death grip on the life line of Sindh, in this way the ruthless and unscrupulous ruling coteries would be able to control the very existence of four crore (40 million) Sindhis.22 The Khyber Pukhtunkhwa province also has serious reservations on Kalabagh Dam. Kalabagh Dam will be a grave threat to the fertile Peshawar valley and thousands of acres of NWFP=92s most fertile agricultural land will be destroyed. According to !992 official figures, a total of 35,000 acres of land will be inundated/ submerged by the Dam, out of which 3,000 acres are irrigated while 27,000 acres are barani. As a result of rise of water level due to pounding up at Kalabagh, the water level in Kabul river will rise due to back water effect, thus posing serious threat to the Nowshera (a city of about 200000 people) which will be fully waterlogged within few years. Water quality will be polluted by salinity due to nearness of Khewra and Kohat salt formations. The province of Baluchitan also againt the construction of Kalabagh Dam. The province of Balochistan has been irrigating about 300000 acres with the supply from Pat feeder of Guddu (a barrage of Indus) which will be affected by the shortage of water.23
19. Environmental and Ecological Issues: “As far as the environmental and ecological aspects and threats are concerned the shortage of water for out flow to sea has already caused reduction in the volume of silt. Indus river once brought down 600 million tones of silt out of which half reached the sea and half fertilized the alluvial plain. Today, just 36 million tones passes the upstream barrages and dams. The Indus delta was spread over in 350 sq. km before the partition, it also had more than nine perennial streams, now it has only two perennial streams and covers just about 25 sq. km. This reduction has resulted in the erosion and degradation of the delta, elimination of 0.6 million acres of riverine forests and destruction of mangrove forest area, which has reduced from 263,000 hectares in 1977 to 158,500 hectares in 1990. From aquatic
11
conservation point of view the famous Palla fish, Bulahan(Indus dolphin), Khagga(Sea cat) and other aquatic species have become nearly extinct due to water shortage.The annual production of Palla has been reduced from 5000 tons to just 500 tons. Further reduction of fresh
Indus Dolphin water flows below Kotri will be a disaster for the common people & fishermen (Munhanas) who depend upon agriculture and fisheries in coastal Sindh. The destruction of wildlife/bird Sanctuaries, riverine forests and natural lakes like Manchar, Kinjhar, Hadero, Haleji and Chotiari will affect biodiversity, specially the migratory birds of Siberia and Kazekustan and endangered aquatic as well as terrestrial species�.24
20. Riverian Culture and Civilisation:
The flow of waters in the Indus
River plays a vital role in the formation of psyche, society and culture of the Sindhi people. The construction of the dam is likely to keep Indus below Sukkur dry most of the year. Many fishermen living on the Indus will become homeless and the Indus that is the Darya Shah (living legend) for Sindhis will be polluted and reduced from once mighty river to mere expanse of shallow water. This is equal to the cultural invasion and devastation of the thousands year old cultural heritage of Sindhi people.25
Section-5. Recommendations. 21.
Pakistan is a country which has a lot of potential for hydel power generation. With
this large potential, it is ironical that the country has been facing power shortages over the decades. A concerted effort is needed to rapidly build the hydel power projects for production of cheap electricity to meet the growing needs in the country. Several recommendation are made here for increase in Hydro-power generation.
22. Establishment of National Commission:
It is the need of the hour
to establish a National Commission for Hydro-Power to ensure speedy set up of Hydel 12
Power stations. The composition of the high power independent commission shall comprise political, technical and industrial representatives from federal government as well as from all four provinces.
24. Change in Design of Controversial Dams:
To remove the
controversies and objections, necessary changes to the design of proposed dams can be made to achieve the consensus of all stakeholders.
25. Public Participation: It has been a policy fault on the policy makers in the past that the hydel power projects were planned without ensuring the public participation especially in the planning and design processes. The participation of general public, civil society and NGOs will give the general acceptance to the projects.
26. Power houses without large storage dams:
It is possible to built a
hydel power station on the flow of river with out any storage dam. These power stations do not affect the run of river. There are a lot many sites in the mountains where the hydel power houses can be constructed on the run of the two main rivers i.e. Indus and Jhelum. Power turbines can also be operated at bigger barrages. It can be the easier way to increase the hydel power capacity without getting involved into inter-provincial disputes over water distribution.
27. Development of technology:
Pakistan has the capability to develop its
own Dam and Hydel Power Technology in a short span of time. In the presence of Pakistan Steel Mills Karachi and Heavy Mechanical Complex Texla, the development of this technology is not difficult.
28. Change of Policy Preferences:
The policy for power generation in
Pakistan has been revolving round the short term solutions to power crises. Therefore, a lot of resources have been diverted towards thermal power stations in the public and private sectors. It is recommended that priority should be given to the development of hydel power generation.
29. Public Private Partnerships:
In Pakistan the hydel power generation
has been exclusively the public domain. The incentives for private investors can bring a positive impetus in development and establishment of hydel power generation in Pakistan. 13
30. Shift from Federal to Provincial Governments:
The generation
and distribution of electricity has been the federal subject of governance. There are a lot of opportunities in the provinces which can be explored by provinces for power generation. Provinces should be allowed to develop their own hydel power stations where it is feasible. In all parts of country the small hydel power stations can be established easily.
31. Separate Hydel Power Policy:
The potential of hydel power generation
is very large in Pakistan. To exploit this potential effectively, federal government should devise a separate policy for hydel power generation. Such a policy shall set priorities and modalities for hydel power generation..
Conclusion: 32.
Pakistan has large potential of Hydel power generation. Pakistan is endowed with a
hydel potential of approximately 59773 MW, most of which lies in the North West Frontier Province, Gilgit Baltistan, Azad Jammu and Kashmir and Punjab. However, an abundant hydel potential is still untapped which needs to be harnessed.26 If the policy preferences are shifted towards Hydel Power generation, Pakistan can produce surplus electricity. The hydropower stations are efficient aswell as environment friendly. A lot of sites have already been identified for hydel power houses in Gilgit-Baltistan, Kashmir, Khyber Pukhtunkhwa, Punjab and Sindh. The development of hydel power projects is the easy, viable and long term solution for recurring energy crises in Pakistan. Pakistan is a heavily debt ridden and languishing from being the victim of international terrorism. There is always a question mark whether a country like Pakistan can have a strong leadership and political will to make hard and right decisions or not. The future of much needed Hydel Power Generation in Pakistan still hangs in the balance.
14
References: 1
http://www.moe.gov.pk/Facts%20&%20Figures/chap%201.pdf
2
. Idid
3
. http://www.wapda.gov.pk/htmls/pgeneration-hydelpower.asp . http://www.wapda.gov.pk/htmls/pgeneration-hydelpower.asp
4 5
. http://findarticles.com/p/articles/mi_hb092/is_n7_v25/ai_n28646105/
6
. http://www.wapda.gov.pk/htmls/power-index.html
7
. Pakistan Economic Survey 2009-10.(Ch-13)
8
. http://www.wapda.gov.pk/htmls/power-index.html
9
. http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/pakistan/03-electricity-shortfallreaches-up-to-5000-megawatts-ss-08 10
. http://www.pakistantimes.net/pt/detail.php?newsId=10812
11
. Power Policy 2002. http://www.ppib.gov.pk/policy_page20.htm
12
. http://www.idsa.in/system/files/POKNewsDigest2(1)2008.pdf
13
. Ibid
14
. http://www.idsa.in/system/files/POKNewsDigest2(1)2008.pdf
15
.
16
. http://www.idsa.in/system/files/POKNewsDigest2(1)2008.pdf
17
.http://wn.com/Kalabagh_Dam's_importance_For_Pakistan_wwwFantasticSolcommp4
18
. http://www.paktribune.com/news/print.php?id=200959
http://rupeenews.com/2008/05/27/kalabagh-dam-dropped-without-discussion-in- parliament/kbd7/
19
. “Kalabagh Dam Political, Environmental & Humanitarian Disaster in Pakistan” by Ayaz Latif Palijo
http://www.sanalist.org/kalabagh/a-8.htm 20
. . 22 . 23 . 24 . 25 . 21
26
Ibid. Ibid Ibid. Ibid. Ibid. Ibid.
. http://www.ppib.gov.pk/investment_opportunities_hydel.htm
15
Appendices. Appendix-1.
Policy For Power Generation Projects Year 2002
10 SPECIFIC PROVISIONS FOR HYDEL PROJECTS 10.1 Despatch 75. The load despatch center shall despatch plants in accordance with the most economical despatch criteria (without any bias), which will be on the basis of the lowest energy cost component, transmission line losses, system stability and reliability, and other economic considerations. Because of their very low variable cost, hydel plants are likely to be dispatched with the highest priority. 10.2 Water Use Charge 76. The Water Use Charge will be paid by the Generation Company to the Provincial /AJK Government for use of water by the power project to generate electricity. The Water Use Charge per kWh will be fixed at the rate of Rs.0.15/kWh. The water use charge shall be adjustable annually for inflation as per para 66. 10.3 Feasibility Studies 77. The feasibility studies will identify basic parameters of the project, such as, for hydel projects, the hydrological characteristics of the site, geological conditions, optimum net capacity, estimated annual plant factor, monthly profile of energy potential, transmission line requirements, identification of power delivery point, interconnection voltage, etc. 78. While feasibility studies will be carried out in accordance with internationally acceptable standards, the GOP will not guarantee their content or conclusions. The bidder will have the right, at its own cost, to examine, evaluate and form its own conclusions on any or all aspects of the feasibility study, and to carry out any additional studies and investigations to make its own assessment about the feasibility and viability of the project, as part of its due diligence. 79. A fund will be created to carry out internationally fundable feasibility studies, so as to invite competitive bids on solicited proposals. The fund will be administered by PPIB. 10.4 Hydrological Risk 80. The power purchaser will bear the risk of availability of water for hydel projects with capacity above 50 MW, by making fixed monthly CPPs between 60% and 66% of the total levelized tariff to the project company in accordance with the monthly average hydrology. The RFP will specify arrangements required to monitor and record water flows. 81. Sponsors will be asked to quote their plant's generation efficiency curve. If the efficiency of the power plant goes down, or the generation of electricity is reduced for any reason other than a reduction in water flows, the project company will be liable for the value of the electricity lost due to a fall in efficiency or reduced availability of the power complex. For run of the river projects with storage for daily peaking, specific measures will be specified in the RFP for monitoring plant performance. For seasonal storage projects, a reservoir will be operated as per the directives of Indus River System Authority (IRSA), specific details whereof will be provided in the RFP.
16
Appendix-2 Economic Survey 2009-10.
Energy
13
Energy sector issues and developments continued to severely constrain Pakistan’s economy in 2009‐10. Against a backdrop of a sharp increase in the international price of oil through calendar 2009, which put enormous upward pressure on the cost structure in the power generation (and transport) sector, in particular, large domestic supply shortages of electricity and gas occurred. Lower accumulation of water reserves in dams compounded the severity. The cumulative effect of the energy crisis on the economy is estimated at upward of 2 percent of GDP during 2009‐10 alone. Developments outlined above engendered a negative feedback loop in the electricity sector, giving rise to the inter‐corporate “circular” debt issue in the entire energy supply chain. The lower availability of hydel resources for generation, and a higher than normal shortage of gas, skewed the “fuel mix” of the electricity generation sector towards fuel oil. Since this occurred at a time of a doubling of the international oil price, the effect on the cost structure of the utilities was amplified greatly. With no change allowed in the electricity tariff between 2003 and 2007, the compounded effect on the viability of the energy sector has been devastating. Some idea of the “viability gap” that had built up in the electricity generation sector can be had from the fact that, prior to the most recent tariff increase, the gap between average generation cost and recovery was close to 30 percent. Despite hefty increases in end‐user electricity tariffs over the past two years, a significant gap still exists between generation cost and recovery, due in large part to the adverse developments outlined above. This “imbalance” between cost of generation and distribution, and the final tariff, is the root cause of the circular debt issue, with each downstream player in the energy chain being forced to delay payments to upstream entities (for fuel supplies). The net effect is a declining effective utilization of available generation capacity in the system. The cumulative effect has been that the growth rate of Pakistan’s primary energy supply, which began decelerating in 2007‐08, has turned negative in 2008‐09 and 2009‐10 (July‐March). Final energy consumption is estimated to have declined by 5.3 percent during calendar 2009. Pakistan’s Energy Sector 13.1 Supply of Energy
Primary energy supply and per capita availability of energy witnessed a decline of 0.64 percent and 3.09 percent respectively during July‐March 2009‐10 over the same period last year (see Table 13.1). This decrease in the primary energy supply and per capita availability during the first nine months of the current fiscal year is higher than its fall in the full year of 2008‐09 when primary energy supply and per capita availability narrowed down by 0.58 percent and 2.27 percent respectively. The fall in energy supply during current period can be attributed to inter corporate circular debt problem.
17
Appendex-3. List of WAPDA Hydel Power Stations. Station
Water Way (River/Canal)
Units No.
Capacity of Each Unit (MW)
Installed Capacity (MW)
Date of Commissioning
Tarbela
Indus (Reservoir)
1~4 5~8 9~10 11 12~14
175 175 175 432 432 Total
700 700 350 432 1296 3478
Jul. 1977 Dec. 1982 Apr. 1985 Feb. 1993 Nov.1992
Barotha
Indus (D/S Tarbela)
1 2 3 4 5
290 290 290 290 290 Total
290 290 290 290 290 1450
July. 2003 Aug. 2003 Oct. 2003 Dec. 2003 April. 2004
Mangla
Jhelum (Reservoir)
1~4 5~6 7~8 9 10
100 100 100 100 100 Total
400 200 200 100 100 1000
1967 - 1969 Mar. 1974 Apr. 1981 Sep. 1993 Jul. 1994
Warsak
Kabul (Reservoir)
1~4 5~6
40.0 41.48 Total
160 83 243
Jul. 1960 Mar. 1981
Chashma (Barrage)
1 2~3 4~5 6 7~8
23 23 23 23 23 Total
23 46 46 23 46 184
Jun. 2001 Apr. 2001 Mar. 2001 Feb. 2001 Dec. 2000
Rasul
UJC*
1~2
11.0
22.0
Jul. 1952
Dargai
Swat**
1~4
5.0
20.0
Dec.1952
Nandipur
UCC***
1~3
4.6
13.8
Mar. 1963
Shadiwal
UJC*
1~2
6.75
13.5
Jan. 1961
Chichoki
UCC***
1~3
4.4
13.2
Aug. 1959
LBDC****
1~5
0.22
1.1
Mar. 1925
K/Garhi
Kachkot*****
1~4
1.0
4.0
Feb. 1958
Chitral
Ludko
1~2 3~4
0.3 0.2 Total
0.6 0.4 1.0
1975 1982
Chashma
Renala
: Run-of-River (Canal) Projects *
UJC
: Upper Jhelum Canal from River Jhelum
**
Swat
: Swat canal from River Swat
***
UCC
: Upper Chenab Canal from River Chenab
****
LBDC
: Lower Bari Doab Canal from Balloki Headworks on River Ravi
***** Kachkot : Kachkot Canal from River Kurram
Updated as on 30.09.2010. Source: Water and Power Development Authority. http://www.wapda.gov.pk/htmls/pgeneration-hydelpower.asp
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