A recurring winter’s tale

Electricity supply issues among rising local energy costs – both at producers and consumers’ ends – combined with power plant defects, high fuel cost, supply issues, and low water-reducing hydro have wreaked havoc across the country.

The challenges are not over almost all over the world. For poor governments and their people, the suffering has been much more. For Pakistan, the currency exchange issues and the ballooning current account deficit have created special problems.

There may be a few months of partial respite when the summer’s intensity goes down and morphs into a cold winter. Rich and other high-income groups may suffer more than the poor who usually do not get hot water and heating or get quite little. The poor are used to suffering. The rich are not and may not be able to buy energy even when there is no dearth of money for them.

Pakistan’s energy crisis does not seem to be ending anytime soon. The country has not received a single offer against its LNG purchase tender. This has happened in the summer when LNG demand is usually less. In the winter, the demand and prices are high. Those that have a larger share of long-term contracts are somewhat saved, while those that depend on spot supplies will suffer more. In the coming winter, due to lower supply and higher gas prices, there may be more load on electricity heaters and more gas demand.

A new gas tariff has been announced, and gas prices have increased – there is a circular debt of Rs1.5 trillion in the gas sector in addition to the circular debt of Rs2.5 trillion for the power sector. Reportedly, the recent gas price increase is more likely to prevent further build-up of circular debt in the gas sector. The higher income group will have to pay more as its consumes more. For some, however, no high price is high enough. The government may have to take some administrative measures to induce this class of consumers to consume less gas. This article is for those who may feel the pinch and may be on the lookout of some alternatives.

As per the new tariff, those previously paying Rs738 per MMBtu will now pay Rs1,856 – a 151 per cent increase. And those paying Rs1,107 per MMBtu will pay Rs3,712 – a 235 per cent increase. For small consumers, the increase has not been as high as compared to others and the cost of gas. This class may be better off with LPG, which has a price of around Rs4,000 per unit. But LPG may also be in short supply, and one may have to have a mix of various resources including renewable energy like solar and biomass.

Fortunately, the government has announced its intention for a fast-track solar programme, and its policy is expected by August 1. It is hoped that both consumer-level and producer/supplier-level solar infrastructure will be encouraged in the policy. There is already a provision of 6000MW in the IGCEP power plan, which may be expanded. However, fast-tracking is needed. It can take less than a year to implement a large-scale solar PV project.

With special attention, 1000MW can be added in the next 12 months; some capacity may come even earlier. Solar costs less than Rs8-10 per kWh. The average cost of supply will go down and the marginal cost will be further reduced.

The biggest alternative is conservation, but that may not take us very far. Conservation practices may have an immediate effect, but technical measures will cost time and money. Renewable energy is getting cheaper, and it requires initial capital investment but has no fuel cost. It is environmentally clean and can play a pivotal role in saving the planet.

Heat can also be produced by electricity. But it will be expensive and create electricity supply issues. Gas heaters and geysers are commonly used in our country. This practice was right when gas was cheaper and abundant. But the situation is not ideal any more. Fortunately, there is a solution in the form of solar geysers – although its use is much less here. It should be noted that even in the winter, there is sunshine in most parts of Pakistan.

On average, there are only 15 days when the sky remains mostly cloudy without sunshine. Thus solar PV or geyser is likely to be available without interruptions. Solar geysers have electrical heaters built in as well, and solar PV and geyser may work in tandem as well. China and Turkey are big users of solar geysers. In Pakistan, solar geysers are imported from China.

Biomass and coal supplies can also play a role in resolving the energy crisis. The rich living in one-kanal (600 sq yard) houses and above may use biomass. Last winter, DHA residents had reportedly burnt their old furniture. Biomass is better in such cases. The urban middle class and poor may not be able to use biomass, although they may buy efficient gasifier stoves.

Special heaters are required for this, which are already being made by small industries. Instead of raw biomass and coal, billets can be used as it is a cleaner and convenient alternative. The government will have to come up with ways and means to expand supplies in this respect. I am based in rural-urban Islamabad and have successfully implemented these technologies, and am not speaking out of theory only.

While there is considerable installation know-how in solar PV, there are inadequacies among local traders and installers, especially in providing insulation in piping, corrosion protection, water filters, etc. It is hoped that with an increase in market size, these inadequacies would be removed.

Solar geysers, except for glass tubes, are an elementary steel fabrication technology although even glass and insulation foam manufacture is also widely spread. If there is encouragement, these large companies may meet the challenge. Unfortunately, we are always in a hurry and in crisis and the causes of local manufacturing have to be compromised to face the challenge and crisis.

There is no denying that these solutions will not be sufficient, but they can provide some respite, helping both consumers and suppliers. Scepticism and hesitation on the part of consumers and policymakers has prevented induction of these technologies. Fortunately, solar PV enjoys consumer confidence. The same can happen in other areas as well.

The government is heavily involved in the gas sector. Its public-sector companies have a large footprint and organizational structure. These companies should play an active role in mitigating the gas crisis. Cheap credit can be passed on through these companies as well. Earlier, some initiatives were taken by these companies, but the subsequent managements have not continued with the initial spirit. There are still some months left for planning, preparation and launching the initiative to meet the winter challenge. It is hoped that the government will include this aspect in its plans and actions.

The writer is a former member of the Energy Planning Commission. He can be reached at: akhtarali1949@gmail.com