Unformatted text preview: ut fuel, and hence their ever
rising costs. They also incur much less operation and maintenance costs and are supposed
to have a longer lifetime. Thus, using renewable power looks uneconomical in the short
term, but may turn out profitable in the long term. Therefore, the key question is what can
make investment in renewable power generation acceptable? The creation of Pakistan
Council of Renewable Energy Technology (PCERT) in 1990, and later the creation of
Alternate Energy Development Board (AEDB) in 2003 have kept the potential and hopes of
developing renewable energy alive. 128 In addition, the Energy Group at SDPI is conducting research to find answers to this
question through a financial analysis, which looks at the costs involved in setting up
renewable power businesses in Pakistan and in identifying factors that can help attract
investment in the renewable technologies. The research especially focuses on finding out
the cost of renewable power generation and then on determining a suitable tariff that is
acceptable both to the prospective investor and electricity purchasers in the country.
The Government of Pakistan is strongly emphasizing a wide use of the vast deposits of coal
found in the desert of Thar. It is planning to provide incentives to independent power
producers to set up production plants at the mine sites and to sell electricity to the national
grid. It is also urging cement industries all over the country to use this coal. However, the
coal, low quality lignite, is known to contain significant sulfur concentrations. Extensive use
of this coal is, therefore, likely to substantially increase environmental degradation,
particularly when used in cement plants situated near cities and towns. Any future use of the
Thar coal demands schemes for removing pollutants, particularly sulfur, and reducing ash
contents. There are several ways of doing this, one among them being the conversion of
coal to Di-methyl ether (DME) or any other compound of higher energy content. The project
will investigate the technology and economics of pre-combustion conversion of the Thar coal
and will advise the government on the best use of it.
Liberalization and De/regulation of Power sector in Pakistan
Pakistan's power sector was liberalized in mid 1990s. Since then WAPDA, the state utility
has seen an increase in its losses and has gone bankrupt. The nature of agreements inked
with Independent Power Producers (or IPPs), drained out WAPDA. Consumers, on the other
hand, have constantly suffered rising tariffs since the inception of private power in Pakistan.
WAPDA's own conditions have deteriorated to an extent that the utility's annual losses hover
around Rs.40 billion. Its old and outdated infrastructure only adds to its woes. The utility's
line losses lie between 27-30 percent. The Government of Pakistan has taken steps to
revamp WAPDA, foremost of which is the unbundling of the utility into distribution and
generation companies. The Energy Group of SDPI is preparing a report, which tries to
address the problems/controversies generated by liberalization and...
View Full Document
This note was uploaded on 10/02/2010 for the course MBA 32343 taught by Professor Samghouri during the Spring '10 term at Karachi Institute of Economics & Technology.
- Spring '10