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Electricity Shortage in Pakistan becomes more severe during the year 2005-2006
due to extensive use luxurious appliances of electricity by domestic users.According
to the report, in the fiscal year 2005-06, some 2,250MW power was required to
operate some 7.7 million electric home appliances i.e. number of refrigerators in the
country were 1,100,000 and power required for them was estimated at 110MW, the
number of deep freezers were estimated at 200,000 and required power for them
stood at 60MW, some 1,000MW power was required to run 2 million air
conditioners. These figures are so alarming for Pakistan because in the decade
starting from 1991 these appliances are less than a half million. the study was made
on the topic shortage of electricity in Pakistan in comparison with air conditioners
imported and produced during 2005-2006.in this study the hypothesis were set as, is
Electricity shortage in Pakistan is caused by Industrial growth or massive use of Air
conditioners by domestic users. However after finding out and analyzing the data
that the increased domestic use of air conditioners is the cause of electricity
shortage in Pakistan.
This study was made to demonstrate the effects of massive installation and usage of air
conditioners in Pakistan during 2005-2006.Before going to details here is the some text
which gives you the overview of the Pakistan’s economy, and Pakistan’s over all energy
usage.
In recent years, the combination of rising oil consumption and flat oil production in
Pakistan has led to rising oil imports from Middle East exporters. In addition, the lack of
refining capacity leaves Pakistan heavily dependent on petroleum product imports.
Natural gas accounts for the largest share of Pakistan’s energy use, amounting to about
50 percent of total energy consumption. Pakistan currently consumes all of its domestic
natural gas production, but without higher production Pakistan will need to become a
natural gas importer. As a result, Pakistan is exploring several pipeline and LNG import
options to meet the expected growth in natural gas demand. Pakistan’s electricity demand
is rising rapidly. According to Pakistani government estimates, generating capacity needs
to grow by 50 percent by 2010 in order to meet expected demand.
Natural Gas,
50.30%
Pakistan is facing a huge electric power crisis today. This crisis appears insurmountable
in the near or even long-term future, unless proper understanding and correct
implementation is undertaken on priority basis. At present total power production
capacity in the country is about 19,500 MW, out of which Hydel Power is only 6,500
MW, balance of 13,000 MW is thermal either using Natural Gas or Furnace Oil. Small
capacity of 450 MW is Nuclear and only 150 MW is through coal.
The problem of massive load shedding in Pakistan was properly introduced in 2004-
2005.Because in these days the overall GDP growth was very high near about 9% per
year. In these years the business progress was very well and banks industry grows at a
vigorous speed. Banks introduces new schemes in which peoples were provided home
appliances on lease. Thus resulting an increase in production and exports of home
appliances. These home appliances not only include the necessity objects like refrigerator
but also the Luxury objects like Air conditioners. Although most of the air conditioners
were made in Pakistan but 60% of the raw material used in air conditioners was imported
from different countries of the world.
Due to these reasons Pakistan was hit badly by two basic problems such as budget deficit
and shortage of electricity.
1 . 3. Objectives of my research:
The main objective of my research is to find out either the consumption of air
conditioners in Pakistan is responsible for Load shedding or the growth in industrial
sector in Pakistan is responsible for load shedding, or no installation of new power plants
is responsible for the problem.
From different resources it is also confirmed that during 2002-2006 Pakistan’s industry
sector was also at boom so without testing the hypothesis we cannot say that the Load
shedding problem is due to usage of Air conditioners. Here we also have to note down
that the ratio of growth in consumption of electriicty to production of electriicty.
To find out the past trends of electriicty consumption and present and future situations is
also an objective of my research.
Almost two years ago the then WAPDA chairman who happens to be a caretaker minister
admitted that WAPDA cannot meet the current demand for electricity. It’s surprising that
such a senior and experienced person took so long to find this out. On top of that the
government which talked about Pakistan’s supposedly booming economy failed to
understand the gravity of the situation. General Musharraf (R) after becoming Chief
Executive used to talk about building dams especially Kalabagh Dam. This was one of
the many promises he failed to keep. Even after that very few power plants have been set
up to meet the demand for electricity. During the second government of Benazir some
independent power plants were set up. Had they not been setup then we would have had a
much bigger crisis with life almost coming to a standstill. I come from the software
industry which has been badly hit by the present power crisis. On an average the
generator at my office is on for three hours. Our work is not much affected but overall the
company’s operating expenses have increased. The policy makers of Pakistan have so far
failed to understand one thing. They do talk about making dams and setting up nuclear
power plants but why do they not understand the importance and benefits of alternate
energy sources such as solar, windmill energy etc. They are cheap and quick methods for
producing electricity. Pakistan is a very blessed country because solar energy is available
in most cities all year round similarly wind energy is readily available in the coastal
areas. These energy sources if tapped can be of great help in reducing the current demand
supply gap. After the founding of Pakistani State in 1947, the Government’s economic
policy concentrated attention on developing an economic infrastructure, achieving self-
sufficiency in food, and developing export industries. However, an intrusive and over
sized public sector, an over regulated economy, excessive discretionary powers often
incompatible with the level of the official, and an absolute lack of transparency, provide
the optimal environment for opportunities of corruption restricting the economic
development in the country. Combination of these factors with weak accountability
ensures that economic backwardness get entrenched into the entire fabric of society.
Despite the pervasive pessimism that is undoubtedly felt, we have come across many who
would willingly embrace new practices if only the scourge of corruption could be lifted
from their lives. The countries that have surged ahead, on the other hand, are
characterized by high level of human capital accumulation where the educated labor force
has raised the level of output and the rate of growth over a sustained period of time.
Inefficient public expenditure process, higher cost of basic input, lack of skilled human
resources, corruption and nepotism restrict Pakistan far behind in development according
to recently announced World Bank report. Pakistan is suffering from shortage of
infrastructure in the water, irrigation, power, and transport sectors. Infrastructure is
essential for sustained growth and competitiveness both in the local and international
markets. The gaps between demand and supply in these sectors are alarming. The plans
needs to put in place urgently, these critical shortages would continue to undermine the
efforts to improve socio-economic indicators and to reduce poverty. Without adequate
After analyzing the Pakistan’s energy shortages and their different reasons for these
shortages the following variables were identified.
Electricity
Independent variables
Air conditioners
New electricity capacities installed
Industrial growth
Air
Conditioner
Electricity NEC
Shortage Installed
Industrial
Growth
Massive domestic usage of air conditioners due to high income level negatively
affects electriicty supply.
No installation of new electriicty capacities negatively influences the electriicty
supply.
The industrial growth during 2005-2006 positively influences the electriicty
supply.
1. Null Hypothesis:
H0: Massive usage of air conditioners in the country is responsible for the electriicty
shortage in the country.
1. Alternative Hypothesis:
H1: Massive usage of air conditioners in the country is not responsible for electriicty
shortage in the country.
2. Null Hypothesis:
H0: Growth in industrial sector is responsible for shortage of electriicty in Pakistan.
2. Alternative Hypothesis:
H1: Growth in industrial sector is not responsible for the shortage of electriicty in
Pakistan.
3. Null Hypothesis:
H0: No installation of new electricity capacities is responsible for electriicty shortage
in Pakistan.
3. Alternative Hypothesis:
H1: No installation of new electricity capacities is not responsible for electricity
shortage in Pakistan.
To collect data these companies are contacted through PEPCO for better
cooperation.Thus the data collected from these sources is divded into two froms one is
domestic consumption of electricity and the other one is commercial consumption of
electriicty during 2005-2006. The staff of PEPCO also forwards me a report made by
Engineer Tahir basharat cheema the chairman of PEPCO. which was presented to the
Prime minister.
The Primary and secondary data collected from different sources thus managed. Primary
data was collected in the form of filled questionnaire and the secondary data was
collected in the form of reports of different journalists and other government officials.
The data collected in the form of filled questionnaire is of primary nature thus it is
directly analyzed by using different statistical tools such as coefficient of variation and
other measures of location and measures of dispersion. Then the data was arranged and
presented in a graphical form so that any one can analyze the situation of electriicty
shortage in Pakistan.
As it is clearly evident from the figure that consumption of electricity was increasing day
by day.
Now looking at the data which was collected from different electriicty supply companies
of Pakistan.
WATT: Watt is a unit of power. A watt is defined as the rate of doing one joule (J)
of work in one second. Common units of power are multiple of the watt.
These are as under:
KILOWATT HOUR: Kilowatt hour is a precise measure of energy and work. It is the work
equivalent to 1000 watts (Joules per second) over one hour time.
Domestic Supply
Commercial Supply
Industrial Supply
Agricultural Supply
“Agricultural Supply” means a supply for lift Irrigation Pumps and/or Tube wells
intended solely for irrigation or reclamation of agricultural land or forests, and includes
supply for lighting of tube well chamber.
Maximum Demand
“Maximum Demand” means the highest demand obtained in any month measured over
successive periods each of 30 minutes duration.
Public Lighting
Bulk Supply
“Bulk Supply” for the purpose of this tariff means a supply given in a bulk at one
point to consumers having their own distribution facilities, i.e. own grid station etc.
Beside that Electricity consumed in auxiliaries and system losses are referred as other
Consumption.
Domestic 10,005 81.7 10,783 81.7 13,086 82.6 13,888 83.1 14,838 83.4
Commercial 1,840 15.0 2,001 15.2 2,313 14.6 2,379 14.2 2,476 13.9
Industrial 220 1.8 224 1.7 230 1.5 234 1.4 245 1.4
Agriculture 174 1.4 175 1.3 201 1.3 204 1.2 223 1.2
Industrial
Agriculture Others
1%
1% 0%
Domestic
Commercial Commercial
14% Industrial
Agriculture
Others
Domestic
84%
Domestic 19,268 42.1 21,485 46.4 25,394 42.8 27,601 43.6 30,720 43.7
Commercial 2,381 5.2 2,544 5.5 3,586 6.0 4,080 6.4 4,730 6.7
Industrial 12,924 28.3 13,972 30.1 19,738 33.3 20,561 32.5 22,441 32.0
Agriculture 5,620 12.3 4,542 9.8 6,669 11.2 6,988 11.1 7,949 11.3
Public 225 0.5 239 0.5 271 0.5 306 0.5 353 0.5
Lighting
Bulk Supply 5,338 11.6 3,576 7.7 3,658 6.2 3,762 5.9 4,048 5.8
& others
MKH
2004-05
30,000
25,000
20,000
15,000
10,000
5,000
2004-05
0
Domestic
Commercial
2004-05
Industrial
Agriculture
Public
Bulk Supply
2005-06
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0 2005-06
Total
2005-06
Domestic
Commercial
Industrial
Agriculture
Public Lit.
FIG.7.5
1999-00
25,000
20,000
15,000
10,000
5,000
1999-00
0
Total
Domestic
Commercial
1999-00
Industrial
Agriculture
Public
The above tables and graphs show some facts of Pakistan’s power energy data. Now we
will look at the electricity generation graph of Pakistan.
System Losses
Year Units Generated
Units %
MKW
1 2 3 4
1996-97 59,894 14,172 24.6
1997-98 62,915 15,453 25.5
1998-99 65,402 17,179 27.3
1999-00 66,562 17,664 27.6
2003-04 83,607 21,117 25.3
2004-05 88,379 21,603 25.4
2005-06 96,478 22,521 24.3
FIG.7.6
2005-06
System
Losses
19%
Units Generated
System Losses
Units
Generated
81%
We can clearly see the difference between consumption of electricity during 2004-2005
and 2005-2006 and 1999-2000. FIG.7.1 to 7.6 illustrates the story. That how electricity
consumption increases from 46,358 MKW to almost 60,000 MKW. Here is a point to
note that during year 2005-2006 system losses or line losses are about 20% which is
alarming. i.e. 20% of energy made by Pakistan is lost in lines during delivery of
electricity to destinations. In developed countries the line losses percentage is only 3%.
Analysis:
It was found that half a million ACs mainly of the split version was sold and added to the
power system during fiscal 2005-06. Thereafter, another 750,000 pieces of such
equipment was installed in Pakistan during the next financial year. 2005-06.
Importers and manufacturers of air conditioners had planned to sell upwards of a million
ACs during 2006-06, but due to the on-going power crises they could only purvey
750,000 such appliances. A market survey revealed that people wanting to add three ACs
during 2008 would now buy two and spend the rest of the money on procurement of a
generator. The sale figures for the three years viz. 2005-08 add to a phenomenal two
million pieces or an addition of 4000 MW of load or at least a usage effect equaling 800
MW at 20 per cent diversely factor. It was estimated that four million ACs of both the
window and the split versions (in addition to package and centrally air conditioned
buildings) were added between 2000-08 or a load of 1600 MW (with due diversity) to the
system. One can safely assume that a large number of such contraptions would be hooked
up to the system in addition to the equipment bought during 2000-2008. And if we
The other variables of our research such as industrial growth and consumption of
electricity in industry has almost no impact on shortage. Because industrial growth is
only 7% during 2005-2006 raised from 3.5% from previous year. But Domestic
consumption is increased from 5% per year to 30% which is alarming.
So we accept the first null hypothesis that Massive usage of air conditioners in the
country is responsible for the electriicty shortage in the country. And we reject all
other hypothesis.
Installation of low cost new energy generation plants is very necessary. (Low cost
plant includes solar energy and wind energy systems theses systems are expensive
at purchasing but after installation these are the free sources of energy).
Line loses in shape of theft of electricity should also be decreased by making new
and harder laws.
Home users use less energy so that industrial can benefit from it.
Daily Times
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www.worldbank.org
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In Table Format
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