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Pakistan Plans to Increase Energy Generation by 300 percent and Phase out Thermal Power in 20 Years

If you want to know how Pakistan plans to increase energy generation capacity by 300 percent, this article is just for you.

According to recent reports in the energy sector, National Transmission and Despatch Company (NTDC) in consultation with public and private sector agencies and consultants have prepared an Indicative Generation Capacity Expansion Plan (IGCEP) 2018-40 which proposes to phase out almost all thermal power plants while increasing the energy generation capacity by 300 percent in the next 20 years.

The IGCEP 2018-40 states that the government of Pakistan (GOP) needs to increase the generation capacity based on three tentative economic growth (GDP) scenarios which are as follows:

Scenario 1: If Pakistan’s GDP growth rate is at 4.5 percent then the GOP needs increase generation capacity to 65,100 megawatts to generate 370,500 gigawatt-hour.

Scenario 2: If Pakistan’s GDP growth rate is at 5.5 percent then the GOP needs increase generation capacity to 80,500 megawatts to generate 458,000 gigawatt-hour.

Scenario 3: If Pakistan’s GDP growth rate is at 7 percent then the GOP needs increase generation capacity to 110,000 megawatts to generate 630,500 gigawatt-hour.

Current Energy Capacity and Mix

Please find the breakdown of Pakistan’s existing energy capacity:

  1. Total Installed Energy Capacity – 33,500 megawatts
  2. Available Energy Capacity – 29,000 megawatts
    1. Coal – 3,000 megawatts
    2. Hydro – 9,7000 megawatts 
    3. Thermal – 20,000 megawatts
    4. Nuclear – 1,945 megawatts
    5. Renewable – 1,900 megawatts
Proposed Energy Capacity and Mix

The IGCEP 2018-10 proposes the following additions in the total energy capacity:

  1. By 2025 – 17,300 megawatts
    1. Public Sector Investment   – 6,000 megawatts
    2. Private Sector Investment – 11,300 megawatts
  2. By 2030 – 8,600 megawatts
  3. By 2040 – 98,100 megawatts
    1. Hydro – 29,000 megawatts
    2. Local Coal – 20,000 megawatts
    3. Imported Coal – 5,000 megawatts
    4. Nuclear – 4,300 megawatts
    5. Renewable – 16,000 megawatts 

Note: The GOP plans to phase out oil based thermal power plants which would mean stricter contract renewal requirements. It makes us wonder how private oil based thermal power plant operators would negotiate their contracts with the GOP. 

The GOP also intends to reduce Regassified Liquid Natural (RLNG) projects by adding “take or pay basis” concept. 

IGCEP 2018-40 Objectives

The rationale behind IGCEP 2018-40 is to meet the rising energy demand by focusing on cost efficient energy generations options. We have deduced the exact objectives of IGCEP 2018-40 below.

  1. Increase affordability of local consumer by encouraging cost efficient projects.
  2. Focus on harnessing indigenous resources.
  3. Strengthening strategic China-Pakistan Economic Corridor (CPEC) based projects.
  4. Increase the difference between peak load requirements verses installed load requirements. 
  5. Be self sufficient and less dependent on foreign imports. 
  6. Increasing Pakistan’s economic security and sustainability. 

Keeping in view of GOP’s ambitious plans to improve the energy generation capacity by 300 percent by 2040, work will be challenging as various existing private sector investors will need to be given incentives and financial security. GDP growth would also need to be closely monitored along with the scenarios presented in the IGCEP 2018-40. 

A few questions arise, what if the GDP is below 4.5 percent, then what will happen? How will the plan be executed then and how will a local electricity consumer be effected? Keeping all our questions in mind let us hope that progress is carried out with dedication and selflessness.   

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