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Enhanced expenditure and research needed for power generation.

With growing population, industrialisation and urbanisation in developing countries, the growth in energy consumption is progressively increasing. It is estimated that developing countries share in energy consumption was only 15 per cent of the total world consumption in 1972, which is likely to grow upto 25 per cent by the year 2000 A.D.

Some interesting results have been derived regarding energy consumption and real economic growth in the developing world. This relationship is termed as income elasticity of demand for energy consumption. In South Asia, during the period 1969-70, the income elasticity of demand for energy was as high as 1.9. Explained in plain words this shows that annual GNP growth rate was 3.6 per cent during this period, while the annual energy growth rate was 5.8 per cent. This clearly reveals that energy consumption is rising much ahead of GNP growth of these countries.

Further projections for low income economies show, that if the energy price rose by 50 per cent between 1985 and the year 2000 A.D. the income elasticity of demand for energy will be only 1.3. In other words, higher price will curtail energy use, which may ultimately affect their growth of agriculture, manufactures and transport.

In Pakistan, the number of energy consumers is increasing approximately at the rate of 11 per cent per annum, almost four times the rate of increase in population. This is primarily due to urbanisation and accelerated rate of supply of electricity in rural areas. In 1989-90,the total number of consumers were slightly over 6.4 million, and by the end of June 1991, which increased to 7.3 million. In terms of consumption by sectors, 32 per cent is used in household sector, 21 per cent in agriculture, 34 per cent in industry, and the rest in public lighting.

This growing demand of energy is being covered through oil, gas and hydroelectric generation capacities expansion over the years. The table gives a broad idea of growth of energy generation in the country.

In 1987-88, 66.6 million kwh of hydel power was produced, which rose to 16.9 million kwh in 1989-90. As against this, 14.5 million kwh were generated through thermal sources, which rapidly grew to 16 million kwh by 1990-91. In percentage terms, in the latter year, about 53 per cent power was supplied through hydel sources and 47 per cent through thermal projects. Some encouraging results have been achieved in domestic crude oil production.

In 1980-81, 30 million barrels of crude oils were imported and 3.5 million were domestically produced. However by 1989-90, imported crude oil imports were reduced to 26 million, and against that 20 million barrels were extracted domestically. This is indeed highly credit able that oil production has impressively increased in the country.

In recent years, major additions have been made through development of oil fields at Khaskheli, Leghari and Dhurnal. In Dhurnal alone, 5.8 million barrels were extracted in 1989-90. In addition to that, new fields have started yielding crude oil at Lashari, Tando Adam and Mazari in Lower Sindh.

It may be pointed out that energy sources in the country are scarce and their development requires large financial resources. It is a highly capital intensive area of investment. In view of limited public sector resources availability, private sector has also to be associated in new ventures to overcome the constraints. The private sector is being increasingly associated with power generation, which will enable the government to devote its limited resources to other important development areas, such as communications and road network.

In this regard, it may be further mentioned that power losses in transmission and through other sources should be effectively curtailed. It is estimated by WAPDA that its annual loss in 1988-89 was of the order of 23.9 per cent of its total power generation, which is presumably reduced to 2l percent in 1990-19. However, this is still too high and major effort is required to minimize it.

The major reliance in power generation is still on hydro-electric projects and in this regard as well considerable headway has been made. One important project worth mentioning is Chashma Lowhead project of 270 MW, of which 135 MW will be developed under phase 1. Lowhead power plants of 144 and 108 MW each at Jinnah and Taunsa barrages will also be constructed.

This brief review of power generation in Pakistan shows that quite commendable growth has been recorded in the past. However, it is visualised that in the near future the demand is likely to increase at an accelerated rate. There are some cogent reasons behind it. The pace of urbanisation in the country has increased considerably and it may grow at a further accelerated pace in future due to increased industrialisation and the resultant migration from rural to urban areas. Secondly, along with increased mechanisation of agriculture, the agro-processing industries are likely to develop steadily. This will further enhance the rate of energy demand. Thirdly, the road and telecommunication network is rapidly spreading, which may have another large claim on increased energy demand, due to larger growth of cargo and passenger traffic.

In view of possibly larger growth of future demand, sustained efforts shall be required for new discoveries of oil and gas and enhanced hydro-electric power supply. A more dynamic petroleum policy needs to be formulated for exploration and optimal extraction. Concerted research is also needed in Basin studies programme of petroleum sector. The country possesses ample and varied energy resources, they have to be harnessed skilfully for achieving maximum results.
Energy Generation in Pakistan (Million kwh)
 Hydel % to total Thermal % to total Total
1987-88 16689 61 10762 39 27451
1988-89 16974 59 11924 41 28898
1989-90 16925 54 14502 46 31427
1990-91 18298 53 16095 47 34394
Source: WAPDA, Pakistan, 1991.
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Title Annotation:Pakistan's power industry
Author:Kadri, Ashfaq
Publication:Economic Review
Date:Apr 1, 1992
Previous Article:Mangla hydel power station.
Next Article:Thermal power project Muzaffargarh.

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