Preview

Rpps in Pakistan

Powerful Essays
Open Document
Open Document
10126 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Rpps in Pakistan
RENTAL POWER PLANTS: PANACEA FOR ENERGY NEEDS OR LIABILITY FOR PAKISTAN

(K Raza Gardezi)
30 December 2010

EXECUTIVE SUMMARY
Pakistan is currently facing a power deficit estimated at 4000 MW - 5000 MW. To tide over the significant electricity shortages in the country, the Government of Pakistan planned to add 4,225 MW of generating capacity in 2009 against which the achievement was a meager 151 MW. There were many reasons for the failure of the 2009 capacity addition plan e.g. delays in Independent Power Projects (IPPs) due to a local and global financial crisis, security and terrorism related issues etc. Competitive bidding by 9 companies for new IPP projects under Private Power and Infrastructure Board's (PPIB) Fast Track process (Package A) was 'agreed in principle' by the Bid Evaluation Committee of PPIB in August 2008. Tariff was approved by NEPRA on 9th October 2008 and as of 6th December 2008 and the Cavalier IPP project was at stage 16 (notice for submission of Performance Guarantee and processing fee) out of 21 stages in PPIB’s Fast Track process. It was however reported in January 2009 that the project would not materialize because foreign investors were unwilling to provide financing due to recent increases in Pakistan's country risk premium.

This paper therefore intends to explore reasons for Pakistan to increase its power generation capacity through various new measures and incentives to private and foreign investors. The negative fallout of power shortages resulted in closure of industries, low production capabilities leading to unemployment and price escalation. This put a lot of pressure on the new government which was forced to take short term measures for filling in the power gap till its mid-term and long term power generation plans came on ground. The “Vision 2020 Program” of the government was initiated to address the power shortfall over the medium and long term with a view to add around 20,000 MW into

You May Also Find These Documents Helpful

  • Powerful Essays

    The country is facing acute power shortage. The power deficit has touched an all time high during summer 2008. The peaking shortage was 13% with an energy shortage of 9%.. During the 10th plan period, the generation capacity addition was just 21,180 MW, a mere 51% of the original target of 41,110 MW. For the 11th plan period the government has set another ambitious target of 78,577 MW but the progress during the first year of the plan (2007-08) was only 9,263 MW which was around 57% only of the target of 16,335 MW. Steep increase in liquid fuel cost, failure of rain and acute shortage of coal have made the situation worse during the current year.1 This calls of opportunities of huge investments in power generation.…

    • 1831 Words
    • 8 Pages
    Powerful Essays
  • Better Essays

    Pakistan’s economy continues to face numerous domestic and external shocks from 2007 onwards. Economic performance was affected from the devastating floods and rains, the internal security hazards, and the energy crisis. The economy of Pakistan during the last five years grew on average at the rate of 2.9 percent per annum. Deterioration in the power sector is the main constraint on growth. It is true that the energy crisis is frustrating the…

    • 1511 Words
    • 7 Pages
    Better Essays
  • Powerful Essays

    In India, the subject of electricity is covered under the Concurrent List in the Constitution of India, implying that both the central government and state governments have the power to make legislation for the sector. As a result, all major issues affecting the power sector require concurrent action by the central government and state governments. The allocation on power development during the first four Five Year Plans (FYP) was very low i.e. 10-15 percent of the total outlay. The low allocation of budget in power sector hampered the rural & urban electrification, and power generation capacity. With rapid industrialization and extensive demand for power both in rural and urban areas, the country has been reeling under severe power shortage and the country’s production effort has been severely curtailed by load shedding almost in all parts of country.…

    • 1831 Words
    • 8 Pages
    Powerful Essays
  • Satisfactory Essays

    Power and Energy Sector Development Roadmap (June 2010), Ministry of Finance Bangladesh Economic Review 2011(Bangla version) Private Sector Power generation Policy of Bangladesh, Ministry of Power, Energy and Mineral Resources…

    • 11125 Words
    • 45 Pages
    Satisfactory Essays
  • Good Essays

    Load Shedding in Pakistan

    • 1100 Words
    • 5 Pages

    Pakistan had a total installed power generation capacity of 21,000 MW in 2011. However, dependable or de-rated capacity is in the range of 14,000 to 16,000 MW during the year, due to variety of factors, whereas demand for electricity is increasing at an average annual rate of eight per cent.…

    • 1100 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    The concept was merchant power plant was introduced in India in 2003. With an existing huge demand supply gap of electricity in India, MPPs are considered to be panacea in the long run. Though the government has targeted capacity addition of 88,000 MW in the 12th FYP it seems faltering purely basis the trend of delays observed in project commissioning and the after effects of economic slowdown hitting the power generation sector in India. Can MPPs provide a sustainable solution to the energy needs of India? The paper attempts to find out challenges being faced by IPPs, various risks and return related to MPPs and what strategies can be adopted to promote merchant power plants and increase their market opportunities.…

    • 2288 Words
    • 10 Pages
    Powerful Essays
  • Good Essays

    Rpp Rental Power Plants

    • 2043 Words
    • 6 Pages

    Pakistan has around 20,000 MW of electricity production, but it falls short, it falls short of nearly 4,000 MWs which results in a lot of ways i.e. Load shedding (scheduled and unscheduled), low voltage, missing phases and massive breakdowns. The government has been watched taking actions for this problem, but there has not been any real solution that came across the vision of public. Present government has failed to anticipate and expand the growth and the supply-demand gap is increasing day by day. Many proposals have been delayed and/or cancelled, some were neglected intentionally. The constructions of dams have also been postponed due to political matters so we have also failed to produce hydro power. And due to lack of investment and failing in maintenance in the existing independent power plants (IPP) is now resulting in outdated power plants and they are producing lesser MWs as days go by. All this maybe because of we are facing losses due to rampant electricity theft and its not being controlled. Analysts say that line losses have gone upto 30-40 percent. According to another analyst there is a myth that many IPPs operate lower than their capacity because they are not able to pay for furnace oil since PEPCO is already in huge debts. This crisis has been around for ages and there has not been any wise decision taken over it by the government of Pakistan. So, still, the big news is that we are short of electricity.…

    • 2043 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    Energy Crisis of Pakistan

    • 632 Words
    • 3 Pages

    CAUSES OF ENERGY CRISIS IN PAKISTAN• ECONOMIC AND POLITICAL INSTABILITY• FLUCTUATION OF OIL PRICES IN ENERGY MARKET• FAULTY DISTRIBUTION SYSTEM• AGING OF EQUIPMENT• UNPRODUCTIVE EFFORTS• MISMANAGEMENT OF ENERGY RESOURCES…

    • 632 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Sedimentation

    • 4747 Words
    • 66 Pages

    electricity. It is Pakistan’s second biggest power generating project of vital importance. Ghazi Barrage, one…

    • 4747 Words
    • 66 Pages
    Powerful Essays
  • Good Essays

    Energy crises are a big problem in Pakistan. The reason behind this is the lack of good leadership, illiteracy, excessive use of fossil fuels and other political issues. Now, in these conditions the only way of survival and to overcome this problem is that we stop blaming and relying on the government or other private energy sector’s policies and start thinking to solve it by alternative methods.…

    • 550 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Ppp Bangladesh

    • 832 Words
    • 4 Pages

    A Public Private Partnership (PPP) is a partnership between the public and private sector for the purpose of delivering a project or service traditionally provided by the public sector. Public Private Partnership recognizes that both the public sector and the private sector have certain advantages relative to the other in the performance of specific tasks. By allowing each sector to do what it does best, public services and infrastructure can be provided in the most economically efficient manner.…

    • 832 Words
    • 4 Pages
    Good Essays
  • Good Essays

    The Value of Discipline

    • 313 Words
    • 2 Pages

    With drying of sea water, touching of oil prices to its peak, damaging of roads and streets, disappearing of electricity in cities is clearly giving idea of present condition of Pakistan. According to revolutionary Russian leader Lenin defined socialism as, “the electrifician of the whole country and the transfer of power to the people’s representatives” (cited by Kabir, 2002). For revolutionary development of any country, it is important that the country should be electrifying. As all industries and business which help to rise economy of country depends on energy in one form or another. Since many years, the looming energy crisis in Pakistan has covered us like spider net but, in recent months it has been increased and got a massive shape that could damage the economy and autonomy of the country. According to one report in The News, “this summer, the country faced an electricity deficit of over 2,500 megawatts (MW) … it is feared that by 2010 the gap between demand and supply could reach up to 8,000 MW” (Asif, 2007). Breakdown of power supply to cities has devastating effects on economical and social aspects of country, which could reduce by some strategies and principles.…

    • 313 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Load Shedding in Pakistan

    • 515 Words
    • 3 Pages

    Protests are taking place around the country. People of advanced countries cannot imagine to live in such circumstances for a single day. I have never seen such a intense electricity load-shedding during my whole life. Minister of water and power Raja Pervaiz Ashraf failed to fulfill his promises. Electricity load-shedding is one of the biggest issue in Pakistan including poverty and unemployment. Government should take drastic measure to finish this electricity load-shedding. Pakistani nation is unhappy that government and opposition is busy in other legislative issues instead of resolving these primary issues. I challenge that I can resolve electricity load-shedding issue in one year if I become minister or high official of ministry of power.…

    • 515 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Energy Crises in Pakistan

    • 3132 Words
    • 13 Pages

    Energy is assuming central stage due to the rapid economic growth in different parts of the world, pushing energy demand higher. Unfortunately Pakistan is facing major energy crisis nowadays. The energy crisis is affecting all walks of life in the country. The situation further deteriorated because of the stoppage of the supply to industrial units by Sui Gas Company. The Company was already going through a system of load-shedding itself due to excessive use of gas by CNG users. Many electricity generation units were shut off due to non-availability of the gas. The IPPs who were operating on furnace oil could not get the regular supply of the furnace oil due to the circular debt issue. And then naturally the blame game started, starting from the water shortage in Dams to furnace oil transportation problem, violence in Sind and maintenance activity in some independent power producers. The government admitted that in last 10 years not a single MW was added. The fact is that Pakistan is sustaining an acute shortage of Power. Its demand is increasing and production is declining due to aging of the plants. And no solution is in sight. The projects which are in pipeline will not come in line before 2013. And even the magnitude is such that it will not be able to fulfill the demand of today.…

    • 3132 Words
    • 13 Pages
    Good Essays
  • Good Essays

    My Computer

    • 443 Words
    • 2 Pages

    One of key difference between a developing country and a developed (a.k.a civilized) country is the power management. Electricity has become a basic need, and its unhindered, continuous and smooth supply is the necessity, but in countries like Pakistan, its still a luxury and more or less an elusive dream.…

    • 443 Words
    • 2 Pages
    Good Essays