Think indigenously

The economy is back on growth track due to high domestic demand and the biggest challenge the country is facing – both in the short and long run – is to generate foreign exchange surplus or, perhaps, savings on imports. And the biggest chunk of imports historically has remained in the energy sector, mostly in the form of fuel.

When the government was confused and could not find ways to have new projects to fill in the power gap, it started allowing anyone and everyone coming with whatever option of power production without delving into scientific demand-supply analysis. The returns are guaranteed and not only both federal and Punjab governments are coming up with power projects based on imported fuel, but a few private domestic players from various industries jumped into the power sector as well. This was followed by an array of projects under the CPEC.

Once all these projects were on paper with financial close of some, the government realised that the country may come into a power surplus by 2018; whilst majority of projects are coming on imported fuel such as RLNG and imported coal. Water and power secretary at that time imposed a ban on imported fuel projects, and even those projects whose LOIs were signed but financial close was not done were converted into local fuel such as Lucky (660MW) and Siddiqsons (330MW). These projects were envisaged on imported coal but were later changed to domestic fuel.

With around 10,000MW coming online by 2018, mainly on imported fuel, the focus was tilted towards indigenous fuel sources in the long run. The upcoming projects are sought as stop-gap solutions till the work on domestic fuel option completes – such as a number of projects on Thar Coal, an array of hydel projects, and more importantly, other renewable including wind and solar.

The policy was well applauded, though it came a little too late and sponsors of Lucky and Siddiqsons had to spend again on feasibilities and studies on local coal, which they had already done on imported coal projects. Nonetheless, it was for the better future of the country.

However, lately, sources revealed that, the Cabinet Committee on Energy (CCoE) presided by the PM has decided to lift the ban on imported fuel power projects. That might be to accommodate a few who want to come in RLNG-based power projects.

That is not called for! It’s absurd and against national interest. The policy should have a clear stipulation of relying on indigenous energy sources. Who will pay the capacity payment when energy is already in surplus based on existing projects in the pipeline? What about the bill on incremental imported fuel?

The need is to see what the world is doing. Many countries in Europe are relying almost all of their energy needs on renewable. In India, solar power has become cheaper than coal power. And the potential is huge in renewable in Pakistan, especially in wind. Think indigenously, for once.