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The article discusses the controversy surrounding net metering financial rules, specifically in relation to solar photovoltaic (PV) energy. The government wants to change the financial rules, while net metering users prefer to maintain the existing rules. The article highlights the benefits of rooftop solar PV, such as its green and non-polluting nature, technological advancements, and economic growth. However, there are also challenges, including technical issues and the financial burden on distribution companies (DISCOs). The main issue is that solar energy only works during the day, requiring additional grid and generation capacity, which leads to higher average tariffs or losses for DISCOs. This is seen as a cross-subsidy to wealthier individuals. The article suggests potential solutions, such as applying new rules to installations completed for five years, maintaining attractive tariffs for smaller prosumers, and limiting net metering exports to the grid. However, any changes should consider the moral and legal implications and potential impact on the market and economy. [Extracted from the article]

The article discusses the safety issues surrounding Liquefied Petroleum Gas (LPG) cylinders in Pakistan. It highlights that cylinder explosions, resulting in deaths and injuries, are mainly caused by low-quality manufacturing and damage during handling. The Oil and Gas Regulatory Authority (Ogra) attempts to control unauthorized manufacturing by issuing licenses, but illegal manufacturers continue to thrive. The article suggests increasing control measures for LPG filling and marketing companies, identifying illegal manufacturers, and implementing a track and trace system using RFID technology to improve safety. [Extracted from the article]

This article discusses the pollution and health impact of petrol pumps and the need for introducing controls in this respect. Petrol pumps are responsible for emitting toxic and carcinogenic gasoline vapours, which contain volatile organic compounds (VOCs) that affect human health and cause ozone pollution. These emissions, along with automotive exhausts, contribute to the creation of ozone and smog. The article emphasizes that vapour emissions from petrol pumps have been underestimated and often ignored, and studies have shown that these emissions can extend to a distance of more than 300 feet from the petrol pumps. [Extracted from the article]

A recent conference in Islamabad proposed the early retirement of coal power plants in Pakistan, which has caused concern among those aware of the country's energy problems. The proposal, reportedly financed by international financial institutions, is seen as inappropriate and insensitive given Pakistan's energy deficit and financial difficulties. In contrast, Indonesia, a rich and energy-abundant country, has been negotiating a similar proposal in the context of a larger NetZero program. The response from both Indonesia and the Just Energy Transition Programme has been negative, favoring the financing of renewable energy programs instead. The proposal is also seen as costly and could divert funds from more beneficial projects. The writer suggests that it would be more helpful to assist Pakistan in converting imported coal power plants to local Thar coal and investing in improvements to the energy sector, gradually reducing the reliance on fossil fuels. The writer questions why Pakistan is being targeted when neighboring India operates a much larger number of coal power plants. In conclusion, the writer urges international financial institutions to use their resources more wisely and avoid creating unnecessary uncertainties. [Extracted from the article]

The article discusses alternative fuels that can be used independently or mixed with traditional fuels like petrol, diesel, gas, and LPG. The main alternative fuels mentioned are ethanol and methanol. Ethanol, which can be produced locally by the sugar industry, has been used in a 5% mixture with gasoline in the past but has since been dropped. Methanol, on the other hand, is a versatile chemical that can be used as a starting chemical for producing other chemicals and petrochemicals, as well as an energy compound. It can be mixed with gasoline and diesel and burns efficiently in internal combustion engines without producing harmful emissions. The article also mentions the potential of biogas as a renewable resource that can be used in various forms, such as small household plants, community plants, large grid-connected plants, and bio-CNG plants. The use of biogas has environmental benefits and can be supported by grant funding and carbon markets. The article emphasizes the need for further research and careful consideration of the selection and choice of alternative fuels, as well as the potential risks and consequences for developing countries. [Extracted from the article]

Apart from life-line consumers and other low income groups' consumer tariff issue, there is a major source of anomaly in gas tariff which arises from very low gas tariff traditionally awarded to the fertilizer plants. Review of regional gas tariff Bangladesh increased gas prices at the beginning of 2023 bringing gas prices in most sectors to Tk 30 per M3 which is equivalent to Pk.Rs.2273 per MMBtu. [Extracted from the article]

Gas sector consumer tariff would also increase as similar base tariff has been recently increased by OGRA as well. Not to talk of imported fuel power plants wherein all costs are in foreign currency; investment or debt servicing and fuel cost and other variable costs, all of it. National Electric Power Authority (Nepra) has increased electricity base tariff by Rs 4.96 per unit from Rs 24.82 per unit to Rs 29.78 per unit. [Extracted from the article]

Recently, an oil bonded warehouse policy has been announced. Energy and especially oil storage form an important part of energy security policy in almost all countries, developing or developed. [Extracted from the article]

Pakistan has almost all the manufacturing know-how that is involved - steel fabrication, foaming, and glass industry. The textile processing industry has to usually install captive power units to utilize the exhaust heat for water heating purposes. Pakistan has a large textile industry that has dyeing and processing components. [Extracted from the article]

Copper Copper and Lithium are the future oil. Major copper and gold resources are at Reko Diq, which is now through with the legal problems. Copper resources (deposits) have been estimated at 5.9 billion tons (contracted), out of which 2.5 billion tons have been found recoverable, although the latter is variable and depends on the prevailing prices. [Extracted from the article]

It is being called by two names; Natural Hydrogen and White Hydrogen to distinguish it from other sources or methods to make Hydrogen. White Hydrogen was first discovered accidentally in Mali in 2014 while looking for oil or gas. We will discuss in this space the relevance of White Hydrogen to Pakistan and its EandP companies. [Extracted from the article]

Biogas units are usually installed where animal waste is available, while biomass cookers are used where solid agro biomass such as crop residue, tree and plant cuttings and shrubs etc. Community gas LPG-Air mix plants are being built, Biogas which costs less than 50% of LPG, can replace LPG or be used in consonance. [Extracted from the article]

Another imported coal-power plant in Jamshoro is already close to commissioning and cannot be switched to local coal readily and would need major changes in design. It is a super-critical power plant based on lignite coal but has specialised coal-crushing facilities which dewater the coal simultaneously with crushing and have larger boiler furnace designs required for low CV coal. The Gwadar coal-power plant has reached an impasse. [Extracted from the article]

There are plans to retire 19 power plants of an aggregate capacity of 7339 MW as per IGCEP (Integrated Generation Capacity Expansion Plan) in the period 2021-2031. Its LSFO power plant component has an advantage for environmental reasons but has a disadvantage from cost and foreign exchange point of view, as local refineries, except ARL, produce HSFO. [Extracted from the article]

Not to talk of imported fuel power plants wherein all costs are in foreign currency; investment or debt servicing and fuel cost and other variable costs, all of it. Chinese power plant investors and operators have been giving various kinds of ultimatums to the government of Pakistan for releasing due payments with respect to capacity charges, fuel charges and various operating costs. [Extracted from the article]

Sindh Engro Coal Mining Company(SECMC) has filed a tariff petition for expanding its capacity. Diesel cost appears to be one of the significant costs at 6.58 USD per ton coming out to be 15-16 percent of the per ton cost of production. [Extracted from the article]

There is despondency in the gas sector partly due to law and order issues in the potential gas deposit-containing areas. Shifting gas consumption to electricity may have been motivated by the continuous decline in gas reserves and supplies. Two news have been reported in newspapers recently - World Bank's support for energy conservation in Pakistan, and the government's drive to shift consumption from gas to electricity. [Extracted from the article]

Finally, much-awaited new gas tariff has been announced by government under negotiations with the International Monetary Fund (IMF). A very remarkable change in Bangladesh's new gas tariff is that there is a near uniform tariff for all sectors of Rs 1850.32/MMBtu except power sector which has a lower tariff of Rs 863.48/MMBtu. Under new gas tariffs in the two countries, the tariffs are almost comparable; Pakistan's tariff (Rs.1050) vs Bangladesh's of Rs 939, only 12% higher than that of Bangladesh. [Extracted from the article]

There are 26 million petrol bikes on the road, and around two million new bikes are sold every year. The government has announced a financing package to promote the sale of e-bikes. [Extracted from the article]

Import and taxation policies can encourage fuel efficiency through varying tariff rates. Older vehicles are generally less fuel-efficient either through wear and tear or through fuel efficiency improvement in new vehicles. Oil imports have decreased by 26 per cent in the first five months of the current fiscal year (July-Nov). [Extracted from the article]

Privatisation issues Why hasn't privatisation succeeded or even implemented in the power sector? Privatisation background There has been a long experience of privatisation. DISCOs (distribution companies) in the power sector have been a constant source of worries for successive governments in Pakistan. [Extracted from the article]

Either the supplies to posh areas may be reduced to incentivize them to shift to LPG or gas tariff may be increased to be comparable with LPG. Other issues and proposals LPG is heavier than natural gas and settles near ground while natural gas goes up. [Extracted from the article]

Hydro pump storage has been there for a long time now but its share has not been as high as can be expected in future laden by solar and wind power. In Pakistan, installed hydropower generation capacity is around 10,000 megawatts, accounting for 15% of total hydro potential of 60,000MW. Hydropower has been one of the most pursued sources of energy and the only available renewable energy source before the era of wind and solar power began recently. [Extracted from the article]

The article discusses the controversy surrounding the increase in energy prices in the country, particularly focusing on the debate over Independent Power Producer (IPP) contracts. Critics argue that Take or Pay contracts are unfair as they require payment to IPPs even if no electricity is supplied. The government is reportedly negotiating with IPPs to convert some contracts to Take and Pay, aiming to address consumer concerns about high tariffs. Additionally, the article explores the challenges and potential solutions related to the restructuring of the power sector and the delay in implementing Competitive Trading Bilateral Contract Market (CTBCM) due to market design issues. [Extracted from the article]

Currently, green hydrogen costs 4-5 Rs/kg, while black or grey hydrogen costs under 1 USD/kg. Hydrogen- natural gas mixture can be used as a mixture or hydrogen can be separated from the mixture. While industrialized and developed countries are moving in the direction of hydrogen gradually including RandD and hydrogen production, even developing countries are moving in this direction as well. [Extracted from the article]

AT and C Losses There are three types of losses: Transmission losses, Distribution losses and Commercial losses (dues not received). Circular Debt DISCOs can't pay off their debt to IPPs (Independent Power Producers), CPPA-G and to other suppliers and agencies and thus these losses are accumulated and give rise to circular debt. Nepra recognized only Rs.343 billion losses, bringing the net losses to Rs.573 billion. Nepra (National Electric Power Regulatory Authority) has recently released its annual State of Industry (SOI) report 2022. [Extracted from the article]

Kapco power plants, which are RLNG-combined cycle power plants, with a combined capacity of 1,600MW will also be retiring; Kapco-3 is retiring in 2023 and Kapco 1 and 2 are to retire in 2026. The capacity of the existing RLNG power plants is 9,789MW which will be reduced to 8,710MW by the retirement of a number of steam power plants. However, under the Thar coal scenario, with the addition of two 1,320MW plants, a total of 7,230MW of Thar coal power capacity will be achieved. [Extracted from the article]

Residential electric tariff of Maharashtra and Pakistan are identical - Maharashtra's highest tariff for (700 units plus) is Rs34.75 per kWh vs Pakistan's Rs32.77 per kWh. Compared with the corresponding Pakistani tariff of Rs32.77 per kWh, Pakistan's tariff is 31% higher than that of India. Similarly, the minimum tariff (200 units and lower) for Maharashtra is Pak Rs12.39 per kWh vs Pakistan's tariff of Pak Rs13.41 per kWh. [Extracted from the article]

From August 1, the government of Pakistan has reduced gasoline price by Rs 3.05 to Rs 227.19 per litre. New petroleum products' prices in Bangladesh have come as a bombshell in the region: petrol's price has been increased by 45% and diesel's and kerosene's by 41.7%. Higher international oil prices and a falling Rupee have adversely impacted Pakistan's economy, causing heavy inflation as almost anything is oil dependent. [Extracted from the article]

Coal is transported through rails, but unfortunately there is no rail link connecting the Thar coal site to the Pakistan Railways network. The prices of imp Pakistan has three coal-based power plants which run on imported coal - the Sahiwal, Hubco and Port Qasim plants, each having the capacity to produce 1320MW. In normal circumstances, Thar coal-based electricity and imported coal-based electricity might have cost the same. [Extracted from the article]

While lower oil prices go unnoticed and without affecting the economies of the developing countries in a positive or significant way, higher oil and gas prices cause havoc - socially and economically. Thar coal remains highly under-utilized, while imported coal power plants may be closed down if coal prices continue to remain high. However, IEA storage requirement and maintenance of three months' storage could not affect the prices in the recent days; it may cater to the strategic requirement assuring continued supplies during emergencies. [Extracted from the article]

Rising petrol cost can be substituted by solar electricity produced by EV motorcycle users. These days LNG-based electricity is costing Rs 25 per kWh while the imported coal-based electricity is costing the same amount. A fast track solar programme appears to be the need of the hour for reducing electricity cost. [Extracted from the article]

Petroleum prices have been maintained at the status quo, but as it appears that it may not be possible to maintain the prices at the present level for long. GoP faces a dilemma; petroleum prices have already undergone a big rise in a year in the midst of a general inflation wherein food prices have also suffered due to food prices inflation in international market as well. It may be noted that petroleum prices in Pakistan are lower than in other developing countries which prompts the IMF to pressurize the government to increase petroleum prices. [Extracted from the article]

Pakistan has 180 billion tonnes of lignite coal deposits, which have the potential of firing 1800 power plants of 1000 MW for 30 years or 500 power plants for 100 years. Thar lignite may not necessarily contain lithium, but since lignite coal's geographical location does not affect its properties, it may be possible that Thar lignite coal contains lithium. [Extracted from the article]

Both prices and non-price instruments (such as continued low supply and pressure) can be used to discourage this segment away from gas. Expansion is taking place in this group and new gas demand will also come from this sector - although there is a case for gradual enhancement of its low gas tariff, especially in the expensive LNG regime whose share is increasing by the day. The gas crisis has been caused by continuously depleting local gas resources, and rising LNG prices. [Extracted from the article]

By 2030, Pakistan will have around 60 percent market share of renewable energy sources about half of which will come out of solar and wind. While there are other renewable energy sources in Sindh, Balochistan has limited options and merits the installation of solar and hybrid power plants. Solar and wind energy resources can be installed on the same plot of land, increasing final output and utilising common ancillary and transmission facilities. [Extracted from the article]

Pepco was, however, almost dissolved except in legal terms, mainly due to power politics between Disco management and Pepco, as the new idea of Discos autonomy under an independent board of directors (BoD) emerged. Pepco should not be considered an unnecessary burden when even private groups have head office teams monitoring and coordinating with the constituent companies despite individual companies' boards of directors. [Extracted from the article]

A new oil refinery policy is at advanced stages of consideration. However, the strategic oil storage policy for foreigners may be developed and FDI in such storages may be encouraged. Oil producing countries may also try to lock long-term sales opportunities through investments in oil refineries abroad. [Extracted from the article]

Indeed, the best option is to somehow reduce the capacity charge which has been increasing due to slow demand and higher capacity cost. Peak summer demand exceeds 25000 MW and peak winter demand is around 10,000 MW. It was recently reported that the PM has asked the Ministry of Finance and the Power Division to reduce circular debt without increasing the tariff, and handle the capacity charges. [Extracted from the article]

There is a fundamental structural issue that will remain - the huge difference between summer and winter peak demand which leads to over investment in capacity and the generation cost increases beyond a reasonable level. Excess capacity at higher cost is the primary culprit, and its impact, it is hoped, would become more bearable with the uplifting of the economy which - ironically - depends significantly on energy cost and prices. He circular debt issue is getting more serious by the day and the worst has yet to come with the installation of new capacity while demand continues to stagnate. [Extracted from the article]

Electricity prices in Pakistan are the highest in the region, but oil prices are almost the lowest in US dollar terms, although due to heavy currency depreciation, the rupee price impact has been high. Traditionally, petrol prices have been higher in India compared to Pakistan and diesel prices used to be lower. In Pakistan, petrol prices have traditionally been the lowest in the region, while in the case of diesel prices have been varying. [Extracted from the article]

In this space, we will examine the non-tariff options to deal with problems of rising cost and circular debt, which has forced the government to propose the increase in power tariff. The government has announced plans to increase power tariff by Rs5.65 per unit, an estimated 40% increase. Without undertaking reforms and increasing efficiency, the tariff hike alone may prove to be counter-productive. [Extracted from the article]

The National Electric Power Regulatory Authority (Nepra) has recently issued its determination on the applicability of open access charges to consumers and has rejected a petition of the Central Power Purchasing Agency-Guarantee (CPPA-G) in this respect connected with wheeling charges. In terms of stranded costs, DISCOs argue that they have made infrastructural investments, which will remain under-utilised if open access gets on its way and a significant number of large good-paying and low-loss consumers shifts to this system. However, power distribution companies (DISCOs) argue, in technical regulatory jargon, that the buyer pays what they call cross-subsidy, stranded costs and other incidentals such as emergency power. [Extracted from the article]

The Cabinet Committee on Energy (CCOE) has rejected a request of liquefied natural gas (LNG) terminal developers for allocating gas transmission and distribution capacity in advance. LNG demand is increasing (while local gas production is decreasing and is expected to reach almost zero levels in the next 10 years) which is reassuring and even enticing for the investors, and is perhaps the only positive side of Pakistan's market. [Extracted from the article]

The Sindh government is in negotiations for a large project on Thar coal with 1,320-megawatt power generation capacity and production of associated energy products like gasoline and diesel. It has been successfully proved in China and the US that lignite (Thar coal type) can be gasified and subsequently converted into various products such as fertiliser, gasoline, diesel and chemical products. In Pakistan's case, it would save foreign exchange, if nothing else - if local methanol production is even equal to gasoline or diesel prices. [Extracted from the article]