Insufficient reserve capacity
Between 2008 and 2018, Pakistan expanded its installed power plant capacity from 18 GW to 34 GW. Plans envisage further expansion to almost 70 GW by 2025. However, the National Electric Power Regulatory Authority (NEPRA) expects delays, especially for planned hydroelectric power plants. According to the local Ministry of Energy, peak loads rose by 4.8 GW to 25.4 GW between 2014 and 2018. Peak load is usually reached in June, when it is more than 50% above the level during the low-load period in December. In the medium term, an annual increase in peak load of 4% to 5% is expected.
Since the operational power plant capacity is significantly below the installed capacity, there were low or no reserves at peak load times in 2018. Pakistan operates two separate power grids, though electricity can be exchanged between the two. The network of the National Transmission & Dispatch Company (NTDC) supplies all of Pakistan with the exception of the economic metropolis of Karachi, for which Karachi Electric (KEL) is responsible.
Pakistan: Projected power plant capacities 2018 to 2021 (in MW)
|Year||Planned installed capacity||Planned available capacity at peak load time||Projected peak load demand||Deficit / surplus|
Notes: NEPRA projected values; 2017 values are actual values; values were missed in 2018
Sources: National Electric Power Regulatory Authority (NEPRA); National Transmission & Dispatch Company (NTDC); Karachi Electric (KEL)
CPEC program will bring new power plants
The lack of reserve capacity requires scheduled power cuts (load shedding) and causes widespread power outages in the event of unplanned outfalls at large power plants. On November 12, 2018, during a low-load period, the failure of the 1,260 MW Bin Qasim power plant in Karachi led to a power outage that affected 80% of the city. It was the fifth time the power grid in Karachi collapsed within only two months. At the beginning of January 2018, electricity in Islamabad, Lahore, Rawalpindi and Gujranwala, among other cities, had to be switched off by the hour because the capacity of the NTDC grid fell short by 3 GW. The power failures are caused by the overloaded, often dilapidated power grid.
Additional power plant capacity will be realized as part of the China-Pakistan Economic Corridor (CPEC) program. The necessary capital comes primarily from China in the form of direct investments or long-term loans. Private Chinese investors primarily provide financing themselves with loans from the China Development Bank and the China Exim Bank. In turn, China encourages Pakistani and foreign companies to participate in the projects.
Pakistan: Power plant projects as part of the CPEC initiative (as of January 2019)
|Project||Capacity (in MW)||Total investment (in million US$)||Project status, commissioning||Operator|
|Coal Power Plant / Port Qasim Karachi||1,320||2,085||OP, 2018||Port Qasim Electric Power Company|
|Coal Power Plant / Hub, Balochistan||1,320||1,995||UC, 2019||China Power Hub Generation Company|
|Sahiwal Coal Power Plant||1,320||1,800||OP, 2017||Huaneng Shandong Ruyi Energy Pakistan Company|
|Suki Kinari Hydropower Station||870||1,802||UC, 2022||Suki Kinari / China Gezhouba Group|
|Karot Hydropower Station||720||1,698||UC, 2021||Karot Power / CSAIL / CTGI /China Three Gorges|
|Thar Coal Power Plant 1||660||1,100||UC, 2019||Engro Power Generation Thar / China Machinery Engineering|
|Quaid-e-Azam PV Solar Park 1||300||460||OP, 2016||Appolo, Best & Crest|
|UEP Wind Farm||99||252||OP, 2017||UEP Wind Power Company|
|Sachal Energy Wind Farm||50||134||OP, 2017||Sachal Energy Development Company|
|Dawood Wind Farm||50||115||OP, 2017||Hydrochina Dawood Power Company|
|Three Gorges 2. Wind Power Project||50||112||OP, 2018||Three Gorges Second Wind Farm Pakistan|
|Three Gorges 3. Wind Power Project||50||112||OP, 2018||Three Gorges Third Wind Farm Pakistan|
Notes: CPEC = China-Pakistan Economic Corridor; OP = Operational; UC = Under Construction
Source: Embassy of the People’s Republic of China in Pakistan
China spends billions on new power plants
Chinese power plants are increasing the share of private independent power plants (IPPs), which accounted for approx. 60% of electricity generation in 2018. Under the CPEC program, a total of eight power plants with a total capacity of 3.2 GW were constructed between 2017 and 2018. Of this, two power plants fired with imported coal from Indonesia, South Africa and Australia account for 2.6 GW. Two other coal-fired power plants totaling 2 GW and two hydropower plants totaling 1.6 GW are currently under construction. Additional coal-fired power plants totaling 3.3 GW are planned for Pakistan’s large coal region in the Thar Desert. The project of a 1,320 MW imported-coal power plant in Rahimyar Khan was cancelled.
Among the planned Chinese investments is a 300 MW power plant in the port city of Gwadar which would be fueled by imported coal. The investor is Shanghai-based CIHC Group. However, the provincial government is criticizing the coal project due to an expected negative environmental impact. Gwadar is seen as a modern, environmentally friendly city, and the coal-fired power plant does not fit with this concept. For Gwadar, a gas-fired hybrid power plant with solar and wind power components had been discussed, but the originally planned LNG import terminal was cancelled.
Renewable energy to be expanded aggressively
So far, renewable energy has played a minor role in Pakistan’s energy-production mix. The proportion of renewables is currently only 5% (solar, wind, and bagasse/biomass but excluding hydropower). Gas, oil and coal account for 63%, hydroelectric power for 27% and nuclear power for 5%. The Ministry of Energy has set a new target of a 20% share of renewables in power plant capacity by 2025 and a 30% share by 2030. A corresponding concept should be presented in spring 2019 after consultation with the provinces.
Pakistan’s largest renewable energy project, a 300 MW photovoltaic park in Bahawalpur (Punjab), was recently completed and is to be expanded by an additional 700 MW. Five wind farms totaling 300 MW are in operation. Additional wind farms are also planned, including two China-financed farms of 50 MW each.