Pakistan Energy Sector Issues ok

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* This Paper was presented during a Research Conference held at Lahore School of Economics on April 22-23,2010. The Paper was followed by Graphic Study (Slides) attached herewith.

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Ton oil equivalent (TOE) is a widely employed unit of energy and corresponds to 10 Giga calories or 4.1868 * 1010 Joules; Kgoe is 10-3 TOE.

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Country

Energy Consumption per Capita (2007) Kgoe

Pakistan India China Thailand Malaysia UK USA Low Income Countries Middle Income Countries High Income Countries

490 490 1320 1560 2420 3895 7885 490 1510 5520

Source: International Energy Information Agency (IAEA)

Impact Category

Pollutant/Burden

Effects

Human Health – mortality Human Health – morbidity

PM10a, SO2,NOx, O3 PM10, O3, SO2, PM10, O3 PM10, CO PM10

Reduction in life expectancy Respiratory hospital admissions Restricted activity days Congestive heart failure Cerebro-vascular hospital admissions Cases of chronic cough in children Cough in asthmatics Lower respiratory symptoms Asthma attacks Yield change for wheat, barley, rye, oa ts, potatoes, sugar beet Yield change for wheat, barley, rye, oats, potatoes, rice, tobacco, sunflower seed Increased need of liming

Crops

O3 NO x, , SO2 O3

Global Warming

Ecosystems

Acid deposition CO 2, , CH4, N2 O, N, S

Acid deposition, nitrogen deposition

World-wide effects on mortality, morbidity, coastal impacts, agriculture, energy demand, and economic impacts due to temperature change and sea level rise Acidity and eutrophication (avoidance cost for reducing areas where critical loads are exceeded)

Source: External Costs: Research Results on socio-environmental damage due to electricity and transport: European Commission Study (2003)

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External Cost is the unaccounted and/or uncompensated adverse impact of the activities of one group on another group. The adverse impact can be on health, crops, material, recreation,...

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Andrew-Speed, P. “China's Drive for Energy Efficiency” April 2009 Reference 23

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Reference 4 and Reference 5

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Fuel Coal & Ignite Oil Natural Gas Nuclear Biomass Hydro Photovoltaic Wind

11

Denmark

France

Germany

Norway

Spain

Sweden

U.K

5.4-9.5

9.5-13.6

4.1-8.2

-

6.8-10.9

2.7-5.4

5.4-9.5

2.7-4.1 1.4 0.15

10.9-15 2.7-5.4 0.4 1.4 1.4 -

6.8-10.4 1.4-2.8 0.3 1.4 0.8 0.3

1.4-2.8 0.2 0.2 0.3

1.4-2.8 4.1-6.8b 0.04 0.3

0.4 0.07 -

4.1 - 6.8 1.4 - 2.8 0.3 1.4 0.2

a)

Sum total of quantifiable externalities: public health; occupational health, material damage, global warming

b)

Biomass co-fired with ignite

*

Euro cents converted to US cents by multiplying by 1.36

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4 Reference 17

13

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Natural Gas Import Pipeline Projects

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References 1 and 3

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Fuel

MTOE

Percentage

Natural Gas Oil Hydroelectricity Coal Nuclear Electricity Imported Electricity

30.291 19.206 6.852 5.784 0.735 0.048 62.92 -

48 31 11 9 1 100 66 34

Total Indigenous Imports

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References 1 and 2

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Science and Sustainability

Fuel

MTOE

Percentage

Natural Gas Oil Products Electricity Coal

16.502 11.529 5.978 5.405 39.41

42 29 15 14 100

Sector

MTOE

Percentage

Industry Transportation Domestic Commercial Other Agriculture

16.804 11.567 8.046 1.456 0.736 0.804 39.41

43 29 20 4 2 2 100

Total

Total

Coal

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Heating Value M J/Kg

Ignite A Thar Kind B Higher

15 15-19

Sub-Bituminous

19-27

Bituminous

24-32

Authracite

32-33

7 Heating values of higher quality coals range up to 33 MJ/Kg

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Resource

Estimates Potential

Energy Content

Oil Gas Coal, Measured Coal, Inferred Coal, Hypothetical Installed Hydel Potential Hydel

336 Million barrels 29 TCF a 900 BTU/SCF 3,303 Million tons 56,382 Million tons 113, 798 Million tons -

45 MTOE 628 MTOE 1477 MTOE 25,220 MTOE 50, 903 MTOE 6595 MW 40,000 MW

Annual Production 24 Million barrels 1.4 TCF a 700 BTU/SCF 4.87 Million tons -

Reserves to Production Ratio 14 21 678 16 percent

Source: Reference 3

Fuel Oil Gas Coal (Measured) Hydel Potential Realized

Source: Reference 3

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Reference 1

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Energy Source (MTOE) Oil

2010

2015

22

2020

2025

2030

4

3

1

1

1

Gas

40

36

25

19

20

LPG

1

1

1

1

1

Coal

2

3

4

6

8

Hydel

7

8

15

17

24

Renewable & Nuclear Total Indigenous Supply Total Energy Requirements Energy Deficit

1

1

5

8

14

55

52

51

52

68

73

96

131

176

238

18

44

80

124

170

Imports for the Deficit Energy Source (MTOE)

2010

2015

2020

2025

2030

14

29

46

64

85

LNG or Gas LPG

-

4 1

18 2

34 3

48 4

Coal

4

10

14

23

33

Oil

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Science and Sustainability

Carbon Dioxide 2249 1672 1135 0

Coal Oil Natural Gas Nuclear

Sulfur Dioxide 13 12 0.1 0

24

Nitrogen Oxide 6 4 1.7 0

Source: http://www.epa.gov/cleanenergy

Internal Cost of Electricity Generation *

Fuel

Capital

O&M

Fuel

Median External** Cost

Total Cost

Total

Gas LNG

1.7 1.7

0.9 0.9

2.7 4.1

5.3 6.7

2.8 2.8

8.1 9.5

HSFO***

1.6

1.0

6.5

9.1

10.4

19.5

Coal-Imported ****

2.3

1.0

2.4

5.7

6.8

12.5

Coal-Thar Hydel

2.5 5.0

1.0 0.1

2.5 -

6.0 5.1

6.8 0.2

12.8 5.3

Nuclear

4.6

-

1.1

5.7

0.3

6.0

* **

Mukhtar Ahmed: Feeling the future – Page 2, From Table-9 From Table-3

***

HSFO: High Sulfur Fuel Oil. HSFO price corresponds to US $ 60/barrel of Crude

**** Delivery price of imported coal at US $ 75/ton

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Both India and China have 2 plus percent of electricity generated by nuclear energy. India produced 13.2 Twh in 2008; China produced 65.3 Twh; Pakistan produced 1.7 Twh. Globally, France has 76% of its electricity produced by nuclear energy and produced 418 TWh in 2008. USA has 20% of its electricity produced by nuclear energy and produced 809 TWh in 2008

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10 Four large scale carbon capture and storage projects are operating in the world each separating One mega ton of Co2 per year from produced natural gas. These are:  Steipner and Snohrit in Norway  Weybarn in Canada  Salah in Algeria Reference 13

Science and Sustainability

Fuel Type and Source

I - Agriculture Residues - Corn Stalks/Stover - Sugarcane biogases - Wheat Straw II - Herbaceous Crops - Switch grass - Other grasses III - Woody Crops - Black locust - Eucalyptus - Hybrid Poplar IV - Forest Residues - Hardwood - Softwood V - Urban Residues - Newspaper - Corrugated cartons - Municipal solid waste

Heating Val ue Higher Lower MJ/Kg

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Cellulose Content*

Percent

17.6 - 18.5 17.3 - 19.4 16.1 - 18.9

16.8 - 18.1 17.7 - 17.9 15.0 - 17.7

84 96 -

18.0 - 19.1 18.2 - 18.6

16.8 - 18.6 16.9 - 17.3

85 -

19.5 - 19.5 19.0 - 19.6 19.0 - 19.7

18.5 18.0 17.7

97

18.6 - 20.7 18.6 - 21.1

17.5 - 20.8

95 89

19.7 - 22.2 17.3 - 18.5 13.1 - 19.9

18.4 - 20.07 17.5 12.0 - 18.6

-

Sources:   

www1.eere.energy.gov/biomass/feedstock www.ecn.nl/phyllis Tillman, David, Wood as an Energy resource, Academic Press, NY, 1978

* Includes Hemi cellulose & Lignin

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Energy Sector Issues Inefficient energy use contributing to high energy requirements. Under current conditions, total Energy Requirement in 2030 projected to triple the level in 2010 Indigenous Energy Supply projected to increase by 20 percent The Energy Deficit as a proportion of energy requirements projected to increase from 25 percent in 2010 to 70 percent in 2030 Energy Sector Issues

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Indigenous Energy Resource Resource

Estimated Potential

Energy Content

Oil

336 Million barrels

45 MTOE

Gas

29 TCF a 900 BTU/SCF

628 MTOE

Coal, Measured

3,303 Million tons

1477 MTOE

Coal, Inferred

56,382 Million tons

25,220 MTOE

Coal, Hypothetical

113, 798 Million tons

50, 903 MTOE

Installed Hydel

-

6595 MW

Potential Hydel

-

40,000 MW

Annual Production of Energy Source 2006-2007 Fuel

Annual Production

Reserves to Production Ratio

Oil

24 Million barrels

14

Gas

1.4 TCF a 700 BTU/SCF 21

Coal (Measured)

4.87 Million tons

678

Hydel Potential Realized

-

16 percent

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Projected Energy Requirement and Energy Deficit (2010 - 2030) Energy Source (MTOE)

2010

2015

2020

2025

2030

Oil Gas LPG Coal Hydel Renewable & Nuclear

4 40 1 2 7 1

3 36 1 3 8 1

1 25 1 4 15 5

1 19 1 6 17 8

1 20 1 8 24 14

Total Indigenous Supply

55

52

51

52

68

Total Energy Requirements

73

96

131

176

238

Energy Deficit

18

44

80

124

170

Projected Energy Requirement (continues)

Projected Energy Requirement and Energy Deficit (2010 - 2030) Imports for the Deficit Energy Source (MTOE) 2010

2015

2020

2025

2030

Oil

14

29

46

64

85

LNG or Gas

-

4

18

34

48

LPG

-

1

2

3

4

Coal

4

10

14

23

33

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Energy Efficiency & the Environment Electricity

Useful Output

Heat; cold Transportation

Efficiency of Conversion, Transmission & Delivery

Not Useful Output

Primary Energy Internal Cost

Currently Waste

External Cost

Causes Harm

Harmless Can have Potential value Messages: Internalize External Cost Increase Conversion Efficiency Retrieve value from current waste (Heat)

Energy Efficiency Country

1990

2006

If 1990=100

KGOE 1 $1,000

GDP Level in 2006 Rank 2 (constant 2005 PPP) Pakistan

240

219

91

7

India

312

211

68

2

China

690

317

46

1

Brazil

130

136

105

8

Canada

280

232

83

5

France

161

143

89

6

Germany

174

131

75

4

UK

157

116

74

3

USA

242

182

75

4

Natural Gas Pipeline Projects Science and Sustainability 36

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Why Worry About The Energy Environment Link Classical Pollutants SO2 ; NOx; PM10; TSP; CO; O3 cause major harm to health, crops, buildings, …

Greenhouse Gases (GHGs) CO2; CH4; N2O; N; S cause global warming; and some harm health, …

TSP, PM10, NOx measured, recently, in Gujranwala, Faisalabad, Quetta, Lahore, and Karachi exceeded WHO standards by 10 to 40 times .

Burden of Disease methods Applied in Pakistan identify premature mortality, morbidity to result from Classical Pollutants – Included polluted water

n n

n

External Cost Variable for Energy and Transport Impact Category

Pollutant/Burden

Effects

Human Health – mortality

PM 10a, SO 2,NO X,O3

Reduction in life expectancy

Human Health – morbidity

PM10, O3, SO 2, PM10, O3 PM10, CO PM10

Respiratory hospital admissions Restricted activity days Congestive heart failure Cerebro-vascular hospital admissions Cases of chronic cough in children Cough in asthmatics Lower respiratory symptoms

O3

Asthma attacks

NOX, , SO2

Yield change for wheat, barley, rye, oats, Potatoes - sugar beet, Yield change for wheat, barley, rye, oats, potatoes, rice, tobacco, sunflower seed Increased need of liming

Crops

O3 Acid deposition

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External Cost Variable for Energy and Transport (continued) Impact Category

Pollutant/Burden Effects

Global Warming

CO2, , CH4, N2O, N, S

Ecosystems

Acid deposition, nitrogen Deposition

World-wide effects on mortality, morbidity, coastal impacts, agriculture, energy demand, and economic impacts due to temperature change and sea level rise Acidity and eutrophication (avoidance cost for reducing areas where critical loads are exceeded)

a) Source: External Costs: Research Results on socio-environmental damage due to electricity and Transport: European Commission Study (2003). The above is a subset of the damages covered in the Study Particulate matter with a diameter of less than 10 microns( one micron equals one millionth of a meter) including secondary particles (sulfate and nitrate aerosols)

Classical pollutants impact on health Top Ten Causes of Premature Mortality & Disability in Pakistan (1990) Rank

Premature Mortality

Disability

1

Diarrhea

Hypertension

2

Lower Respiratory Tract Infection

Eye Disease

3

Tuberculosis

Birth Disease

4

Rheumatic Heart Disease

Congenital Malformation

5

Chronic Liver Disease

Ischemic Heart Disease

6

Congenital Malformation

Adult Female Anemia

7

Birth Diseases

Mental Retardation

8

Ischemic Heart Disease

Chronic Liver Disease

9

Child Septicemia

Diabetes

10

Other Respiratory

Childhood Anemia

Source: Hyder, Adnan; Morrow, R.H; “Applying Burden of Disease Methods in Developing Countries: A case study from Pakistan” American Journal of Public Health August 2000, VOL 90, November 8

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Extern-E (1)

Extern-E (1)

Extern-E (2)

Extern-E (2)

**

*

1.4

-

-

Biomass

Hydro

Photovoltaic

-

-

1.4

1.4

0.4

2.7-5.4

10.9-15

9.5-13.6

0.3

0.8

-

1.4

0.3

1.4-2.8

6.8-10.4

4.1-8.2

France Germany

0.3

-

0.2

0.2

-

1.4-2.8

0.3

-

0.04

4.1-6.8

b

1.4-2.8

-

6.8-10.9

-

Spain

Norway

-

-

0.07

0.4

-

-

-

2.7-5.4

Sweden

0.2

-

-

1.4

0.3

1.4-2.8

4.1-6.8

5.4-9.5

U.K

Sum total of quantifiable externalities: public health; occupational health, Material damage, global warming ** Euro cents converted to US cents by multiplying by 1.36

*

0.15

-

Nuclear

Wind

2.7-4.1

Natural Gas

-

5.4-9.5

Coal & Ignite

Oil

Denmark

Fuel

External Cost for Electricity Production in the European Union for existing technologies US cents/KWh

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6.7 9.1 5.7 6 5.1 5.7

LNG

HSFO ***

Coal-Imported ***

Coal-Thar

Hydel

Nuclear

* ** ***

2.8

5.3

Gas

6

5.3

12.8

12.5

19.5

9.5

8.1

Total Cost

Mukhtar Ahmed: Feeling the future – Page 2, From Table 9 From Table 3 HSFO: High Sulfur Fuel Oil. HSFO price corresponds to US $ 60/barrel of Crude

0.3

0.2

6.8

6.8

10.4

2.8

Median External** Cost

Internal Cost of Electricity Generation * Total

Fuel

Total Cost of Electricity Generation Science and Sustainability 41

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Marginal External Cost of Electricity in Germany in Euro Cent per Kwh COAL

IGNITE

GAS

NUCLEAR PHOTOVOLTAIC WIND

HYDRO

DAMAGE VARIABLE

NOISE

0

0.005

HEALTH

0.73

0.99

0.34

0.17

0.45

0.072

0.051

MATERIAL

0.015

0.02

0.007

0.002

0.012

0.002

0.001

CROPS TOTAL : NON CLIMATE

0

0

0

0.0008

0

0.0007

0.0002

0.75

1.01

0.35

0.17

0.46

0.08

0.05

Marginal Energy (1)

Marginal External Cost of Electricity in Germany in Euro Cent per KWh COAL

IGNITE

GAS

NUCLEAR

PHOTOVOLTAIC

WIND

HYDRO

AVOIDANCE COSTS:TOTAL

1.8

2.78

0.77

0.08

0.37

0.08

0.06

ECOSYSTEMS ***

0.2

0.78

0.04

0.05

0.04

0.04

0.03

GLOBAL WARMING **

1.6

2

0.73

0.03

0.33

0.04

0.03

GRAND TOTAL COST

3.295

4.8

1.467

0.4228

1.292

0.2397

0.1622

RANK OF FUEL

100

146

44

13

39

7

5

DAMAGE VARIABLE

*** Median estimates; current technologies; CO2 emissions are valued with avoidance cost of Euro 19 per ton of Co2 ** Global Warming is valued with a range of damage cost estimates from Euro 18 – 46 per ton of Carbon Dioxide

Marginal Energy (2)

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Sustainable Energy Sources Coal to Liquid and Coal to Gas Carbon capture and Storage Second Generation Bio-fuels Solar Energy Nuclear Energy Wind Energy

Origins of Energy Sources

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Energy Technologies

Consumption of Primary Energy Sources

Time Path

Indigenous Production 43.132 66%

65.01 MTOE Imports 21.878 34%

Total Energy Availability, 2007-08

Natural Gas 29.872 47%

LPG 0.419 1%

Oil 19.206 31%

Nuclear Coal Hydroelectricity 0.735 6.852 5.784 1% 11% 9% Imported Electricity 0.048 0%

62.92 MTOE

Total Primary Energy Supply, 2007-08

In the medium term, Pakistan’s energy imports to rise sharply

Pakistan Primary Energy Supply Science and Sustainability 45

Oil Products 11.529 29%

Natural Gas 15.882 40%

39.41 MTOE

LPG 0.620 2%

Domestic 8.046 20%

39.41 MTOE

Other 0.736 2%

Transportation 11.567 29%

Agriculture 0.804 2%

Total Energy Use, 2007-08 Industry 16.804 43%

Commercial 1.456 4%

Electricity 5.978 15%

Coal 5.405 14%

Total Energy Consumption, 2007-08

Industry, Transportaion and Domestic Sectors Represent 92% of Pakistan’s Energy Consumption

Pakistan Energy Demand Science and Sustainability 46

The evolution of primary energy consumption by the world’s population: In 1973, the total consumption was 253 000 PJ. And in 2004, it was 463 000 PJ [4].

World Consumption of Primary Energy Science and Sustainability 47

14.6%

Biomass/waste approx. 48.100 PJ

65.0%

19.2%

1.2% 12.6 %

31.5 %

13.1

5.7

3.8

0.7

15.4

31.8

10.8 %

Hydro approx. 10.100 PJ

60,626

13,189

1,712

138

10,509

17,187

28.9

49.0

[%]

0.6 %

32.7 %

16.7

34.6

63.7

43.4

12.1

4.0

36.1

2.6

66.1 %

4.0

12.0

1.6

24.4

0.0

3.6

1.4

0.4

Others2)

Geothermal, solar, wind, ocean approx 2.400 PJ

79.4

53.4

34.6

32.2

87.9

92.4

62.4

97.0

Biomass / waste1)

Shares of most important RE of total RE [%] Hydro

45.1 %

Share RE of PEV

Global overview of regional usage of renewable energies (Source; IEA).

1)Without China

China

Developing countries1)

Transitions countries

OECD

463,017

World

45,369 230,610

Transition countries

2) Geothermal, solar, wind, ocean. OECD

20,089

Middle East

3) Latin America without Mexico and Asia without China.

68,100

China

20,327 53,986

12,021

24,535

Africa Latin America3) Asia3)

[PJ]

[PJ]

5,870

RE thereof

PEC

1) Biogenic portion of waste; in the non-OECD countries, a clear distinction between biogenic and non-biogenic waste is not always possible.

Transition countries: countries in the transition from state-directed economy to market economy: under this category, the IEA summarizes countries from non-OECD Europe and the countries of the former USSR.

Worldwide use of Renewable Energies 2004 Science and Sustainability 48

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World Electricity Production by Fuel 2005 Other 2.2% Coal 40.3%

Gas 19.7%

Nuclear 15.2%

Oil 6.6%

Hydro 16%

Coal’s Contribution to Electricity Production Region or Country

Total Electricity Production (TWh)

Electricity from Coal (TWh)

Contribution of Coal (%)

World

18, 307

7,351

40.2

Total OECD

10,459

3,947

37.7

Total non-OECD

7,848

3,404

43.4

OECD North America

5,149

2,293

44.5

European Union

3,311

1,001

30.2

China

2,536

1,996

78.7

Africa

566

251

44.4

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Average Price of Electricity in European Countries

Composition of Crude Oil