Pakistan is not an efficient energy user, but that is not news. But if you were to put a number on the level of inefficiency that goes through the entire energy chain, what number would you put? A very random check from various industry professionals puts energy inefficiency in the range of 30-40 percent. Thats too high? No.
What if you were to be told that of every 100 units of energy processed, 83 units are considered as energy losses? This is one astonishing number, but sadly true. The recently published extensive research document tilted Integrated Energy Plan 2015-2025 by the Energy Expert Group has revealed this disturbing stat. Of all issues facing the energy chain, inefficiency sits at the top.
"The greatest tragedy however is the fact that we continue to consume energy in a most inefficient fashion. If Pakistan can reduce its inefficient consumption of energy and become a conserver of this increasingly expensive resource, the country can reduce its energy deficit. Energy Efficiency and Conservation are the cheapest energy resources the country has at its disposal," reads an excerpt from the extensively researched bulky document.
The report for the first time in Pakistan presents a comprehensive energy flow diagram, which is considered an important tool for energy policymakers across the globe. It is considered a great tool to identify losses and inefficiencies along the entire chain, and helps to track the routes where the largest energy loss is taking place.
Pakistan's power sector generation loss is around 65.9 percent, which is around 11 percentage points higher than the international benchmark of 55 percent. Similarly, natural gas transmission loss and power sector T&D losses at 12.2 percent and 21.7 percent respectively, are three times the international benchmark. The estimated saving, calculated at crude oil priced at $60/bbl is a massive $2.7 billion per annum, if all losses are brought down to international benchmarks.
The report recommends upgrading all existing simple cycle power plants to combined cycle plants with minimum efficiencies over 50 percent. The Energy Expert Group has also recommended the government to set up minimum efficiency standards to be established for all appliances sold in the market, to keep pace with latest technological advancements.
The report highlights that due to the energy loss, the consumers pay in the form of higher tariffs and industry in the form of production losses and the actual loss to the economy is significantly greater than the ministry acknowledged figure of 4 percent of GDP.
Mind you, the Integrated Energy Plan is the Group's third attempt to highlight issues and recommend solutions. As rightly put in the report, Pakistani people deserve decisive actions and de-politicization of the energy sector. It is about time, the country's energy managers take things seriously and make use of the energy flow diagram.
The report has much more to offer and this column would attempt to periodically share the information nuggets with its readers. Meanwhile, Islamabad would be best advised to have some focus towards energy efficiency, instead of boasting of new megawatts to the grid.