Saturday, August 11, 2018

Amount of Variable Renewable Energy (Solar and Wind) that can be connected to the Pakistani Grid System

Amount of Variable Renewable Energy (Solar and Wind) that can be connected to the Pakistani Grid System

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RE (Renewable energy)or VRE ( Variable RE)  interconnection requires that the grid must add reactive loads; both capacitive and inductive loads are required to provide voltage stability in over and under voltage conditions. SVCs or FACT devices are required to provide speedy in time insertion of these inductive loads to prevent voltage and system collapse.  The other factor related to solar is that there is need for a large geographic area, with possibly multiple time zones, so that day light hours are stretched. The wind turbine in itself presents technical problems but by far the greatest matter of concern is the supply variability of both wind and solar , this necessitates that the grid have suitable spinning reserves, flexible base load plants and inductive loads coupled to FACT  or SVC devices to inset reactive load in abnormal conditions .
Pakistan’s grid network has suffered frequent voltage and system collapse during the last 15 years. These have been at times system wide and at times have been restricted of the Southern Network. Quetta-Baluchistan network also suffers for instability and voltage collapse.( SVC has not been installed in Quetta , instead NTDC has proposed to add  220kV Sibi-Mastung-Quetta, Loralai double circuit transmission lines   it is not clear if this will address the instability in Quetta system  NTDC in a submission to NEPRA stated that voltage profile as low as 180kV and 170kV instead of the nominal voltage of 220kV at Sibbi and Quetta Grid stations , respectively. 170 kV represents 0.77 pu. voltage which translates to 0.6 pu. capacitance , SVC would add capacitance in time to avert system   and voltage collapse . NTDC has also decided to include in their investment program, construction of the new 220kV, Guddu-Sibbi single circuit transmission line, for improvement of power supply system in southern areas at a total cost of Rs8.36bn, it does not seem that the steps proposed by NTDC will rectify the deficiency in the transmission system, although these step will mitigate the issue somewhat).  A SVC at Lahore has been installed to maintain the stability of the primary system, another one planned at Quetta has not materialized. The causes of this instability are, many and include in the last 10 years the lack of any spinning reserves and the fact that the system was operated in violation of the frequency requirements set by the Gird code.  Some incidents were caused due to equipment and relaying failures. A fully functional grid system is absolutely necessary for VRE capacity to be connected to a large integrated grid system. VRE addition requires serious upgrades in the grid, establishing communication protocols and deploying control and protection systems that cater to this rise in VRE capacity,
RE presents a challenge in so far as:  properties of wind and solar include the constraints imposed by the weather conditions, VRE plants are smaller in size as compared to conventional generators and connects in a more dispersed manner and VRE uses equipments that connects to the grid using power conventional technologies which are different to conventional generators and therefore present a challenge to grid integration. VRE present less of a challenge in systems where there is a good match between demand and VRE supply, further systems that are perkier and cater to varying supplies over the year are better placed to absorb VRE. Our system with a large hydroelectric supply and large power flows from either the North or South to the Central load centers should have the ability to cater to integration of a reasonable amount of VRE capacity It should also be mentioned that geographic location of a wind plant will affect the benefit it has for the system, at different location wind plants will have widely varying benefits to the system. Additional system costs (other than “normal” interconnection costs) needed to integrate VRE to the grid system adds about US$400/kW to the cost of a typical wind plant, this translates to an additional 1.45 c/kWh to the cost of generation.

GOPA study presents an analysis of the Pakistan Grid with reference to RE interconnection. The conclusions reached are:
1.       2224 MW wind and solar capacity can be added, with the following grid additions: 25 MVAr capacitors at Bhan Saedabad grid station; 120 MVAr Thyristor controlled reactor (TCR) inductive 200 MVAr MSC Capacitive SVC at Lal Suhanra.; Power system stabilizers (PSS) at two synchronous generators at Hub and Jamshoro. ; And operation of some renewable generators in voltage droop control mode would be beneficial.
2.       In the next phase major additional reinforcements are required these would allow the full 4067 (phase I) of renewable generation to be added but it will also facilitate addition totally 9332 MW (including the 4067 MW capacity discussed earlier) of renewable energy to be added. Improvements required are :  Lal Suhanra region requires reinforcement of 220kV system where a new collection substation is to be installed  and two radial 220kV lines are closed to form a ring  This requires addition of 80 km double circuit 220kV transmission lines , 5 km single circuit 220kV transmission line and 5 additional 220/132 kV power transformers including transformer bays . Reinforcements of the Southern wind corridor requires a new 500kV Jhampir grid station , 90 km 220kV and 500kV transmission lines , a 200MVAr capacitor at Jhampir and 100 MVAr shunt capacitors at Gharo are required .  600MVAr SVC (600MVAr TCR and 300MVAr TSC) at Shikarpur are also required.
3.       Spinning reserve requirements will increase to 1500 MW 500MW more than required by the system in 2018, Thus RE will need an additional 500 MW spinning reserves.
4.       Dispatch will, require to: re-execute wind and OV prediction at 1-4 hours ahead; and shorten the dispatch cycle from 30 min to 15 min.
5.       Wind and PV generators need to have provisions for operation in defined conditions. (Modern VRE plants connect to the grid using electronic power converters or inverters; these can be programmed to allow the way in which a VRE power plant behaves on the power grid to be controlled.) 
6.       Addition of specified levels of RE generation results in a higher NPV as compared to the one without RE capacity.
There is consensus on the fact that addition of up to 30% RE capacity is possible with needed inductive loads and SVCs but higher than that capacity will require new approaches on operating and extending grids. Variability of RE due to weather Introduces uncertainty in generation output .These could affect 70% of solar capacity due to cloud cover and 100% of wind capacity due to still days. This requires base load capacity that can follow load to be interconnected, these are costs. To reduce reserves and spinning reserve costs it is recommended that: there needs to be improvement in weather and wind forecast accuracy; forecasts should be for shorter periods than a day
  Features of VRE that pose challenges to grid managers:
1)      Variability: This is the biggest and most vexing  
Power plants that run on fuel (along with some hydro and geothermal plants) can be ramped up and down on command. They are, in the jargon, "dispatch able." But VRE plants produce power only when the wind is blowing or the sun is shining. Grid operators don't control VRE; they accommodate it, which requires some agility. The figure above  shows one week of electricity supply and demand (details and location not particularly important). The green at the bottom is power coming in from wind. The yellow at the top is total demand. The orange in the middle is the gap between the two, the amount that has to be supplied by conventional power plants.
Another way of looking at it: from the perspective of the grid operator, who has control over a set amount of dispatch able power, VRE energy supply is functionally equivalent to reduction in demand — large, rapidly rising and falling fluctuations in demand for dispatch able power.
On the chart above, "shorter peaks" refers to times when conventional plants are supplying the day's "peak load," which is when power is most valuable. VRE reduces or "shaves" the peak, thus screwing with the economics of conventional plants. "Steeper ramps" refers to times when conventional plants have to increase or decrease their output quickly in response to fluctuations in VRE — often more quickly than they are designed or regulated for. And "lower turn-down" means that in times of high VRE supply, conventional plants will have to run at the lowest output they are capable of, i.e., "minimum load." All these effects of variability pose challenges to the rules and economics that govern existing power infrastructure.
2) Uncertainty: The output of VRE plants cannot be predicted with perfect accuracy in day-ahead and day-of forecasts, so grid operators have to keep excess reserve running just in case.
3) Location-specificity: Sun and wind are stronger (and thus more economical) in some places than in others  and not always in places that have the necessary transmission infrastructure to get the power to where it's needed.
4) Non synchronous generation: Conventional generators provide voltage support and frequency control to the grid. VRE generators can too, potentially, but it's an additional capital investment.
5) Low capacity factor: VRE plants only run when sun or wind cooperates. The average capacity factor — production relative to potential — for utility-scale solar PV was around 28 percent; for wind, 34 percent. (By way of comparison, the average capacity factor of   nuclear power was 92 percent; those plants are almost always producing power.) Because of the low capacity factor of VRE, conventional plants are needed to take up the slack, but because of the high output of VRE in peak hours, conventional plants sometimes don't get to run as often as needed to recover costs.
The challenges to integrating high levels of VRE into the grid are technically solvable:
Regional grid integration studies conducted to date have indicated that there is nearly always a technological fix that can be adopted at some cost (e.g., a change in operation or piece of hardware that can be added to the grid). So, simply deploying extremely large amounts of transmission and storage (or some other set of technologies), and modifying the RE generation to maintain system operational parameters could enable 100% penetration of wind and solar. So the VRE carrying capacity of a grid is technically 100 percent, if cost is no issue. But cost tends to be an issue. So NREL posits a difference kind of carrying capacity:
The limit to RE penetration is primarily economic, driven by factors that include transmission availability and operational flexibility, which is the ability of the power grid to balance supply and demand. This limit can be expressed as economic carrying capacity, or the level of variable RE generation at which that generation is no longer economically competitive or desirable to the system or society.
This notion of "economic carrying capacity" clarifies our original question. Technically speaking, we can integrate as much VRE as we want, as long as we're willing to keep spending more money on grid-integration solutions. The question is, at what point is it cheaper, from a total cost-benefit perspective, to resort to low-carbon alternatives to VRE? And wherever that point is, will it still be there when we actually reach it?

Solutions for integrating solar and wind into the grid...
Improved planning and coordination: This is the first step, making sure that VRE is matched up with appropriately flexible dispatch able plants and transmission access so that energy can be shared more fluidly within and between grid regions.
Flexible demand and storage: To some extent, demand can be managed like supply. "Demand response" programs aggregate customers willing to let their load be ramped up and down or shifted in time. The result is equivalent, from the grid operator's perspective, to dispatch able supply. There's a whole range of demand-management tools available and more coming online all the time.
Similarly, energy storage, by absorbing excess VRE at times when it's cheap and sharing it when it's more valuable, can help even out VRE's variable supply. It can even make VRE dispatch able, within limits. (For example, some concentrated solar plants have molten-salt storage, which makes their power available 24 hours a day.)
Flexible conventional generation: Though older coal and nuclear plants are fairly inflexible, with extended shut-down, cool-off, and ramp-up times, lots of newer and retrofitted conventional plants are more nimble — and can be made more so by a combination of technology and improved practices. Grid planners can favor more flexible non-VRE options like natural gas and small-scale combined heat and power (CHP) plants.
Cycling conventional plants up and down more often does come with a cost, but the cost is typically smaller than the fuel savings from increased VRE.
Flexible VRE: New technology enables wind turbines to "provide the full spectrum of balancing services (synthetic inertial control, primary frequency control, and automatic generation control)," and both wind turbines and solar panels can now offer voltage control. 
Interconnected transmission networks:   Wind and solar resources become less variable if aggregated across a broader region. The bigger the geographical area linked up by power lines, the more likely it is that the sun is shining or the wind is blowing somewhere within that area.
Power system planning. Power system planning needs to shift from a conventional methodology where base load, intermediate load and peak load capacity is added to fit the demand curve. A new approach necessitates that capacity be added firstly through VRE sources and then base load, intermediate load and peak load capacity be added, demand shift is also factored into the planning regime.  
Conclusions and Recommendations
Pakistani grid could absorb about 10000 MWs of RE capacity( excluding roof tops, net metering  and isolated grids using  wind or solar) in the next 10 years, but to do that there is need to carry out improvements in the grid system including placing inductive loads that can be switched on by FACT or SVC devices. There is also need to modify the specifications of the wind turbine permitted to be added to the system.  Development of the grid system is the key to enhanced absorption of VRE into the energy mix. Solutions for adding sizeable VRE capacity include: use smart inverters with advanced functionality; mimic synchronous generators; and provide active power, reactive power, voltage, and frequency control.   
 Wind capacity in the Gharo-Jampir wind corridor will depend upon the transmission transfer capacity between the South and North. Wind capacity should also be added in the three other wind zones (In Baluchistan and KP). Solar can and should be added all over the country, perhaps instead of aiming at economy of scale (cost reduction due to size)  more dispersed , smaller plants be installed all over the solar  zone in all Provinces( smaller plants will add to operational issues though, especially under abnormal conditions) ..    

Friday, August 10, 2018

My Dearest Enemy By Javed Rashid


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My Dearest Enemy
By Javed Rashid

My life underwent a drastic upheaval on his arrival. Abu Bakar 's arrival changed my life all together , before his arrival I was the star , life was one great fun . Parents and uncles and grandparents seem to have no other task then to entertain me. My wish was their command. Life was trips to parks, zoos, fun lands and nice foods. There were toys galore, all kind of toys was with me and people seem to have lots of time for me. Those sure were the days. 
My excellent suggestion to my maternal grandfather to leave Abu Bakar at the hospital was sadly ignored. My grandfather wanted to know what we should do with the new baby , and I told him that this tiny little, wining and sleeping thing should be deposited in the garbage can . This excellent suggestion received laughter. Even now this is narrated to all and sundry and never fails to receive lots of laughter; I to this day fail to see the humor in this. Had my grandfather acted on my brilliant advice my life would have been much better than it is now
The first thing that Abu Bakar did was to hog mum's time, she was busy almost the whole day in feeding him or burping home or cleaning him. He seemed very anti social to me , slept most of the times , but got up after a short sleep , drank milk and was dirty so had to be cleaned and then he went back to sleep . He cried a lot , in all this mother had very little time for me , my needs were sadly ignored , when I got up in  the morning there was no body to look after my needs , sometimes that made my cry , but was fully justified of course  . Father and uncles and grandparents also had that much less time for me , they seem to enjoy the silly things that Abu Bakar did ,  his  first smile or non sense baby talk  received  oodles of ooh's and aha's from all , I could not see what was so likable in the disgusting things that the baby did , but grownups are funny have no understanding of what is beautiful and what is gross . I could say whole sentences but this no longer was found so exciting.  
I  increasing got into trouble on account of Abu Bakar, mother and others would  remind  me ' Bilal do not hit your brother he is so little and would be hurt ', I was only practicing my cricket and if my bat accidentally hit him on the head it should not have been such a big deal , instead mother got angry and yelled at me and everyone else was also not please with me . He is so stupid that he cannot evade the ball that I hurl at him and immediately starts to weep when hit, attracting the wrath of my parents and more sanctions. These days I seem to get into trouble all the time, every insignificant scratch that Abu Bakar gets because he is unable to anticipate the path of my cycle or bat or ball results in more punishment for me. People seem to think that I do this deliberately, but it happens and when it does happen it does not seem so bad to me though.

Oddly for all these troubles that he has caused me I get angry when someone else hurts him or calls him names. The  barber who cut my  hair was praising me when he said that Abu Bakar is a sissy little boy , since Abu Bakar ,as was usual with him , was crying at the slightest pretext , I on the other hand did not weep at all , did I did not like and told this barber guy that my little brother was not stupid or sissy , he is just a baby . Someone reminded me that I also wept when I was little, when my hairs were cut, some people have long memories and remember useless details and also do not know when to keep quiet and when to speak. Grownups have no sense of proportion and propriety at all.  
My other problem with Abu Bakar has been that he is never interested in the activities that I am , if I play cricket , he is fond of foot ball , if I like cars he prefers aero planes . Seems he is interested in things that I do not like. Toys that should have been mine are given to him, this I control by not allowing him to play with any toy mine or his , he in any case destroys toys and has no sense of how to use these toys , therefore I keep all these to myself, sometimes I am forced by mother to share these toys so I give him a few of the toys to play but I get these back as soon as mother is off to do something else . 


Thursday, August 9, 2018

Inadequate exploration of oil and gas and Off Shore oil and gas potential of Pakistan -Off Shore Hydrocarbon Potential of Pakistan


 


 Inadequate exploration of oil and gas  and Off Shore oil and gas potential of Pakistan
THE upstream oil and gas exploration sector in Pakistan is significantly off the radar for oil majors. Oil majors are not playing any significant role in the country despite its impressive geology and prospectively. In fact, over the decades,   companies such as Exxon and BP selling off assets and pulling out of Pakistan.
Considering the nature of hydrocarbon exploration, and the mettle of oil and gas executives worldwide, the argument that companies are leaving Pakistan because of the security situation does not make sense, given that oil majors continue to operate in countries like Nigeria (Boko Haram), Iraq (ISIS), Mexico (drug cartels) and central Asian states.
If it were so, one also would not see oil majors making a beeline for frontier oil provinces such as Papua New Guinea and much smaller West African states. Frontier provinces, volatile security and political environments have not tended to deter oil and gas majors from pursuing hydrocarbon reservoirs and riches. However, the bitter truth is that despite amazing geology, Pakistan has pretty much failed to market its upstream sector and is seriously short of both oil and gas while seeking imported oil, natural gas and LNG to satisfy domestic demand.

Key reason for lack of adequate exploration is the fact that half of the natural gas production in Pakistan is undertaken by the two large public sector corporations, OGDCL (Oil & Gas Development Corporation Limited) and PPL (Pakistan Petroleum Limited). These two companies also hold the majority of the exploration leases. Unfortunately, neither OGDCL nor PPL has the project management and technology expertise to rapidly exploit and develop its leases. In this regard, the government should advertise the sale of 26 percent of PPLs equity to an overseas company boasting the management expertise and technological know-how to explore and rapidly develop Pakistans tight and shale gas and oil resources. A strategic investor with 26 percent shareholding in, and management control over, PPL would have the incentive to rapidly increase PPLs hydrocarbon production. PPL is a “compact” company originally owned by the multinational Burmah group of the United Kingdom, and for this reason it is easier to take over in a privatization move. If the divestment experience of PPL is successful, then the government should consider a similar strategic divestment of the larger public sector company, OGDCL,

Exploration Issues
Reasons for decrease in production of oil and gas
1.       Absence if large discoveries
2.       97BCF  average discoveries between 1992 to 2014
3.       Only 12 discoveries of larger than 1 TCF
4.       Crude average 3,4 MMBBL
5.       5 reservoirs of 10 MMBBL or more
6.       Higher finding and developing cost per barrel of oil , these have grown approximately 74% in 2010-14 against 2005-09 due to decline in average discovery size
7.       Concentration of exploration in Potwar and Lower / Middle Sindh. KP and Baluchistan are ignored due to security concerns

8.        inappropriate wellhead pricing structure of indigenous gas
9.       Law and order situation hampering the exploration activities
10.   Shortage of drilling rigs Causing low exploration and development possibilities  and prospect generation,  whereas lack of economies of scale make the international bidder non-competitive
11.   Non-development of dormant gas reserves  because of slow evaluation and appraisal process, litigation , low BTU gas of marginal reserves
12.   Lack of proper monitoring system to review the progress on blocks already awarded for exploration
13.   Highly volatile process if the international market
14.   Inefficient and obsolete refining operation and sub standard oil products
15.   Slow exploration activates in off-shore areas due to high cost , present  off shore density is one well per 1000 sq. km compared to world, average of 9.5 wells per 1000 sq km






Sedimentary basins cover 827, 000km2 including both onshore and offshore, which to date remain under-explored, especially the offshore basins. According to Pakistan Basin Study of 2009, the country has six onshore and two offshore basins; offshore basins being the Indus basin and the Makran basin.  Almost the entire land mass and the offshore areas can possibly have high potential hydrocarbon plays, especially the Abyssal Fan system of the Indus offshore basin.
Abyssal or submarine fan systems constitute underwater structures having huge sedimentary deposition systems over geologic time and are a result of sediment transportation and deposition from continental shelf down on to continental slopes. They are also referred to as turbidity currents and their effects can be amplified through tectonic activity. Abyssal fans are the largest systems through which organic matter, rocks, minerals gets transported from land to sea and possess huge potential for hydrocarbon and gold exploration. Given this context, the Indus offshore basin, primarily a rift basin, is the second largest submarine fan system in the world after the Bay of Bengal and ought to contain various high probability hydrocarbon plays based on analogues. Tthe oil producing Mississippi fan (Gulf of Mexico), Amazon fan (offshore Brazil), Niger fan (offshore West Africa), Congo fan (offshore Angola) among others are prolific producers and analogous to offshore Pakistan being primarily Abyssal or Submarine fan systems, though much smaller in size.
The total recoverable reserves of natural gas as per brochure on Ministry of Petroleum website are given at 53.354TCF (trillion cubic feet), while remaining reserves are stated as 23.18TCF. The Economic Survey 2013-14 and Economic Survey 2014-15 state current gas reserves at 492bn cubic meters translating in to gas reserves of 17.3TCF (excluding shale).
As a contrast, the potential of submarine fan systems can be gauged from the fact that in place resource at the deepwater block in Bengal fan that contains the Dhirubhai discoveries initially stood at 25 TCF, essentially indicating that one find in the largest submarine fan in the world (Bengal) has a resource base greater than all remaining conventional gas reserves of Pakistan. This should get some bells ringing both at regulatory and commercial levels. The potential for hydrocarbon exploration and discoveries in the Indus offshore basin is huge, however, given the huge size of the basin itself, this will require intensive evaluation and commitment of capital. The 12 or so odd wells that have been drilled so far in Indus basin do not do justice to the hydrocarbon potential within this frontier basin. From a technical perspective, we should also be open to encountering high pressure, high temperature formations.
The Makran Offshore basin has a different geology than the Indus with both separated by the Murray ridge. Makran offshore is an oceanic and continental crust subduction zone with deepwater trenches and volcanic activity. The basin comprises oceanic crust and periodic emergence of temporary mud islands along the coast is strong evidence of huge hydrocarbon deposits. These temporary islands may imply improper sealing mechanisms but do ask for exploration laterally and of adjacent areas.
Makran basin is also a frontier basin with negligible exploration activity, though, a few wells have been drilled which encountered high pressure formations and a blowout in 1956. Analogs to Makran offshore include Cook Inlet, Alaska with a billion barrel oil equivalent reserve profile.
Hydrocarbon exploration has always been a high risk venture, however, given the geology that underlies offshore Pakistan, there is reason to believe in the prospectivity of the region. Based on analogous evidence, one can assume that offshore Pakistan is probably sitting on huge hydrocarbon deposits.
In view of the above discussion, and fiscal regime issues, it is imperative that Pakistani NOCs aggressively, and with an entrepreneurial spirit, start exploring for hydrocarbons in the Indus and Makran basins.
The National Oil Companies (NOCs) will have to take the lead and a strategic stake in offshore Pakistan, before any global oil major shows interest, given the particular business dynamics of the region and opening up of Iranian upstream sector to international market.
 LNG IMPORTS AND THE OIL and GAS POTENTAIL OF PAKISTAN
PAKISTAN has emerged on the international scene as a significant importer of liquefied natural gas (LNG). As of 2017, Pakistan was the sixth largest LNG market in Asia with imports of 4.6 million tonnes accounting for 1.6 per cent of global imports. Moreover, Pakistan added one out of five re-gasification terminals commissioned internationally by adding a floating storage re-gasification unit (FSRU) to its supply chain.

The nation has opted for imported LNG to plug energy gaps despite being host to the second largest submarine basin in the world with potentially huge but undiscovered oil and gas reservoirs. It makes sense to gain some perspective on the LNG industry to enable optimised decision-making locally. The details of the off shore potential is discussed above .

 Over the last couple of decades, three main markets for LNG have emerged: Asia Pacific, Europe and North America/Atlantic. Asia Pacific is the largest LNG market with Japan, China and South Korea among the largest importers. Proper commercial structuring, at both export and import stages, is extremely critical and underpins the success of any LNG project over the long term. To put things in perspective, approximate costs of Chevron`s Gorgon project and Inpex`s Ichthys project are $54 billion and $35bn, respectively. Over the years, three basic commercial structures have evolved in LNG trade with hybrids in between.These main structures are integrated, tolling and merchant structures and apply to both liquefaction and re-gasification facilities.

As Pakistan has opted for LNG imports to meet energy shortages exacerbated due to a lack of timely action on our part, it would make sense to see what resource potential Pakistan has in a region that consti-tutes the largest LNG market in the world (73pc global share).

Natural gas constitutes approximately 25pc of global primary energy demand and is growing as the world moves towards cleaner fuels. Moreover, Pakistan has the second largest submarine fan system in the world (Indus basin) with up to 10 kilometers of sediment accumulation. Such accumulations are recognized for huge offshore oil and gas reservoirs worldwide. Pakistan is also blessed with the Makran offshore basin, which is an oceanic and continental crust subduction zone with deep water trenches and volcanic activity. Therefore, we can assume with a high degree of probability that Pakistan potentially has huge offshore oil and gas deposits waiting to be discovered. We are also closer to main LNG markets than Qatar, which happens to be the largest LNG exporter in the world with 27pc market share.

 Perhaps the LNG imports could be stop gap measures and in the breathing sace provided by these imports we put our house in order and attempt o dosciver oil and gas indicated in the off shore potential indicated above.
 However, this is a long-term endeavour, potentially spread over the next 20 years or so, fraught with financial and commercial risks, requiring new thought paradigms and a changed risk perspective. But big oil and gas was never a business for the risk averse. A small first step towards realising this vision could be revisiting the fiscal and regulatory regime for the upstream exploration and production sector in view of changing energy markets.   

NEW OIL AND GAS FINDS AROUND THE CORNER
  ExxonMobil has indicated that it is close to hitting huge oil reserves near the Pak-Iran border, which could be even bigger than the Kuwaiti reserves. Addressing business leaders at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the minister said that ExxonMobil — an American multinational oil and gas company — has so far drilled up to 5,000 meters close to the Iranian border and is optimistic about the oil find.  

1.      Offshore Drilling: Jan., 13, 2019: after a gap of nine years, offshore drilling to find estimated huge oil and gas deposits in ultra-deep waters at an estimated cost of over $100 million begins. The US firm ExxonMobil, in collaboration with Italian firm Eni Pakistan Limited, is drilling in ultra-deep waters some 280 kilometers away from Karachi coast.“Eni Pakistan has estimated nine trillion cubic feet gas deposits ExxonMobil expects oil deposits there.” They are drilling Kekra-1 well in Indus-G block, which is located some 280 kilometers away from the Karachi coast. Pakistan meets around 15-20% of its energy needs through local oil and gas exploration and production, while the rest is met through expensive imports. The oil and gas imports cost Pakistan around one-fourth of the total import bills per year. The country has emerged as one of the largest gas (liquefied natural gas) importers in the last couple of years at the world level. 

Wednesday, July 11, 2018

OBSTACLES TO DEVELOPMENT OF HYDROPOWER IN PAKISTAN





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An assessment of the energy sector in Pakistan reveals that since 2009 the self reliance objective has not been achieved and at the way plans are finalized by 2023 there would be little movement towards achieving the objective of reliance related to indigenous energy. One aspect of this is the failure to increase the share of hydropower in the energy mix.

1.       Share of hydropower in energy and power mix. Energy and power data suggest that hydropower share in total mix has stagnated and this trend is likely to continue to 2023 , in fact in 2023 hydropower share will decrease slightly  compared to 2017 .There are several reasons for this . the last many  hydropower plants added to the system  in the public sector have faced inordinate delays ( Golen Gol, Allai Khwar, Khan Khwar, Nelumn Jhelum , Jinnah, Gomal Dam, Punjab and KP Low heads and Tarbela extension ) have also registered significant  cost escalation .Insufficient studies, mismanaged resettlement and land  acquisition,  , indifferent contract management, and funding woes triggered these delays . The unresolved issue of the (‘profits on hydroelectric power generation ‘) royalty also creates indirect hurdles in development of hydropower. Friction between KP and the centre on this issue has starved KPs hydroelectric power potential to be severely underutilized, in evidence the better utilization of AJ&K hydropower potential as compared to KPs potential (KP hydropower potential is generally more economic to AJ&Ks mainly due to superior geology. Large hydro’s take more than 5 years to complete therefore the government which has a mandate for 5 years is not interested in projects that will complete after its tenure completion. There is very little coordination between Provincial/local governments and Federal governments related to execution of hydropower plants. Land acquisition and resettlement issues are poorly tackled. Preconstruction facilities and infrastructure for construction receives insufficient attention, these all emanate from indifferent feasibility studies that are poorly monitored and controlled. HEPO has been weakened, underfunded and its ability to provide guidance in hydropower issues has been compromised. Capacity building has not received much attention. KP has faced issues with transmission lines, there have been instances where   power plants were ready but transmission lines were not. Rules on who has responsibility to construct lines and methodology of resolving transmission issues are not available. KP has now called for building two 500 kV lines for evacuation of power from Chitral. They neither have the financial capability nor the technical capability to perform this task. Small hydropower plants are having issues with approvals, CPPA now wishes to offer: pay what you take basis for contracting capacity; this is the result of faulty planning. Small plants also have trouble getting approval of DISCOs to connect their plant to the distribution system.



Rectification of Hydropower Share in Total mix

Share of hydropower in energy mix has stagnated; this has impacts upon the self reliance target and also on the share of clean energy in the total energy mix. . To rectify this there is need to take the following steps:

1.                   Provincial inputs in policy and plan formulation. The 18 th. Amendment of the constitution has altered the role of Federal and Provincial Governments with respect to energy in general and hydropower in particular. This needs that the decision making process is amended to cater to this changed constitutional provision. It is suggested that a policy and planning committee on power be constituted with representation from the Provinces. There is also need to periodically refer the policy and plan formulations of this committee to the CCI. Hydropower potential in AJ&K has been utilized in a much better and smoother fashion than that in KP. The primary reason for that is that hydropower falls under the AJ&K Council which has declared that hydropower potential above 50 MWs will be dealt with by PPIB whereas the potential below 50 MWs will be dealt by the AJ&K Hydroelectric Board. KP wishes to deal with all hydropower potential except that on Main Rivers for multipurpose use. KP provincial PPC has also not performed well seems there is a message to KP Government in this statement.

2.                   Preparation and monitoring of feasibility studies. Feasibility studies need inputs from a set of varied technical disciplines, there is need to: monitor and control the development of feasibility studies by an experts panels that is fully empowered; assess risk mitigation and identify the residual risk that needs to be controlled during the construction stage, like tunnel geological risk in the feasibility study.

3.                   Capacity Building. There is currently little attention paid to capacity building in the hydropower sector. ; organization engaged in development of hydropower ( HEPO/WAPDA, PEDO, AJ&K Electricity Board; Provincial Energy departments and organizations , and GB Energy departments) do not have in place a human resource enhancement program related to hydropower . Presently the Centre for Excellence in Water Resources (CoEWR) carries out a MSc. program in hydropower; there is also a hydropower training center in Mangla Dam. It is proposed that: short courses related to various aspects of hydropower (like hydrology, geology, seismicity; economics; mechanical, electrical, mechanical, turbines, financial, resettlement, environmental etc.) should regularly be arranged through the CoEWR and other institutions; funding should be provided to send candidates to the MSc. Course in the CoEWR.

4.                   EPC Contracts.  The organizations involved in hydropower sector development are not familiar with the working of the EPC contracts. There is need to provide capacity building opportunities to professional engaged in contract management of EPC contracts. EPC contracts in the IPP mode also present an issue. Sponsors engage EPC contractors that are very closely related to the main sponsor , the EPPC bidding is not transparent and is questionable, it is proposed that a third part evaluation of cost must be carried out to verify the lowest EPC bid veracity and authenticity ..

5.                   ToRs of Feasibility Studies. ToRs (terms of Reference) of feasibility studies need to be amended to reflect the concerns with identification of preconstruction activities. Delays in completion of hydropower plants partly result due to inadequate provision for pre construction facilities.

6.                   Resettlement and Environmental Issues.-Pakistani agencies have struggled with resettlement land acquisition issues. Land acquisition costs have risen sharply in areas where large infrastructure projects have been or are implemented.

7.                   BASHA, KALABAGH-Construction of Bhasha dam. Kalabagh dam could not be built due to internal political differences and Bhasha dam could not be built because of external factors. We should go on our own. This should be initiated without any further delay. Dasu has been stalled, in any case Dasu would only provide electricity, and water scarcity has become an equally important factor if not the most important factor in our development priority. Construction of Kalabgah Dam could be initiated at the earliest possible as it would be acceptable to both WB and ADB, we however need to achieve consensus amongst ourselves.

8.                   Transmission interconnection-WAPDA has complained that NTDC have not been able to add evacuation lines in time and have sought control over NTDC, this has correctly been disallowed by the government. The issue, however, needs to be resolved. In recent times NTDC have failed to add transmission lines associated with both public and private power plants in time. It is proposed that the penalty that is imposed upon IPPs for completion after due date should have also compensation for NTDC, provided, however, the transmission lines have been completed. WAPDA under construction hydropower plants also need their PPA’s altered to include to include penalty to be paid by WAPDA in case of delayed completion of power plant and a provision in this is to be made for compensation to NRDC for non-utilization of completed transmission lines   and penalty to be paid by NTDC to WAPDA in case of delayed completion of transmission lines associated with the project .


Update : Dasu Hydropower Plant 

The handling of he Dasu Hydrpower plant, which has partial funding for parts of the first phase of the project is a important case  that validates parts of the analysis presented above. There were issues with transmission line voltages but a more crucial and potentially project threatening issue us the resettlement cost , which has been been mishandled. 

Dasu Hydropower Project Jan.,26,2019: A crucial meeting of the Dasu Hydropower Project`s Steering Committee was postponed again for a second time, delaying discussion and finalization of the already tardy land acquisition and compensation to people to be affected by the project under a recent and jointly agreed formula. , the meeting couldn`t be held due to engagements of top officials including the federal minister for water resources and the KP chief minister. special committee was all set to submit its preliminary report to the steering committee in the scheduled meeting on Thursday, but it was postponed again  the report had been prepared after holding a series of meetings with the landowners, local MNAs, MPAs, notables etc. The report,   suggested to the government to accept the landowners/affectees` demand of award of compensation to them according to the formula applied for compensating landowners/affectees of Diamer-Bhasha Dam. the financial impact arising in the wake of accepting the affected people`s demands is approximately three per cent (Rs18 billion or so) of the total project`s cost (over Rs600bn) for two stages of this mega project.


Dasu Hydropower Plant: Indigenous energy: Feb., 17, 2019: The Steering Committee for Dasu Hydropower Project could not take decision over the compensation criterion for land owners after it observed that the special committee did not give any recommendation, leaving the final decision on the part of the government keeping in view the options mentioned in its report   , there are many constructions that were done after enforcement of section-4 of the land acquisition act. Under the law, no constructions can be done after enforcement of this section. But the locals did this just to get more and more compensation. If the government regularise such constructions and award compensation to their owners, it would be illegal.  


Update: Mar., 21, 2019:
Suki Kinari :
  People on Wednesday staged a protest demonstration, demanding market price for the land acquired by the district administration for the 840-megawatt Suki Kinari dam being built under the China-Pakistan Economic Corridor (CPEC).
“The district administration signed an agreement with the families affected by the project that they would be paid the market price for their land but we are still without payments and our houses have been destroyed,” a resident, Sadaqat Ali Shah, told a rally in Kaghan valley on Wednesday.
The Suki Kinari hydropower project, being built on the Kunhar River, is the first energy sector project being executed under CPEC in Khyber Pakhtunkhwa. The protesters, who were raising slogans in support of their demands, said that they would end their protest till they were paid appropriate price of their land. Another resident, Imran Shah, said that people were being expelled forcibly by the administration. “Our houses are being razed and the land is already acquired but we have not received the payment,” he added. He said the district administration had also announced to provide land for the graveyards, which submerged under the dam reservoir, but they were without an alternative land for the cemetery to date.

Dasu :

The Dasu Hydropower Project, funded by the World Bank, now runs the risk of further delays as bureaucratic wrangling has broken out between the Ministry of Water Resources and other members of the steering committee that is empowered to make critical decisions regarding the project.

At issue are the decisions taken by the Project Steering Committee (PSC) in its 14th meeting on acceptance of demands of landowners and affectees on the issue of compensation and land acquisition for the mega 4,300MW hydropower project. The decisions were changed allegedly by the Ministry of Water Resources when the minutes of the meeting were circulated on March 15.

Participants who were present in the meeting tell Dawn that in reality an entirely different discussion took place from the one reflected in the minutes. According to an email sent later by the WB representative to all steering committee members after receipt of the minutes agreed to the proposal of revising the compensation package to Rs36.914 billion and then forward the same to the Executive Committee of the National Economic Council (Ecnec) for approval. `But the decisions outlined in the minutes of the 14th PSC meeting don`t reflect the decisions taken in the meeting. The ministry may have a different view, which it can take, but the minutes of the meeting should reflect what was decided in the meeting,` reads the email which was shared with Dawn by a recipient. `I also request you to follow up so that the minutes be corrected and revised to reflect the decisions of the meeting and not alternative truth,` the email states.

`It is really surprising that the actual decisions taken unanimously by the participants of the meeting presided over by the federal minister for water resources on March 5 were deliberately omitted in the minutes of the meeting prepared and circulated on March 15 among the members of the project steering committee,` he told Dawn. `At the end of the meeting, we even greeted and congratulated each other for resolving the longstanding issue of compensation to the landowners and affectees of land acquisition for the project. But why and how this happened, it is really surprisingly,` the official added, requesting anonymity.

Meanwhile Irfan Ali, who holds charge as secretary water resources, tells Dawn that the omission was necessary because Ecnec was the right forum empowered to approve any changes to the compensation package. `I do agree with you that the steering committee had accorded its recommendation over this package and the same should have been incorporated in the minutes of the meeting` he tells Dawn when asked about the omission. But at the same time, I am of the view that the same proposal must be sent to Ecnec for an objective discussion and approval,` he adds.He also admitted that there should be issuance of an addendum to the minutes of the meeting regarding recommendation of the steering committee on the revised compensation package.

In the meeting, Khyber Pakhtunkhawa`s Senior Member Board of Revenue told the members about affectees` willingness over withdrawal of their demand of change in land category if the earlier negotiated land rates, approved byEcnec in 2015,be escalated at the  rate of 10 per cent (per annum) for all categories (accumulative 40pc for four years 2014 to 2018) and awarding compensation to them for houses /construction and development made on the land after imposition of Section-4 of the Land Revenue Act. He also explained that the land cost that was earlier Rs19.163bn would jump to Rs36.914bn if aforementioned demands of the affectees are accepted.

The minutes circulated af ter the meeting say that PSC member decided to circulate all options to various departments for comments, including Wapda, water division and others.

Mr Ali, however, is not convinced. `It is not a matter of one project alone, as we want transparency in all projects, including Dasu. So the steering committee recommendations will be honoured in this regard, as it is also an important forum, ` he said.



Dasu land acquisition: July, 16, 2019: The federal government on Monday conditionally approved an upward revision of the cost of Dasu hydropower project to Rs511 billion aimed at removing bottlenecks in the land acquisition process that has delayed the construction of 2,160 megawatts power project. The upward revision has primarily been made in the land acquisition component, where the cost is conditionally approved to increase from Rs12 billion to Rs39.6 billion –a jump of Rs27.6 billion or 230   The locals have demanded semi-urban property rates as against approved rural category rates. The Commissioner of the Hazara division had recommended that either the locals’ demands be met or the land may be acquired through use of force. The Ecnec also approved the project for the evacuation of Power from 2,160 MW Dasu hydropower to Islamabad via Mansehra at a revised cost of 90.8 billion. The meeting was informed that the changes in the cost of the project occurred due to changes in the exchange rate. 

.Dasu Progress: Sep., 13, 2019: The World Bank remains moderately satisfactory with progress on $4.1 billion Dasu hydropower project, as Pakistan struggles to end a five-year old dispute over land acquisition that has also put a $100 million tranche at stake, a notch above from the last rating of moderately unsatisfactory. However, it has linked the future ratings with Pakistan’s ability on how quickly it resolves a five-year old dispute over cost of land acquisition for the project. The lingering dispute has also put at stake the over $100 million World Bank loan for land acquisition whose extended deadline is going to expire by end November.The total project cost is $4.1 billion and the World Bank has given $588.4 million loan for its construction, which is nearly 15% of the total cost. It has also extended guarantees to acquire another $460 million loan from commercial banks, which has increased its exposure in the project to $1.1 billion or one-fourth of the total cost.  Out of $588.4 million, the World Bank had given $111 million for land acquisition. Due to almost negligible disbursements, the World Bank gave one-year extension to utilise funds for land in November last year, which is also going to lapse in the next two months. It was the third extension, which this time had been taken by the government of Prime Minister Imran Khan. In its extension report, the World Bank had noted that the continued slow progress of land acquisition is delaying project implementation. Land acquisition has still only reached 740 acres, out of 1,987 acres required for the construction areas, and a total of 9,135 acres including reservoir area needed for the project. The frequent interruption of work by project affectees, delayed payments by the Water and Power Development Authority (Wapda) to revenue staff and to project affectees, lack of control on illegal construction, poor safety management by contractors, consultants and Wapda and delayed decisions by Wapda on procurement and contract management in particular local area development program have contributed to slow progress on land acquisition, according to a World Bank’s report of November last year. The project had been planned to be completed by 2021 – a deadline that both the World Bank and Pakistan will miss. There is no possibility of taking any action against those who are responsible for the delayed completion of the project.