Private sector’s role in energy
 

[B]THE energy crisis, now into its sixth year, continues to intensify. The ultimate responsibility for the energy crisis rests with the policymaking circles because they are in the driving seat. [/B]

Nevertheless, the crisis also speaks volumes for the unsatisfactory performance of other segments of society including energy departments, the private sector and academia.

The private sector has an immensely important role to play in the progress of a country. Across the world, the energy sector receives a strong boost from the private sector whose contribution comes in many forms including the development of energy projects and power plants, technical advancement through research and development, financial investment and active think tanks. Good examples can also be cited from South Asia.

The Grameen Shakti, for example, is the world’s largest and fastest-growing micro-generation renewable energy programme developed by the private sector in Bangladesh. This and other private-sector programmes with micro-credit based business models are now collectively installing over 25,000 solar home systems, 1,000 biogas systems and 10,000 improved cooking stoves in Bangladesh on a monthly basis. Micro-renewable programmes are also being effectively run by the private sector in India, Nepal and Sri Lanka.

Another significant example is that of the Suzlon wind turbine manufacturing company. Suzlon was established in India by a textile businessman in 1997. By the end of 2009, with its presence in 23 countries and a staff pool of 23,000 workers, the company was ranked third in the world in terms of wind turbine equipment suppliers.

Contrary to these trends, in Pakistan the private sector has fallen well short of playing its due role. There is no doubt that over the last couple of decades, the private sector has played an important role in the progress of the energy sector especially in terms of setting up new power plants. However, despite this contribution, its performance, by and large, has not been enviable, and its current projects hardly give the impression of sustainability and value engineering in the national interest.

The harsh reality is that the crooked and counterproductive rental power projects and other dodgy ones in the oil and gas sector do not leave a very positive impression about the role of the private sector in addressing the country’s energy problems. In the wake of the energy challenges that Pakistan faces, the private sector needs to play a much broader and proactive role.

The private sector is in dire need of capacity building. Although there have been some success stories and examples of world-class projects, the overall outlook of the industrial base of the country is very unsatisfactory. Local industry does not have any expertise in the area of energy technologies whatsoever. It has traditionally fallen short of making any noteworthy technical/engineering contribution towards tackling the country’s energy problems. It does not know how to produce energy systems’ key components, i.e. turbines, engines, generators and other electronic and control gadgets.

The situation regarding secondary components such as boilers, compressors and heat exchangers is not enviable either. An eye-opening example in this respect was noted when having experienced difficulties with import, Dr Samar Mubarakmand was left with no choice but to seek a compressor for the Thar coal project from the junk market. Ironically, the industrial sector of Pakistan does not appear to have the capability to produce a compressor for him. The industrial sector is the largest
consumer of energy in the country. It accounts for nearly 42 per cent of the total national primary energy consumption (excluding the power sector). Industry is, however, incompetent when it comes to energy efficiency — the amount of energy required to undertake a certain task is much higher than that required in a developed country for the same purpose.

In terms of wasteful consumption of energy, the state of affairs in the small- to medium-scale factories of Gujranwala and large industrial units of Karachi and Lahore is similar. Manufacturers of home appliances and surgical instruments are as energy-inefficient as textile and sugar mills. Cement and heavy metal industries are as unproductive in the consumption of energy as chemical and automobile industries.Evidence suggests that through energy conservation and management measures industry can save up to 50 per cent of the energy it otherwise consumes. The practice would not only help lessen the burden on the national grid but would also bring financial gain for the industry and help it remain competitive in an increasingly difficult market.

In order to be well-positioned to tap upcoming business opportunities in the field of energy, local industry would have to overcome its complacency. Industry should also establish an appropriate level of in-house research and development base so that the pertinent expertise is readily available, also because in many instances foreign technology must be indigenised to suit local conditions. When going for new projects, where possible emphasis should be placed on technology transfer. Reverse engineering or reproduction is another avenue that can be pursued because it provides economic solutions with ease.

It is also crucial for the private sector to set up energy think tanks so that they formulate robust solutions for themselves and also influence government policies. It is in the interest of the private sector itself to rise to the occasion by playing a proactive role in the challenge of overcoming the country’s energy problems.

The writer is a lecturer at the Glasgow Caledonian University, UK and the author of Energy Crisis in Pakistan: Origins, Challenges and Sustainable Solutions.

[email]dr.m.asif@gmail.com[/email]


6th September 2011
By M. Asif