fueling the future - Woodrow Wilson International Center for Scholars

Meeting Pakistan’s Energy Needsunits operating on imported natural gas.The Low Gas Case represents the scenario where imported gas is notavailable, and the deficit has to be made up with the least costly fuelin absence of natural gas. In this case, the country will have to importLNG to meet the established demand for natural gas in the residential,commercial, fertilizer, and industry sectors, and generation capacity inthe power sector that can operate only on natural gas. The gap in powergeneration capacity, filled by imported gas in the Base Case, was assumedto be filled by capacity based on imported coal, which is the lowestcost option in absence of the CCGT option.The High Thar Case represents the option of enhanced utilizationof Thar coal to replace imported coal in the Low Gas Case. The LowHydel Case represents the case under which the risks associated with developmentof hydel capacity, such as the negative outcome of feasibilitystudies or higher than expected resettlement costs, come into play. Thehydel capacity additions were reduced by 30 percent for this case, to bereplaced by the next economic option, which is imported coal. In theHigh Nuclear Case, installed nuclear capacity was increased from 4,400MW in the Base Case to 7,200 MW, assuming a 100 percent increase incapacity additions by 2015, and 200 percent by 2025. Finally, the EnergyConservation scenario assumes a conservative penetration rate for energyefficient technologies and demand side management, resulting ina reduction in demand of about 9 percent across the economy. Exhibit10 summarizes the energy demand and the power generation capacityrequired in each of the above scenarios.The economic cost of imported fuels under the Base Case is illustratedin Exhibit 11. Fuel imports under the base are projected to increasefrom the current level of $7.5 billion to $38.2 billion in 2025,with oil accounting for 65 percent of the energy imports, followed bygas at 30 percent.Additional cost of fuel imports under each of the scenarios studied isillustrated in Exhibit 12. Annual additional cost of imported fuels forthe Low Gas Case is estimated at $0.8 billion in 2015, increasing to $3.2billion in 2025, and represents the additional cost of energy imports incase the country is unable to import gas through pipelines.Comparable figures for the Low Hydel Case are $1.2 billion in 2015 and$4.1 billion in 2025, and for the High Nuclear Case are $0.6 billion in 2015| 29 |