The hydropower generation agenda

By Engr Hussain Ahmad Siddiqui
Monday, 16 Mar, 2009

UNDER an agreement signed on February 22, China will provide technical assistance to Pakistan for hydropower projects on the model of the Three Gorges Dam, which is one of the largest hydropower complexes in the world.

Hydropower is globally recognised as a renewable, cheap and reliable resource of energy. It generates electricity with zero emission and produces no waste. There is no requirement of fuel, operating cost is much lower and hydropower plants have longer economic lives than thermal plants.

While installed hydropower capacity remains 6,493 MW, enormous potential exists to exploit this hige indigenous resource of energy. According to estimates, it is economically possible to generate some 34,000 additional MW from hydropower, and 150 sites for projects of cumulative capacity of 20,000 MW have been identified.

Pakistan has total installed power generation capacity of 20,456 MW. However, dependable or de-rated capacity is in the range of 14,000 to 16,000 MW during the year, due to a variety of factors, whereas demand for electricity is increasing at an average annual rate of over eight per cent. Thus, there is gross power shortage at national level, demand being projected to around 22,000 MW by the year 2010.

To meet surging demand, an additional 4,000 MW generating capacity, all based on gas and oil, will be commissioned by December 2010, in both the private and public sector, besides another 325 MW nuclear power plant. In contrast, only 516 MW of hydropower is expected to be added to the system.

In fact, the share of hydroelectric power generation in the overall energy mix is persistently decreasing — from 57 in the1980s to 42 in the1990s to current 32 per cent of the total installed capacity. The good news is that the government plans to increase it to the level of 20,000 MW by 2017. As a result of recent restructuring, the Pakistan Water and Power Development Authority (Wapda), re-named as Water Resources and Power Development Authority, is focusing on implementing multipurpose water projects, including medium and mega hydropower generation projects, either reservoir-based or run-of-the-river type.

In addition to expediting various on-going hydropower projects and rehabilitating/modernising the operational power stations, WAPDA has recently embarked upon a series of new hydropower projects. Hydropower projects of cumulative capacity of 419 MW are scheduled to go on stream during the period 2009-2010. These are Allai Khwar 121 MW, Khan Khwar 72 MW, Duber Khwar 130 MW, all located in Kohistan area, and Jinnah 96 MW to be located on Jinnah Barrage. In addition, NWFP has commissioned Malakand III hydropower project, of 81 MW capacity, which is expected to achieve commercial operation shortly.

There is a long list of the new projects being implemented or to be launched by WAPDA. The Chinese contractors have commenced construction of 47-km long network of tunnels for the 969-MW Neelum-Jhelum hydropower project, whereas tenders for various works of Diamer Basha Dam project, designed for an installed power generation capacity of 4,500 MW, have been invited. Also, Wapda has launched Golen Gol 106-MW hydropower project to be constructed in Chitral. Construction of Kurram Tangi Dam project (hydropower generation of 83 MW) is planned to re-commence soon. Construction of the Akhori Dam project is on cards, having a power generation capacity of 600 MW. Likewise, design and engineering work on Keyal Khwar project of 122 MW capacity has been undertaken.

Feasibility studies related to another eight hydropower projects are in progress being conducted by the consultants appointed by Wapda. These projects, expected to complete by 2017, would have an installed capacity of about 12,000 MW and would require $16.7 billion to construct. It may take two years to finalise studies enabling Wapda to launch the projects

Kohala hydropower project on the Jhelum River in the AJ&K will have a capacity of 1,100 MW, whereas Bunji hydropower project (Gilgit) will generate 5,400 MW on its completion. Dasu of 3,700 MW capacity is a run-of-the-river scheme, 69-km downstream Diamer Basha Dam. Lower Palas Valley of 621 MW and Lower Spat Gah hydropower project of 610 MW are proposed to be located at Patan, Kohistan. The remaining projects are Phander (Gilgit) 80 MW, Basho (Skardu) 28 MW and Lawi (Chitral) 70 MW. In addition, pre-feasibility or initial studies are being conducted for Thakot hydropower of 2,800 MW and Patan of 2,800 MW, both proposed on Indus River, and Harpo of 33 MW near Skardu.

To resolve the p ower crisis in long-term and to sustain economic growth, the optimal development of hydropower is needed. There are however host of risks, constraints and specific issues linked to undertaking hydropower projects. These include geological risks, hydrological constraints, problems in water use, need for infrastructure, environmental issues and social problems. Thus the complexity and long lead-time inhibits private sector to invest in hydropower projects, in spite of various fiscal and non-fiscal incentives..

The fallout of these factors is reflected in the fact that not a single Independent Power Producer (IPPs) has started construction of hydropower project. Out of 41 Letters of Interest (LOIs) issued to the private sector under hydropower Policy 1995, only 13 Letters of Support (LOSs) for a total of 353 MW capacity could be obtained

by the private sector. Among these, only one hydropower project, known as the New Bong Escape of 84 MW capacity downstream Mangla Dam, may materialise eventually, which has yet to achieve financial close,, even after more than a decade of its initiation.

Again, the government has approved another 15 projects of cumulative capacity of over 3,000 MW under Power Policy 2002. Feasibility studies of two projects have been carried out, whereas other project sponsors have asked for extensions in time period as they experienced problem of law and order and other issues to access the site.

In view of constraints faced by the private sector to developing hydropower projects, the government may be well advised to allow necessary funds to Wapda to implement all the hydropower projects, in pipeline as well as proposed, as scheduled.

Foreign financing from international sources like the World Bank, Asian Development Bank (ADB), Islamic Development Bank (IDB), and from countries such as China, Kuwait, Saudi Arabia and Abu Dhabi will be forthcoming for development of these projects.

Wapda has the requisite resources, experience and expertise in the field and the proposed technical cooperation with the Chinese will further augment WAPDA’s capability to construct the hydropower projects in a cost-effective manner. To achieve the desired results, it is important that the Pakistan-China agreement on hydropower generation is implemented on priority basis.

The writer, a former Chairman of State Engineering Corporation, is on the panel of experts of the Private Power and Infrastructure Board, Ministry of Water and Power