Pakistan Power Report Q4 2009

Pakistan Power Report Q4 2009

The new Pakistan Power Report forecasts Pakistan will account for 1.25% of Asia Pacific regional power
generation by 2013, with a stable theoretical generation surplus before the country’s substantial
transmission losses are taken into account. BMI’s Asia Pacific power generation assumption for 2008 is
7,116 terawatt hours (TWh), representing an increase of 3.2% over the previous year. We are forecasting
an increase in regional generation to 9,149TWh by 2013, representing a rise of 28.6%.
Thermal power generation in 2008 totalled an estimated 5,590TWh, accounting for 78.6% of the total
electricity supplied in the Asia Pacific region. Our forecast for 2013 is 7,046TWh, implying 26.0%
growth that reduces the market share of thermal generation to 77.0%. This is thanks largely to
environmental concerns promoting renewable sources, hydro-electricity and nuclear generation.
Pakistan’s thermal generation in 2008 was 64.6TWh, or 1.16% of the regional total. By 2013, the country
is expected to account for 1.06% of thermal generation.
For Pakistan, gas is the dominant fuel, in 2008 accounting for 50.8% of primary energy demand (PED),
followed by oil at 29.0%, hydro-electric energy at 9.5% and coal with a 10.0% share. Regional energy
demand is forecast to reach 4,862mn tonnes of oil equivalent (toe) by 2013, representing 25.1% growth
from the 2008 level. Pakistan’s 2008 market share of 1.71% is set to ease to 1.53% by 2013. The
country’s 1.9TWh of nuclear demand in 2008 is forecast to reach 4.5TWh by 2013, with its share of the
Asia Pacific nuclear market rising from 0.36% to 0.69% over the period.
Pakistan is now ranked 11th behind Hong Kong in BMI’s enlarged and updated Power Business
Environment rating, thanks to its relatively high level of renewables (mostly hydro) generation and
healthy power consumption/energy demand growth prospects. Several country risk factors offset the
industry strength, but the country is in a good position to keep clear of South Korea below and should
eventually mount a challenge on HK’s position above it.
BMI forecasts Pakistan real GDP growth averaging 3.04% a year between 2009 and 2013, with the 2009
estimate at 2.00%. The population is expected to expand from 160.9mn to 175.8mn, with GDP per capita
increasing by 18% and electricity consumption per capita remaining unchanged. Power consumption is
expected to increase from an estimated 72.9TWh in 2008 to 79.6TWh by the end of the forecast period,
which provides a relatively stable theoretical generation surplus (before transmission losses, etc.),
assuming 2.6% annual growth in electricity generation.
Between 2008 and 2018, we are forecasting an increase in Pakistani electricity generation of 55.9%,
which is mid-range for the Asia Pacific region. This equates to 29.7% in the 2013-2018 period, up from
20.2% in 2008-2013. PED growth is set to increase from 11.6% in 2008-2013 to 26.4%, representing
41.1% for the entire forecast period. An increase of 54% in hydro-power use during 2008-2018 is a key
element of generation growth. Thermal power generation is forecast to rise by 46% between 2008 and
2018, with nuclear usage up 426% from a low base. More details of the long-term BMI power forecasts
can be found at the end of this report.

Executive Summary ....5
SWOT Analysis............7
Pakistan Power Business Environment SWOT.... 7
Pakistan Political SWOT ... 8
Pakistan Economic SWOT . 9
Industry Overview .....10
Global........... 10
Table: Global Summary, 2006-2013... 10
Asia Pacific Region.......... 11
Table: Asia Pacific Power Generation, 2006-2013 (TWh) .. 12
Table: Asia Pacific Thermal Power Generation, 2006-2013 (TWh) ... 13
Table: Asia Pacific Primary Energy Demand, 2006-2013 (mn toe).... 14
Table: Asia Pacific Gas Consumption, 2006-2013 (bcm) .... 15
Table: Asia Pacific Coal Consumption, 2006-2013 (mn toe)............. 16
Table: Asia Pacific Nuclear Energy Consumption, 2006-2013 (TWh) 17
Pakistan Market Overview...........18
Primary Energy Demand . 18
Power Generation............ 18
Power Consumption......... 20
Regulation And Competition.......... 20
Pricing.......... 21
Power Transmission ........ 22
Business Environment ..23
Asia Pacific Power Business Environment Ratings......... 23
Table: Asia Pacific Power Business Environment Ratings .. 23
Pakistan Power Rating .... 24
Limits To Potential Returns ........... 24
Risks To Realisation Of Returns .... 25
Legal Framework............. 25
Infrastructure 27
Labour Force 28
Foreign Investment Policy ............. 29
Tax Regime ... 30
Security Risk . 31
Industry Forecast Scenario ..........33
Pakistan Power Outlook .. 33
Generation.... 33
Gas-Fired ..... 34
Oil-Fired....... 35
Coal-Fired .... 35
Nuclear Energy.. 35
Hydro-Electric ... 36
Renewable Energy ........... 38
Power Costs.. 39
Transmission. 39
Table: Pakistan’s Power Sector, 2006-2013..... 40
Table: Pakistan’s Thermal Power Sector, 2006-2013..... 41
Table: Pakistan’s Non-Thermal Power Sector, 2006-2013.. 42
Table: Pakistan Power Costs, 2006-2013 (US$mn, unless otherwise stated) ... 42
Assumptions And Methodology...... 43
Key Risks To BMI’s Forecast Scenario............. 43
Long-Term Power Outlook ............ 43
Macroeconomic Outlook.. 43
Table: Pakistan – Economic Activity, 2006-2013 ........... 46
Power Outlook: Long-Term Forecasts......47
Global Snapshot. 47
Table: Global Summary, 2011-2018... 47
Regional Outlook............. 47
Table: Asia Pacific Electricity Generation, 2011-2018 (TWh) ........... 48
Table: Asia Pacific Primary Energy Demand, 2011-2018 (mn toe).... 49
Table: Asia Pacific Thermal Power Generation, 2011-2018 (TWh) ... 50
Table: Asia Pacific Hydro-Electric Generation, 2011-2018 (TWh).... 51
Table: Asia Pacific Nuclear Generation, 2011-2018 (TWh) 52
Pakistan Country Overview ........... 52
Methodology And Risks To Forecasts. 52
Competitive Landscape.54
WAPDA ........ 54
Karachi Electric Supply Corporation (KESC) .. 55
Country Snapshot: Pakistan Demographic Data ........56
Section 1: Population....... 56
Table: Demographic Indicators, 2005-2030..... 56
Table: Rural/Urban Breakdown, 2005-2030 .... 57
Section 2: Education And Healthcare. 57
Table: Education, 2002-2005 ........ 57
Table: Vital Statistics, 2005-2030.. 57
Table: Employment Indicators, 2001-2006....... 58
Section 3: Labour Market And Spending Power ............. 59
Table: Consumer Expenditure, 2000-2012 (US$) ........... 59
Table: Average Annual Manufacturing Wages, 2000-2012 . 59
BMI Methodology ......60
How We Generate Our Industry Forecasts ....... 60
Power Industry .. 60
Cross Checks 61
Sources ......... 61