Interview with Muhammad Farooq Afzal — President/CEO ITN Group of Companies
[box type=”shadow” align=”” class=”” width=””]Profile:
Muhammad Farooq Afzal is a dynamic and a profound professional in the realm of Textiles, Information Technology, Business Consultancy, Tourism, and Event Management. He has been pursuing his entrepreneurial ambitions for last 21 years, locally & internationally. He has been playing an instrumental role in promoting trade and business ties between Pakistan and other countries since 2004. Farooq had been continuously putting in his multifaceted efforts towards the cause of promotion of bilateral and multilateral trade. Mr. Farooq has also been participating in TV talk shows regularly to speak about the economy, promotion of bilateral and multilateral trade based on the business opportunities lying in respective countries. Mr. Farooq holds a Master’s degree in Business Management from Philippines and Bachelor’s degree in Commerce from University of Sindh, Pakistan. He is also a Doctor of Homeopathic Medicine. He is Founder President of Pakistan Turkey Business Forum and President/CEO of ITN Group of Companies.[/box]
PAGE: What is the reason that Pakistan has in essence not been able to exploit alternative sources of energy?
Muhammad Farooq Afzal: Though different efforts have been made to address the roadblocks which renewable energy technologies (RETs) face, the development has not been completely viable due to social, technological, economical, and informational hindrances. These concerns are the prime deterrents in the development of renewables. At the same time, due to lack of visionary and sincere political leadership in the country we could not go into alternative sources of energy. Our corrupt and incompetent bureaucracy and political leadership always safeguarded vested interests of the external sources as they are paid for the same. The potential capacity is fairly distributed among the different provinces. Sindh is endowed with wind potential in the South, Balochistan is rich with solar potential in the West, and Khyber Pakhtunkhwa is rich with hydro in the northeast area. Therefore, existing potential of renewable can be explored in four distant regions for power generation, water/space heating, engine fuel, and stand-alone power systems (SAPS).
Environmental friendly, renewable energy is always affordable and cheaper than oil and it will never run out. The power demand of Pakistan is projected to increase up to 11,000MW by the year 2030. Therefore, a more holistic approach is needed to fully utilize the renewable energy potential to achieve a sustainable energy future of the country. A sincere and determined political will is the key to energy independence.
PAGE: The world is concerned about the global warming. Would it be a prudent step in Pakistan to shift power generation from oil to coal?
Muhammad Farooq Afzal: First we need to understand that Metallurgical (coking) coal is a key ingredient in steelmaking. Coal converted to coke is used to produce around 70% of the world’s steel. Coal is also widely used in the production of other metals including aluminum and copper. Coal is used as a key energy source in cement production. There are six largest coal-producing countries in the world i.e. China 3.7 billion tons, India 783 million tons, United States 640 million tons, Indonesia 616 million tons, Australia 550 million tons and Russia 430 million tons whereas Pakistan holds 3,377 million tons (MMst) of proven coal reserves in Sindh, Punjab and Balochistan and ranking 20th in the world.
Pakistan’s coal is of better quality with low ash and sulphur content. Petroleum, or crude oil, is harder to find and is typically a bit cleaner-burning — and, unlike coal, it can be pumped through pipelines and easily refined into fuels like gasoline or kerosene. Natural gas is also relatively inexpensive and less polluting than coal or crude oil. At the same time, the world’s largest coal-producing countries have delivered a resource to global markets that has powered industrialization, through thermal electricity generation and as an ingredient for manufacturing processes like steelmaking. While climate concerns and efforts to decarbonize the global energy system have diminished coal’s stature in recent years, it nevertheless remains the biggest source of the world’s electricity generation – accounting for 38% of the overall share in 2019, according to the International Energy Agency (IEA).
Coal production has risen year-on-year since 2016, and global coal reserves have been measured at more than one trillion tons. Reading the headlines, it would be easy to conclude that coal is dead. The International Energy Agency (IEA) estimates the most polluting fossil fuel to be responsible for nearly one-third of global warming, and it is now struggling to attract financing and compete with cheaper alternatives. Keeping in view the future development, Pakistan is currently facing a serious energy crisis and I think that Pakistan must use its coal reservoir to use it as an alternate and much cheaper way to produce the energy resulting fulfilling our future requirements especially after the establishment of special economic zones. We must not go for oil-based energy, which is much expensive than coal, wind, solar and hydro. We can also follow the same parameters to control the pollution as being used by the rest of the industrialized countries.
PAGE: What is your perspective about the local and foreign investing in power generation?
Muhammad Farooq Afzal: I believe that Pakistan has now become the best and lucrative place for the local and foreign investors to invest in the power generation. CPEC has put Pakistan among the top ranking countries in the world where investors will have better returns for longer time.
Pakistan must ban on oil-based power generation plants and should make a policy only to encourage investments in coal, solar and wind based projects. These projects must be in all the provinces near by the special economic zones. However, it is still a challenge due to some impediments such as law and order situation, absence of infrastructure and inadequate grid integration ability. Therefore, it is necessary to address such issues on priority basis.
PAGE: What are the major hitches in energy production and distribution confronting Pakistan?
Muhammad Farooq Afzal: Pakistan is suffering badly from energy shortages. The indigenous energy sources are poor, and the country is heavily dependent on the import of fossil fuels from abroad. Economic growth requires adequate energy supplies. Electricity in Pakistan is generated, transmitted, distributed, and retail supplied by two vertically integrated public sector companies, Water and Power Development Authority (WAPDA) for all of Pakistan (except Karachi), and the Karachi Electric (K-Electric) for the city of Karachi and its surrounding areas.
Pakistan’s energy mix is formed of 64% fossil fuels, 27% hydropower and 9% other renewable and nuclear power. While Pakistan has strong potential for producing renewable energy it is still far behind much of the world in developing these sources. Currently there are 81 different power plants with installed capacity 24,857MW of electricity and some more power generating projects are in consideration in future to increase electricity production in the country. In Pakistan, government owned distribution companies DISCOs and system operator NTDC are functioning as distribution and transmission monopolies respectively, while government owned generation companies (GENCOs) are competing with private power producers to supply electricity in the system.
In order to avoid line losses and theft of the power from the main lines to whole country, government must decentralize the power generation and distribution to the provinces and so that performance of each can be evaluated. Distribution of the power should also be given to the private sector and there should be many distribution companies, which will create a healthy competition for the service among all distribution companies. At the moment, it’s on WAPDA and K- Electric and both failed terribly to serve the nation more precisely.