Industrial Energy Consumption Pattern

By Islam, Mazharul | Economic Review, July 1994 | Go to article overview

Industrial Energy Consumption Pattern


Islam, Mazharul, Economic Review


Energy is vital to all sphere of economic activity and industry is only one of these spheres. There are many different forms of energy, oil, gas, coal, nuclear power, hydro power and a large number of new and renewable sources of energy. Energy sector behaviour encompasses all phases of activity ranging from the extraction, conversion, transport and consumption of energy to the disposal of energy wastes. These activities in turn, have many significant impacts on both the economy and the environment.

It is well known that the energy capacity could lead to various economic problems such as inflation, foreign exchange, squeezes, increasing developing country debt and even production disruptions. The environmental impact of energy-sector activity are equally serious. Environmental problems such as acid rain, the greenhouse effect, thermal pollution and the general degradation of the quality of air, water and land are exacerbated by excessive energy use.

In industry share of total energy consumption and the identification of the energy - intensity of various manufacturing branches within the industrial sector could make possible on assessment of the extent to which the industrial sector as a whole, as well as individual manufacturing industries, expect to contribute to environmental problems through industrial energy consumption. At the same time it may suggest ways of alleviating environmental burdens, for instance, through the promotion of energy efficiency and conservation.

Energy shortage in Pakistan has held up the economic growth very much comparing to other developing countries which have now gained in manufacturing sector in line with developed economy only due to the energy satisfactorily used with required demand, whereas the development of energy resources in Pakistan tended to lag behind the growth in demand. The gap had reached a high level by the end of fifth five year plan. Since the sixth five year plan, this sector has been accorded high priority and allocated the highest share in public sector development programme. Over last two plan period public sector expenditure remained deficient for energy development thus moved the private sector particularly foreign investors have been attracted to invest in exploration and development of energy resources. This policy of increased involvement of private sector is now being pursued with increasing vigour.

At present our generation capacity is 7050 MW is quite insufficient causing power load-shedding has adversely affected the manufacturing sector and the pace of industrialization. The financial constraint has been a major factor in implementing electricity generation expansion plans. In order to overcome the financial constraint electricity production has been declared an industry, and the private sector has been inducted to build power plants by giving them fiscal incentives through tax holiday, duty free import of electrical plant and machinery. At present a private owned power generation of 1,292 MW is under construction at Hub. This project is expected to start power generation by April 1997, with cost of about Rs. 54 billion and would be completed with the financial assistance of the World Bank and other private investors. After completion and installation of the plant it will start generating 1,292 MW of electricity which would be transmitted for distribution to subscribers. The major sponsors for this oil fed generating plant are National Power International, UK, Zenel Industries of Saudi Arabia and the World Bank. This project will provide employment to about 2500 skilled and unskilled people. It is hoped that with completion of this project our industries requirements for energy will be met to the very extent, though future energy requirements is estimated to will be at least beyond 15,050 MW for Household, Agriculture, Industry, Communication and Mineral Sectors etc.

According to Census of electricity undertaking conducted by FBS average growth of electric energy recorded during last 10 years in installed capacity on Pakistan basis was 446 MW, electricity generation and consumption were 2339 min KWh and 1,764 KWh respectively. …

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