Rolling out the Red Carpet

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Monday, October 20, 2008

WAPDA & New Technologies

We are dependent on technology as never before, and technology is crucial to electricity as never before. The economy as a whole will now and forevermore be dependent on a power infrastructure that is virtually 100 percent reliable.

WAPDA’s Vision 2025 is a public document. It creates an impression for WAPDA as a farsighted organization. This fantasy is nonetheless blurred with its absolute disregard for technological environment enveloping 2025. The future trends demonstrate that WAPDA is planning investments in obsolete technology.

It looks as if WAPDA has conceived Vision 2025 based on demand built on demographic trends and completely turning its back on up and coming technologies. With enormous novel technologies coming up, mind agitates to ask: will dams in 2025 be relevant to external environment? After demonstrating a laggard response to IT, we seem to be still resisting innovation with all our might. Then multi-billion dollar mega-projects planned by WAPDA will cause cost over-runs, and inflationary risks coming from unanticipated changes in regulations, financial markets, and enthusiasm.

If WAPDA wants to stimulate the economy in a way that have both a short-term and long-term positive impacts, if it wants to give a gift that will keep on giving, it can do no better than to stimulate on-site, decentralized electricity generation. Technologies are now available that can transform households and businesses and office buildings into electricity producers. A national effort to introduce these technologies will make our energy system more efficient.

A stimulus package to literally bring power to the people will spur the installation of millions of small power plants. They will generate the electricity we will need to meet future demand. They will also dramatically improve the environment, reduce our dependence on mega dams and create large number of well-paid jobs. The manufacture of small power plants generates more jobs than the manufacture of large power plants.

Banks are no longer taking underwriting positions with large risk exposure in mega-projects conceived with archaic technologies. Foreign lenders have retreated from the market, leading to as much as a 40 percent reduction in credit capacity. Those that finance future power projects will rightly sharpen their focus on the organizations employed to protect and manage projects' inherent performance and schedule risks.

Hence there has to be a flight to cheaper and innovative technologies allowing lenders to be highly selective, with approval reserved for not large capital extensive but cost efficient projects.

We need a long-term solution. The good news is that the price spikes and power disruptions have crystallized the need for power generation with new technologies promising solutions to transmission losses, high cost, and frequently interrupted supply.

Many new technologies are promising cost efficiency, environment affability, and capability for meeting ever increasing demands. Nuclear power, for example, provides some hope. Natural gas can also help but doesn’t provide the answer. The depletion of gas reserves is going to occur soon. And as supply declines, rates are expected to increase. Price hikes make natural gas too volatile to be used in power generation. WAPDA will pass along these increasing costs to customers, as this is a routine matter for public sector utility providers. For our industry, this often means suspended production and lost earnings. This will not only have a serious impact on us, but on the entire Pakistan economy.

That leaves us to think about alternative energies like wind and solar power. These are fine for niche applications. But for a national policy, we need to depend on something that’s more abundant and that’s inexpensive.

Coal gasification is a clean coal technology and is an option. It’s the cleanest coal technology you can use. It has, for example, inherently low air emissions – the lowest sulfur dioxide, nitrogen oxide, and particulate matter emissions of all coal-based technologies for generating power. Gasification also offers the opportunity to capture carbon dioxide, and to do it for significantly less cost than other fossil fuel-based technologies.

In addition to gasification being cleaner than these competing coal technologies, it’s also competitive in cost. And, as environmental issues become more and more stringent, gasification’s cost advantage grows even greater.

No other renewable energy based electricity producing technology has attained the same level of maturity as wind power. There are no major technical barriers to large-scale penetration of wind power. India has now gained sufficient technical and operational experience, and is now on the threshold of taking off in wind power. It offers a viable option in the energy supply mix, particularly in the context of the present constraints on conventional sources. It also offers an attractive investment option to the private sector for generation.

The emerging technology that will significantly alter the entire infrastructure of power generation in the world, while using underutilized high-energy fuel sources including those derived from waste is nanotechnology.

The 1990s was all about E-everything, the next decade will be all about N-everything.

Nanotechnology is starting to make solar-energy cells cheaper and more efficient. The next challenge is to figure out how to store the electricity produced for later use. On a sunny day, an area just a few paces on a side would generate a kilowatt of electrical power. With good batteries (and enough repaved roads and solar-cell roofing), present demands for electrical power could be met with no coal burning, no oil imports, no nuclear power, no hydroelectric dams, and no land taken over for solar power generation plants.

Appreciation of the value of technological change is well entrenched in modern society. However, a powerful barrier is still in place. Government, industry, and the general populace fail to support some technologies because they threaten an established source of wealth and/or power. The generation of electricity in Pakistan is a good example. (