The Role of Nuclear Energy in Pakistan's Energy Crisis and its Strategic Implications - Part 1 of 2

Ramya P. S., Junior Research Fellow, International Strategic and Security Studies Programme, National Institute of Advanced Studies (NIAS), Bangalore.

The burning issue under which Nawaz Sharif ran his election campaign last year was Pakistan’s economic debt and its acute energy shortage. The energy crisis gripping the nation has not only resulted in long hours of power shortages and load shedding but has adversely impacted the economy with commercial sectors and industries facing the brunt of the energy crunch. The fertilizer industry for instance has faced setbacks due to the irregularity in the supply of gas, leading to imports of fertilizer when in reality Pakistan has the capacity to produce the same.[i]

The crisis has caused a major setback to the economy with concerns being raised due to the increase of the circular debt. Significantly, debt is being incurred as a result of theft and power losses. The circular debt has reached over Rs.300 billion and several transformers such as in Lahore have defaulted adding to the Government’s woes.[ii]

However, this internal crisis of Pakistan is taking a significant strategic turn. In August, it was reported that China may help Pakistan to operationalise a 1 GW nuclear power reactor at Karachi.[iii] This raises concerns in India because the nuclear cooperation between China and Pakistan has been strengthening with the addition of reactors to both the Chashma and Karachi nuclear plants. Therefore, the questions to be asked are: how far is Pakistan going to promote its civilian nuclear industry in the light of an energy crisis and more significantly, how far would such a policy impact the regional security dynamics?

Energy Shortage and Nawaz Sharif’s Policy

Owing to the circular debt and intensive load shedding Pakistan is now placed in a precarious situation on the energy front. Pakistan is highly dependent on thermal power which contributes to around 67 per cent of electricity generation. It gets electricity from hydel (30 per cent) and around 3 per cent from nuclear power.[iv] High dependence on thermal power has led to an increase in prices and made it dependent on international oil prices, which are prone to volatile price fluctuations.

Presently, the energy shortage has touched nearly 6,000 MW in April 2014 leading to load shedding for over 12 to 18 hours.[v] Fuel shortages, delays in subsidy payment by the Government and the lack of private players and investments have led to such a severe shortage. Although, Pakistan has hydropower potential (both tapped and untapped), which is cheaper than thermal power, it remains poor in power generation because of the capital intensive nature of constructing dams. Furthermore, poor policies have increased the shortage.

The policies implemented by successive governments in Pakistan have proved ineffective as they do not address the core concerns of enhancing efficiency of existing power generation units, a lack of institutional arrangements and implementation of policies without proper assessment has contributed to the existing shortage. For instance, the policy to shift from oil to natural gas without properly assessing the reserves of natural gas has led to increased reliance on oil for thermal power generation, increasing the prices per unit.

However, the new energy policy outlined by the Sharif Government has goals set across a three-year period and focuses on the principles of efficiency, competition and sustainability. It aims at reducing supply-demand gap to 0 from 4500-5000 MW per day by 2017, slashing the generation cost of each unit to 10c/ unit from 12c/unit by 2017, lowering distribution and transmission costs by 16 per cent etc.[vi] This policy like the energy policy of 1994 seeks to meet the goals by encouraging local and foreign investments. The need for investments in this sector is high and the Government has sought to reduce subsidies to increase foreign investment and decrease the likelihood of circular debt occurring again.

Nuclear Energy and Sino-Pakistan Nexus

In this scenario of energy shortages and heightened need to invigorate the economy of Pakistan, the Government has been looking to expand its options to generate power from different sectors. One option has been, to emphasise the civilian nuclear sector of Pakistan. This came to light with the Sharif Government signing an agreement with China to finance a nuclear power project in Karachi worth 9.59 billion dollars and is said to produce about 2,200 MW.[vii] More recently, the alleged operationalization of a 1 GW nuclear reactor is increasing India’s concerns. This deal is unique in many ways as such a reactor comes under the ambit of new technology and the growing cooperation between the two nations in this sector. Moreover, such a deal would have immense strategic ramifications because it has been reported that diversion of nuclear waste from such a large reactor for re-processing would be easier since the protocols followed for standard reactors are not applicable to the 1 GW reactor.[iii]

Cooperation between China and Pakistan in the nuclear sector has been deep, with the former being responsible for constructing the Chashma Nuclear Plant which consists of CHASNUPP 1 and 2. Moreover, the construction of a third plant CHASNUPP-3 began in 2011 and that of CHASNUPP-4 is set to begin soon. Significantly, for the first time China has agreed to export the new pressurised water reactor (PWR), ACP 1000. This has raised international concerns due to proliferation threats. Although, some analysts believe that Pakistan would refrain from diverting plutonium towards for it nuclear weapons programme as it would jeopardise its ongoing cooperation with China. Furthermore, Pakistan maintains separate military nuclear reactors at Khushab complex in Punjab which requires plutonium rather than the PWR being provided by China.[viii]  However, proliferation concerns persist because the spent fuel from Kushab is reprocessed at separation plants in Chashma and Nilore which remain outside the purview of IAEA safeguards.

These deals with China by the Pakistani Government are seen in the light of the Indo-US civil nuclear deal of 2005, following which Pakistan has sought a similar deal for itself without success. When news of these deals came to light concerns were raised regarding proliferation by the international community, owing to Pakistan’s previous track record on the matter. The US has debated the nature of this deal at the Nuclear Suppliers Group (NSG). Although, the Chashma plant comes under the IAEA safeguards Pakistan is not signatory to the Non-Proliferation Treaty (NPT) and the full-scope safeguards by the IAEA are not applicable to it. Therefore, according to the NSG guidelines members of the international community have maintained that China cannot transfer the technology to Pakistan. However, China sees the deal as a ‘grandfathered’ extension of the previous deals it signed with Pakistan prior to becoming a member of the NSG.

The financing by China of the nuclear power projects within Pakistan depicts how China is trying to develop and mature its nuclear sector with Pakistan being its loyal client. China is also involved heavily in supplying nuclear components to the US, Britain and also has struck nuclear deals with Australia and Canada, depicting the scope of China’s nuclear industry.[ix] Concerns regarding proliferation have become pronounced following the expansion of the Karachi plant (two more nuclear power plants) under the current Government. This has also led to fear among the domestic public as it may threaten their livelihood. West of Paradise Point where the reactors are to be constructed lays the village Abdul Rehman Goth, wherein the fishermen are being restricted from entering the water close to the construction site.[x]

Disclaimer: The views expressed in this article are personal.

[i]Shabbir H. Kazmi, “Pakistan’s Energy Crisis”, The Diplomat, August 31, 2013, http://thediplomat.com/2013/08/pakistans-energy-crisis/1/, (accessed on June 2, 2014).

[ii] Zafar Bhutta, “Power Crisis: Khawaja Asif Looks Heavenward”, The Tribune, July 15, 2014, http://tribune.com.pk/story/735805/power-crisis-khawaja-asif-looks-heavenward/, (accessed on July 15, 2014).

[iii] MadhavNalapat, “China Gifts Pak Mega Nuclear Power Plants”, The Sunday Guardian, August 2, 2014, http://www.sunday-guardian.com/news/china-gifts-pak-mega-nuclear-power-plants, (accessed on August 3, 2014).

[iv] Mirza Hamid Hasan, “An Overview of Pakistan’s Energy Sector: Policy Perspective”, in Solutions for Energy Crisis in Pakistan, (IPIR: Islamabad, 2013), http://ipripak.org/books/secp.pdf, (accessed on June 7, 2014).

[v] Ahmad Fraz Khan, “Power Shortage Leads to 12-18 hours of Loadshedding”, Dawn, April 11, 2014, http://www.dawn.com/news/1099086, (June 14, 2014).

[vi] “National Power Policy: 2013”, Government of Pakistan, 2013, http://www.ppib.gov.pk/National%20Power%20Policy%202013.pdf, (accessed on June 25, 2014).

[vii] Salman Masood and Chris Buckley, “Pakistan Breaks Ground on Nuclear Plant Project with China”, The New York Times, November 26, 2013, http://www.nytimes.com/2013/11/27/world/asia/pakistan-breaks-ground-on-nuclear-power-plant-project-with-china.html?_r=0, (accessed on June 18, 2014).

[viii] Mark Hibbs, “Power Loop: China Provides Nuclear Reactors to Pakistan”, Jane’s Intelligence Review, (IHS: USA, 2014), http://carnegieendowment.org/email/DC_Comms/img/JIR1401%20F3%20ChinaPak.pdf, (accessed on August 28, 2014).

[ix] Hasan Ehtisham, “China has Safe Grasp on Pakistan’s Civilian Nuclear Market”, The Global Times, February 25, 2014, http://www.globaltimes.cn/content/844615.shtml, (accessed on June 18, 2014).

[x] Shadi Khan Saif, “Fears Raised over Pakistan’s Nuclear Dreams”, Deutsche Welle, July 2, 2014, http://www.dw.de/fears-raised-over-pakistans-nuclear-dreams/a-17507182, (accessed on July 9, 2014).

Safety and Security Concerns Regarding Pakistan’s Nuclear Energy Policy

Safety concerns with regard to the expansion of the Chashma plant came to light soon after the Fukushima incident in Japan, especially in the light of supposed faulty design of the plant modelled after Qinshan I. Moreover, China over the years has improved the design of Qinshan I and approached other countries to construct new nuclear reactors within China rather than building more of the same type.[i] This has further raised concerns as to how safe the design of Chashma nuclear plant is in reality. The expansion of the civilian nuclear sector in Pakistan has made India uneasy especially taking into account the lack of safety associated with the Chashma plant which is geographically close to India’s Punjab. A nuclear disaster in this case would not only impact Pakistan but the impact on India would be equally dangerous.

Concerns in terms of the overall safety of the nuclear plants and a possible leakage from the Chashma plant as reported in the case of the KANUPP plant therefore still linger. Such a scenario could lead to groundwater contamination in Punjab, which forms the agricultural hub of Pakistan and could cause major problems for India’s neighbouring states. Moreover, many studies have shown that several districts within Punjab have highly contaminated ground water consisting of arsenic and fluoride in over 18 districts.[ii] Although this contamination is not related to any nuclear related leakage, the possibility of such a disaster exists. Such concerns are fuelled by the lack of data released by the PAEC on the geological and geophysical surveys around the Chashma site. In fact, certain reports suggest that the US NCR (National Regulatory Commission) guidelines have not been met during the construction of the plant in the case of an earthquake.[iii] Moreover, when the plant was constructed, China’s lack of experience in the field intensifies safety concerns.

The issue of security has become crucial especially with KANUPP facility which came into operation in 1972, outliving its shelf-life. The ageing plant was given a ten year extension and raised alarms when an emergency was declared following a radiation leak. In the 1990s as well, radioactive cooling water reportedly leaked but the accident was downplayed by the Pakistani Government. The Pakistan Atomic Energy Commission (PAEC) Chairperson Ansar Pervaiz maintained that the Karachi plant was safe in the case of a nuclear disaster and ‘can remain unaffected in every season’.[iv] He further cited the Chashma plant as an example to depict the safety of Pakistan’s nuclear plants. Also, a US study conducted in 2014 on worldwide security of nuclear material ranked Pakistan 22 out of 25 countries and stated it as ‘most improved’ country out of nine nuclear armed states at safeguarding nuclear materials.[v]

Although, the strategic nature of Sino-Pakistan cooperation on civilian nuclear power is stark, Pakistan for its part maintains that nuclear power is crucial to resolving its existing energy crisis. PAEC Chairperson pointed out that renewable energy sources were only ‘appetisers’[vi] to solve the energy shortage and increase the need for nuclear power. From 2000 to 2012 Pakistan’s nuclear sector saw an annual growth of 15.7 per cent on the grid installed capacity.[vii] The PAEC claims it seeks to augment the nuclear energy output to 8,800 MW by 2030 while, the current nuclear power output is only 750 MW of the total energy output. Therefore, nuclear power is being seen as a viable option to solving Pakistan’s existing energy crisis, although roadblocks exist in terms of funding, the lack of indigenously developed industry and imposition of external sanctions and embargoes.

Conclusion

Nuclear power is not the only solution to the steep energy shortage facing Pakistan. Alternatives in the form of hydropower, solar and wind exist. Pakistan reportedly has a hydropower potential of 100,000 MW. Significantly, in Punjab alone the current Chief Minister Shahbaz Sharif has launched several energy and welfare projects with Chinese assistance. Coal-based power projects are under construction in Sahiwal and Nadipur each set to produce about 660 MW and 100 MW respectively.[viii] The Dongfang Electric Corporation of China is involved in the construction of the Nandipur project. Furthermore, Pakistan’s first solar power plant, namely Quaid-e-Azam solar power project at Bahawalpur was inaugurated this year having about 400,000 solar panels.[ix] Interestingly, it is a joint venture between the state government of Punjab and China and is forecasted to produce about 1000 MW of electricity. Pakistan has also been considering the pipeline option seriously. The long talked about Iran-Pakistan pipeline and TAPI pipeline are also being looked into. Under the previous Zardari Government, Pakistan pushed for the pipeline with Iran ignoring the US pressure against such a deal.

The close cooperation between China and Pakistan depicts how the Sharif Government is seeking to resolve its energy problem through the strategic prism. The role of nuclear power in resolving Pakistan’s energy crisis remains debatable, but Pakistan is viewing it as a feasible option. The larger strategic role of the growing nuclear sector in Pakistan casts shadow over the viability of such an option, especially with growing concerns of the safety of such facilities. Although, the need for alternative forms of energy is crucial for Pakistan, its increasing civilian nuclear cooperation with China proves worrisome for India. The Chashma plant, which comes under only partial safeguards of the IAEA, is seen more as a case of proliferation under the existing control regimes of the NSG.

The expansion of the civilian nuclear sector as a solution has been advocated both by the previous Zardari Government when the KANUUP deal was discussed with China and became a reality under the present Sharif Government. This depicts how the nuclear option to solving energy crisis is accepted in Pakistan across the political spectrum. Therefore, with both KANUUP and CHASNUUP being funded by China, India’s fears taking into account the strategic nature of such cooperation between its neighbours would rise. The lack of international safeguards, debates regarding the feasibility of the reactor designs coupled with proliferation worries with regard to Pakistan’s civilian nuclear programme are not expected to abate in the foreseeable future.

Disclaimer: The views expressed in this article are personal.

[i] S. Chandrasekharan, “Chashma Nuclear Power Plant: CHASNUPP will Continue to be Accident Prone”, South Asia Analysis Group, no. 295, August 16, 2001, http://www.southasiaanalysis.org/paper295, (accessed on July 29, 2014).

[ii] M. IrshadRamay, Tameez Ahmad, Oleg V. Shipin, David Jezeph and A. Kadushkin, “Arsenic Contamination of Groundwater and its Mitigation in the Province of Punjab (Pakistan)”, World Health Organisation,http://www.who.int/household_water/resources/Ramay.pdf, (accessed on July 20, 2014).

[iii] Zia Mian and A.H. Nayyar, “Pakistan’s Chashma Nuclear Power Plant: A Preliminary Study of Some Safety Issues and Estimates of the Consequences of a Severe Accident”,Princeton Environmental Institute, no. 321, December 1999, https://www.princeton.edu/pei/energy/publications/reports/No.321.pdf, (accessed on July 20, 2014).

[iv] “Nuclear Safety: Radiation Leak from K-2, K-3 nuclear plants a far cry, explain experts”, The Tribune, February 17, 2014, http://tribune.com.pk/story/672625/nuclear-safety-radiation-leak-from-k-2-k-3-nuclear-plants-a-far-cry-explain-experts/, (accessed on June 7, 2014).

[v] Talha Ahmed, “2014 Report: Pakistan ‘most improved’ in nuclear security, India not so”, The Tribune, January 11, 2014, http://tribune.com.pk/story/657377/2014-report-pakistan-most-improved-in-nuclear-security-beats-india/, (accessed June 2, 2014).

[vi] “Nuclear Safety: Radiation Leak from K-2, K-3 nuclear plants a far cry, explain experts”, The Tribune.

[vii] Syed Shaukat and AfiaNoureen, “Nuclear Power Generation: Challenges and Prospects”, in Solutions for Energy Crisis in Pakistan, (IPIR: Islamabad, 2013), http://ipripak.org/books/secp.pdf, (accessed on June 7, 2014).

[viii] Imaduddin, “Shahbaz Sharif for Early Completion of Energy and Welfare Projects”, Business Recorder, May 25, 2014, http://www.brecorder.com/pakistan/politics-a-policy/174304-shahbaz-sharif-for-early-completion-of-energy-welfare-projects.html, (accessed on June 8, 2014).

[ix] Meena Menon, “Pakistan’s First Solar Power Project Launched”, The Hindu, May 9, 2014, http://www.thehindu.com/news/international/south-asia/pakistans-first-solar-power-project-launched/article5993633.ece, (accessed on July 9, 2014).