Energy Institute

1. Energy Institute Naveed Arshad LUMS Energy Institute Syed Babar Ali School of Science and Engineering Lahore University of Management Sciences

2. Vision The vision of LUMS Energy Institute is to help the power sector in Pakistan with adoption of advanced technologies for short, medium and long term sustainable electricity provisioning for all.

3. Mission The mission of the LUMS Energy Institute is to carry out interdisciplinary research, development and capacity building in power and energy planning, renewable energy technologies, and grid modernization.

4. Role of Centers and Institutes at LUMS EE Bio CS Econ Maths Chem Phys HSS LUMS Energy Institute Water Informatics and Technology Center MAGSHSS SAHSOL SOE SDSB SBASSE

5. LUMS Energy Institute

6. Need for the Energy Institute • Absence of Generation Expansion Plan/Integrated Energy Plan • Created Demand and Supply disparity • Shortfall of generation capacity from 2006-2017 upto 7,000 MW • Surplus generation capacity from 2018-2025 to the tune of 9,300 MW • Sub-Optimal Generation Development (High CAPEX, mostly base load generation on imported fuel, and locations) • Low share of Renewables (only 32% renewable, mostly hydro) is not sustainable • Foreseeable Problems of Power Sector • Idle capacity and energy payments as well as forced load shedding on high loss feeders • Inadequate Transmission and Distribution Infrastructure (new technologies, volume of work) • Governance issues with Distribution system management and operation (circular debt) • Lack of capacity and capability in the available human resources • Disintegrated Power Sector • Conflicted, duplicated and orphaned roles and responsibilities of various stakeholders like NEPRA, WAPDA, NTDC, AEDB, PPIB, PEPCO, CPPA-G, NEECA/PEECA, DISCOs, Federal and Provincial Governments • Oblivion to new technologies including renewable energy and smart grids • Right structuring of power sector is a absolute must

7. Energy Institute Focus Power Sector • Current Yearly Financial Volume: Rs 1800 Billion • Expected2025 Financial Volume: Rs 3000+ Billion • Current R&D Spending: Zero • Current High-Tech Local Manufacturing: Almost Zero

8. Investment Requirements:Generation and Transmission Development (2015-2025) About $65 Billion CAPEX in Power Sector (2015 2025): A Serious Undertaking! Typical Unit Costs: Generation: $ 0.8 - 4 million / MW Over 90% imported material 2000 MVA 500 kV Substation: $ 100 million 750 MVA 220 kV Substation $ 40 million Over 90% imported material 500 kV Transmission Line: $ 0.5 million / km 220 kV Transmission Line: $ 0.3 million / km Over 65% imported material 4000 MW ±660 kV HVDC ML Line: $1.6 Billion G G L L G L Generation CAPEX: $50 Billion T & D CAPEX: $15 Billion

9. Energy Institute Goals • Power and Energy Planning • Adoption of Sustainable and Renewable Energy Technologies • Grid Modernization, Energy Markets and Data Analytics • Capacity Development

10. Goals (1) Power and Energy Planning • Integrated Resource Planning / Integrated System Planning • Policies and regulation support and advice • Demand forecasting (long, medium and short term) • Study new sources of demand including CPEC, young population, electric vehicles etc. • Implications on water, food and environment • Energy economics and business models

11. Goals (2) Adoption of Sustainable and Renewable Energy Technologies • Optimal use of new renewable generation technologies in the power sector • Grid integration studies and renewable energy production forecasting • Capacity expansion and unit commitment models • Role of storage and its technology assessment • Renewable generation siting and microgrids for rural electrification. • Disruptive technologies for the future of renewable power

12. Goals (3) Grid Modernization, Energy Markets and Data Analytics • PMUs, Sensors, Smart Meters, IoTs … • Data analytics for better observability, predictability, controllability etc. • Energy Markets for Pakistan • Right Structuring of Pakistan Power Sector • Asset management and health monitoring

13. Goals (4) Capacity Development • Human Resource Development of the power sector • Professional Development Program (PDP) – New Hires • Advanced Development Program (ADP) – Senior Engineers • Energy systems and software development • Use of data analytics in evidence based decision making • Triple helix linkages between government, industry and academia

14. Hallmark of Research@LUMS Energy Institute • Blue Sky Research • Impactful Research Spanning 1-50 Years • Research from a Vintage Point • Concept to Commercialization • Making Pakistan a leader not follower

15. Strategic Initiatives Immediate to Three Years Impact

17. Economic Spiral of Death for the Electric Utility • Disruptions in the Power Sector • Solar and Renewable Energy • Distributed generation • Net-Metering • Energy Storage • Grid Defection • Smart Grids • Demand-side Management • New Pricing Models • Electric Vehicles • Electricity Markets • Carbon Trading

18. 1 – Competitive Electricity Markets • Partnered with CPPA-G to develop capacity building of Competitive Electricity Markets in Pakistan • MoU with CPPA include • Capacity Building of the Power Sector • Housing of Demand and Supply Analysis Tools • WASP, Plexos, EnergyPlan • Demand Forecasting Tool for NPCC Operations in collaboration with CPPA • R&D of software and data analytics necessary for market development

19. 2 - Energy Demand and Supply Scenarios • Pakistan Energy Crises • 2006-2017 – Generation Undercapacity • 2018-2025 – Generation Overcapacity • Modelling of Demand and Supply Scenarios for Pakistan • 2019 • System Capacity – 200 TWh • System Utilization – 128 TWh • Capacity Payments: PKR 854 Billions • Idle Capacity Payments: PKR 45 Billions (Plants with less than 5% Capacity Factor) • 2025 • System Capacity – 293 TWh (With all new projects in pipeline) • System Utilization – 202 TWh • Capacity Payments – PKR 1800 Billions (without currency fluctuations) • Idle Capacity Payments: PKR 140 Billions (without currency fluctuations) Total Funding of HEC PKR 46 Billions

20. Pakistan’s Power Profile June 2016 – March 2019 Base Load is about 8,000 MW

21. Notes: 1. Trimmu 800 MW (2xGTs) will be available for dispatch in June-19 but was excluded from capability calculations in June-19 since the CoD of the plant is Nov-19 Data Source: NTDC, PPIB, AEDB, PPDB, Etc.. 2. Realistic demand assumes 2000 MW, 1500 MW, 1000 MW, 500 MW forced load shedding (high loss feeders) in 2019, 2020, 2021, 2022 respectively.

22. Demand Curtailment by Distribution Companies

23. Electricity Demand and Supply 00 06 12 18 24 Energy Institute

24. Power Profile with Seasonal Variations (Daily) Mar-May Oct-Nov 14200 12750 9750 12050 00 06 12 18 24 00 06 12 18 24 Dec-Feb Jun-Sep 17375 11800 11800 8550 7550 15600 00 06 12 18 24 00 06 12 18 24 00 06 12 18 24

25. Monthly Peaks for Capacity and Energy are represented by the base line at X-axis

26. Volume of Capacity and Energy Payments 2019 - 2025

27. Causes of Circular Debt • Theft • Non-payments • Late payments • Subsidies • Technical losses • Tariff Differentials • Late Tariff Notifications • ______________ Energy Institute

28. New Member of Circular Debt Family Idle Capacity Payments Rs. 1800 Billions? 2024-25 Capacity payment to be paid to electricity generation plants 2018-19 2017-18 2016-17 Total Generation Capability 293 TWh Total Generation Capability 200 TWh Actual Expected Generation 202 TWh Actual Expected Generation 128 TWh Idle Capacity Payment PKR 140 Billion Idle Capacity Payment PKR 45 Billion

29. 3 - Electric Vehicles Policy Recommendations • Comprehensive Study on Introducing Electric Vehicles in Pakistan • Cars, Two/Three Wheelers, Trucks, Buses • Direct Implications on the • Power Sector • Oil Import Bill • Environment • Investment • Working with Ministries od Industry, and Climate Change to roll out National Electric Vehicles Policy

30. Sustainability and Impact Model

31. 4 – Other Notable Initiatives • Automated Metering Infrastructure Design and Analysis with Power Information Technology Company and USAid – MoU to be signed on 24th July, 2019 • Movement towards regulatory allowance of Off-grid Electrification through DC Microgrids with NEPRA • Li-ion Battery Development as replacement for conventional Lead-Acid batteries with 10X advantage for UPS and other storage requirements • Variable Frequency Drive for Air-Conditioners and Legacy Appliances • Completion of 800 kWpRooftop Solar at LUMS and helping other Govt. organizations and Universities towards rooftop solar initiatives • Participation with Planning Commission for developing Integrated Energy Plan (IEP) • Electric Utility Model for the Smart Grid • New business model for utilities to handle upcoming disruptive innovations

32. Strategic Research Endeavors Impact Beyond Three Years

33. Research Endeavors • Spatiotemporal Energy Forecasting Planning • Deeply Intelligent Distribution System • Soft Load shedding • Grid free living and Energy Arbitrage using Small-Scale Batteries with decentralized PV generation • Green Economic Dispatch • Solar PV Duck Curve • 2050/100 - Renewable Energy Plan for Pakistan • Emissions Free Transportation in Pakistan’s North • Policy update for net-metering

34. Local Partners Current Active Power Sector Partners • CPPA-G • Power Information Technology Company (PITC) • MEPCO • K-Electric • Ministry of Climate Change (Federal) Potential Partners • NEPRA • Ministry of Energy (Federal and Provincial) • NTDC / AEDB / PPIB / NEECA/ PEECA • PEPCO, WAPDA, Planning Commission • IPPs / Renewable Energy Companies / Entities of the Private Sector • Other notable entities including universities