UNCLAS SECTION 01 OF 02 ISLAMABAD 002379

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: ENGY EFIN ECON EINV EAID PK
SUBJECT: GOP ANNOUNCES ENERGY CONSERVATION STRATEGY


1. (SBU) SUMMARY. The Government of Pakistan has drafted an energy
conservation strategy to gain short and long term increases to
Pakistan's national gird. With current energy shortfalls of up to
4500 mega-watts per day, impacting all regions of the country,
Pakistan desperately needs to make changes to spur efficiency.
USAID will launch a USD 30 million/ 3 year program in October 2008
which will assist with implementation of the proposed measures. END
SUMMARY.


2. (SBU) Deputy Chairman of Pakistan's Planning Commission Mr.
Salman Faraqui shared Pakistan's Energy Conservation strategy with
EconOffs. Proposed steps include switching over to energy saver
bulbs, use of solar energy for bill boards and neon signs, reduction
in transmission and distribution losses, converting to daylight
savings time and staggering of the traditional "weekly holiday,"
early closure of commercial establishments at 9:00 PM. Other steps
include implementing energy efficient building codes in 2009 and
implementing efficiency standards for electric appliances. The GOP
proposes to form an "Energy Services Company" to undertake energy
conservation measures in the public and private sectors. The GOP
also proposes to pass an Energy Conservation Act reportedly approved
by the late Benazir Bhutto.


3. (SBU) Efficient Lightbulbs: Hoping to save 500 MW, incandescent
bulbs will be replaced by energy saver bulbs. Pakistan Electric
Power Company (PEPCO) will import 10 million bulbs through
international competitive bidding and distribute the bulbs with
PEPCO meter readers going door to door. The GOP estimates that the
program cost will be recovered from consumers in 6 monthly
installments through increases in electricity bills. The World Bank
will reportedly pay for the initial procurement of the bulbs.


4. (SBU) Domestic Lightbulb Production: Incandescent bulbs will be
phased out over the next 5 years. The GOP plans to ban imports and
withdraw tariff concessions to local manufacturers of the
traditional incandescent bulbs. The import of compact fluorescent
light bulbs (CFL) will be duty free until domestic manufacturing of

high quality CFLs is established. Existing mercury streetlights are
to be replaced by more efficient bulbs.


5. (SBU) Reducing Consumption: Proposals also call for billboards
and neon signs to be converted to solar panels within two years and
will be switched off nightly at 10:00 pm. Banquet halls and
marriage halls will be allowed only minimal electricity, all public
buildings will be without air-conditioning till 11:00 am and all new
construction will be required to use solar water heaters.


6. (SBU) Reducing Losses: The plan proposes to reduce transmission
and distribution losses by dividing the country into 150 zones.
Each zone will be required to publish quarterly figures of
electricity shipped and billed. Zones with less than 10 percent
technical losses will be recognized and rewarded but the other zones
will be placed under "enforcement directorates" for closer
monitoring.


7. (SBU) Daylight Savings Time: To maximize the use of daylight, the
GOP switched to daylight savings time and advanced by one hour on
June 1. In order to level out the power demand over the course of a
typical week, the GOP is proposing to stagger the "weekly holiday"
with shopping center closures recommended on Friday, the traditional
shopping day, rather than Sunday. The GOP plan further proposes
that commercial centers close at 9:00 PM every day.


8. (SBU) Building Codes: Effective January 2009, all commercial and
industrial facilities as well as larger homes must be built
according to a "Building Energy Code" which will include technical
specifications to conserve energy and solar designs. Electric
appliances are also expected to meet minimum efficiency standards
starting in January 2009.


9. (SBU) Energy Audits: The GOP has also proposed the formation of
Energy Saving Companies (ESCOs) to conduct energy audits of public
and private sector installations. The ESCOs will charge a
percentage of the savings as their fee. The GOP also proposes to
pass an Energy Conservation Act to provide legal backing to the
conservation measures.


10. (SBU) Comment: The Energy Conservation and Energy Efficiency
component of USAID's USD 30 million/3 year Pakistan Energy
Development Program (PEDP) will provide technical support and
project assistance to support and further refine the Planning
Commission's strategy. The USG currently favors interventions that

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address rationing, ESCOs, grid losses, and public information
campaigns but the final program areas will be determined by PEDP
based on their estimation of the amount of energy conserved and
coordination with other donors. USG support for these measures will
begin in October 2008. End Comment.

PATTERSON