November 3, 2003	Monday	Ramazan 7, 1424

Substantial shortfall in power production against the targets for the Ten-Year Perspective Plan ending 2011 may result in load-shedding on a large scale, although the official say that will be avoided to the extent possible.

As a result of the apparently inevitable shortfall as things stand today, the annual energy generation growth (AEGG) rate has been scaled down from 5.3 to 4.6 per cent to be realistic.

The principal reason for the shortfall, which many lead to load shedding from the year 2005, is that no significant hydel project, except Ghazi Barotha with its capacity of 1,450 mw, is scheduled to begin production before 2005.

The ten-year target was to raise the power output to 26,750 MW while the expected demand was 20,920 mw. The revised target is expected to bring down the capacity to 24,685 mw, while the demand will be scaled down to 17,719 MW till the year 2011.

Power generation till 2005-6 given in the ten-year plan has also been scaled downwards from 20,923 mw against the scaled-down demand of 15,145 mw to 19,852 mw while the demand has been fixed at 13,842 mw.

The officials explain that despite the large gap between the supply and reduced demand load management will become a problem as after providing for break-down and other interruptions there has to be a surplus in supply of at least 1000 mw. They talk of the need for various reserves, including the spinning reserve, maintenance reserve, forced outages, down-ward fluctuation in hydro and thermal units, and seasonal decrease in hydel power as the water level in the rivers go down. Altogether the loss may be 30 per cent of the output or 6,000 mw.

The annual energy growth rate until 2005-06 has also been revised downwards from 6.2 to 3.2 per cent.

The demand for power would have been far more if a number of industries, office complexes, and even educational institutions had not resorted to their own power production through large generators.

Cement plans are now being forced to move to coal, as done in India much earlier. Office complexes like the forum and the coming Atrium Mall are having their own power production units. Even the College of Business Management at Korangi with its various outfits is totally dependent on its own power. They find power obtained through their own generators both economic and reliable. And they need dependable power to feed their IT systems.

Meanwhile the 12 production and distribution system of Wapda, and the KESC are to be privatised. The IMF and the World Bank are goading the Pakistan government to do that as quickly as possible to reduce their heavy power loss rate and large financial losses which drain the fiscal resources of the government.

Meanwhile, the KESC is finalising arrangements with the HUB power company to obtain power direct from it instead of via Wapda. The problem is the power rate to be paid by the KESC.The KESC now pays a far lower rate to Wapda than it would to Hubco if it gets the power direct from the private sector power agency. The rate is under negotiation now.

While the loss and theft rate of Wapda is 25 per cent, the KESC’s theft and loss rate is 40 per cent. In fact, both the rates are said to be far higher by the aid agencies.

Meanwhile the National Assembly is anxious to have full fledged debate on the state of Wapda, particularly its over-billing and heavy power loss. In fact, the two are inter-linked. Although the demand for the debate has come from the ruling coalition, the government has not agreed to that, particularly the demand for reduction of the power rate. The government argues the power rates are fixed by the National Electric Power Regulatory Authority (Nepra) which is an autonomous body, and the Assembly cannot interfere with its autonomy.

One of the reasons for the high rate of power is the very high rates given by Wapda to buy power from independent power producers. Dr Sher Afghan is galled by the fact that while Wapda pays 57 paisa per unit for hydel power it pays Rs6 for the power purchased from the independent power producers, who use the costly oil. But if the IPPs were not there generating over 2,000 MW of power the shortage of power in the country would have been very acute.

And now Sui Southern Gas and Sui Northern are supplying more and more gas for power production, which makes the production less expensive than oil-based production. But the power is not enough for the vast needs of the power companies.

Some of the companies which have their own power supply are ready to sell their surplus power to other companies or consumers. But Wapda and the KESC stand in their way as their business can be affected.

Shortage of power and frequency of load-shedding and break-down in supply are major reasons for reduced industrial investment. Of course, they can have their own power units but that will cost money which they may have to borrow. But now the borrowing has become cheap in view of the low interest rates.

In such circumstances the Energy Conservation Plan would be re-examined and waste of power, paid or not, should be reduced to the maximum possible extent. It is not necessary that on every festive occasion the whole city should be lit up half the time using stolen power through the Kundas. Ministers, secretaries to the government and other high officials should not be supplied free power, while the government picks up the bills.

Is it necessary for all the KESC officers and the Wapda staff as well to be given 999 units of power every month to be burnt whether they need it or not?

Company chiefs should also be urged to reduce the use of power unnecessarily. What is the use of having some bright homes in the city and totally dark streets?

Use of ‘kundas’ at Kuchchi Abadies at one end and by unscrupulous persons at Clifton or Defence Housing Authority should be prevented to the maximum possible extent. Too many are the hydel power projects which are to commence production late. They were earlier scheduled to begin production in 2005-06. They include Khan Khawar Hydro power project with a capacity of 72 mw which was scheduled to begin production in June 2006 but will commence production in 2007-08, the Golden Gol Hydro Power project with a capacity of 106 mw, Duber Khawas project with a capacity of 130 mw. Jinnah Hydropower project 121 mw.

What all this shows is that more and more major power consumer will now rely on their own power, as they find it both economic and reliable. And those who buy the KESC or the Wapda units to be sold, like the Jamshoro power station or Faisalabad Electric power grid may find less number of major consumers than they had anticipated.

Meanwhile if enough gas is available as from Turkmenistan or from Iran fuel supply for the power companies can become less expensive. Meanwhile the common man and the small and medium enterprises and factories without their own power will continue to remain exposed to the vagaries of Wapda and be vexed altogether. But the KESC can fare somewhat better if Sui Southern Gas company supplies all the gas it needs by increasing its deliveries steadily, otherwise the KESC will continue to be a millstone around the neck of the industrialists and domestic consumers in the city with its theft and loss rate of almost 50 per cent in reality.