SO far so good. It seems the government is working along the right lines where the new energy policy is concerned. The thinking going into the policy is to work on a large-scale transformation of the power sector. This is good because a large-scale and comprehensive intervention is exactly what is required to pull the country out of the quagmire of growing power shortages. Small-scale tinkering here and there — rental power plants or impotent new boards of governors for a few entities — is what is not needed. The new policy being worked on by the PML-N government appears to be comprehensive, taking reforms in generation, transmission and distribution, as well as fuel supply and operational efficiency to a whole new level.

Perhaps this explains the delay in the formal announcement of the policy, which has been expected since days after the swearing in of the new cabinet. While it is now being reported that the policy will be announced in a couple of weeks, the delays are entirely understandable. Unlike the budget, which betrayed signs of being put together in haste, it is expected that the energy policy, with its extensive scope, will see detailed consultation and thorough homework before moving towards the implementation stage. So deliberating and poring over the details is time well spent, and the indications on the size and scope of the policy show that the government is serious about taking on this crisis by the horns.

But with large scales, come big questions. Missing from the details so far known is clarity on how pricing reforms will be advanced. We know that some slabs are being reworked — with an eye to protecting lifeline and lower-middle-class consumers from the inevitable price increases that are coming. We also know that the new policy will aim to recover the full cost of generation from billing recoveries and do away with any need for subsidies on government account and its attendant problems of circular debt. But what we have yet to see is work to create a market-driven pricing mechanism. There’s also no sign of augmented powers for the regulator to prevent market failures. And it is unclear where the massive investment required to bring about the operational efficiencies and improved fuel supply chain will come from. Private-sector efficiencies will not come in the absence of private-sector pricing. Admittedly, a comprehensive plan to reform the power sector will be a tale that will grow with the telling, but the government would do well to cast some light on the important dark spots in its thinking thus far.

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Comments (2)

A concerned pakistani
June 26, 2013 12:39 pm

Good suggestions if implemented. If there is a will there is a way, Energy crisis can be ended if we follow following suggestions. 1-Heads of all departments like Gencos, Discos, I(Escos)s, Pepco, SNGPL and SSGPL must be changed and new authorities must be given time limit task to end this crisis otherwise they should also be sent pack to their homes. 2-Free units to all employees of all above departments must be stopped forthwith until and unless this crisis came to an end. 3- No subsidy should be given to more than 300 units. 4-Electricity/Gas theft should be stopped immediately. 5- Electricity/Gas connection must be disconnected against those persons/corporations/industrial units who are not paying the bills. 6-Line losses must be controlled on war footing basis. 7-Air conditioner must be banned in all govt offices. 8-Sindh and Baluchistan must start producing energy from wind by using their rich coastal areas. 9- KPK should emphasize to build small dams and enhance the capacity of Tarbela Dam and other dams.
10-Punjab should be shifted on Solar energy. 11-Federal Govt should complete work on IPI within year. 12-Along with that Nuclear Power Plants should be installed with the help of China and America. 13-IPPs and RPPs should be given licences on merit basis. 14- Further cheap energy producing sources like Thar coal Project, Bhasha Dia Mir Dam and Dasu Dam must be completed before time. 15-Markets should be closed in evening but 02days holidays must be continued so that Employees can visit markets on weekend and the businesses must not be disturbed. 16-Awareness programmes through educational institutions debates, Tele films and radio stations must be used to conserve energy. 17-Last but not the least all privileged class especially Parliamentarians must surrender their salaries and perks and privileges to curb the circular debt because they came to parliament to serve their people.

bubba
June 26, 2013 9:30 pm

A coherent energy policy is a daunting task for a country which has consistently avoided objective analysis in favor of unrealistic promises, chest thumping and even the "water car".

Your short of fuel as well and energy production facilities - but underlying both of these issues is the shortage of cash/credit and credibility.

The one country that seems to control your financial destiny (and ultimately your energy crisis) is the USA - they are your largest export market and they indirectly control most of your std sources of international financing. The fact that Pakistan has made a national pastime out of bad mouthing and antagonizing the USA will be a major impediment in devising a credible energy policy. Repairing the USA/Pakistan relationship is a must for any significant fix to the energy crisis - not something that is going to happen quickly and something that may not happen even if Pakistan desires it.

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