Battling loadshedding

Published August 4, 2016

THERE is little surprise that, in the twilight of its term in power, the government is moving into panic mode regarding its promise to end loadshedding before 2018.

It was easy to make those promises during an election campaign and even give unrealistic timelines. But everybody who understood the power sector knew that delivering on the promise was going to take a lot more than megawatts.

Since coming into power, the government has undertaken a series of steps to try and tackle the question of power shortages, including a large one-time settlement of the circular debt in its first days in power, and a number of projects to add more power generation capacity as well as upgrading some sections of the transmission system.

But, beyond these largely quantitative measures, it has run out of ideas. This, indeed, seems to be the take-away from the discussion in Islamabad on Tuesday, where Prime Minister Nawaz Sharif discussed issues of energy with senior federal ministers.

Addressing the question of chronic power shortages was never just a question of quantity alone.

Loadshedding exists because the entire power system is badly outdated and in dire need of deep, institutional reform. These reforms are needed across the board — from governance of power sector entities, to induction of new technologies like time of use metres and net metering, to pricing reforms to move towards greater market-based pricing of electricity.

No discernible progress has been made in any of these areas. Instead we have heard a constant litany of projects to utilise cheaper fuels, like coal or LNG.

It is true that a growing dependence on imported furnace oil for power generation was an important factor in giving rise to the power crisis in the first place. But it wasn’t the only factor. Improving efficiencies and recoveries, as well as accurate billing, and skewed incentive structures in the power sector all play a role.

Given how the government locked itself into a project-based approach, it now naturally finds itself chasing its own deadlines in a futile attempt to add more megawatts to an otherwise dysfunctional system.

Without deeper reforms, this is akin to pouring water into a leaky bucket in the hopes that, if the quantity of water being poured is increased, the bucket may yet fill up.

This is a failure of vision and imagination, and for this failure the PML-N can expect to be taken to task in the next general elections.

With the underlying problems left unaddressed, whatever incremental electricity is brought into the system will have the costs of the dysfunctions priced into it.

We have already seen this with the upfront coal tariff, and the demand for dollar-based settlement of all power purchases by Chinese sponsors, which has driven up tariffs.

The government is right to be worried about its legacy in the power sector.

Published in Dawn, August 4th, 2016

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