Lingering power issues

Published November 25, 2022

THIS refers to the report ‘Nepra sees surplus power production in five years’ (Oct 3) wherein the National Electric Power Regulatory Authority (Nepra) predicted a surplus power in the country to the tune of 12,670MW from the present 3,184MW over the next five years.

But it failed to say if the power would also become reliable and affordable for the consumers. Probably, it will not be less expensive than what the rate happens to be today. Rather, the tariffs will go on spiralling because of the state of affairs prevailing in the power sector owing to gross mismanage-ment, incompetence, corruption and lack of professionalism.

The real problem is lower power demand to which no worthwhile attention has been paid or is being paid. Our foremost task should be to take all suitable measures to boost demand, which should have been undertaken some years ago, to match the existing power-generation and installed capacity. The breakup of huge surplus power has not been provided to find out the contribution of various energy sources, in particular the variable renewable sources, like solar, wind and hydropower and those from indigenous fuels, like coal. The power demand should match the generation to increase the utilisation factor so that we do not have to make capacity and other fixed costs, which lead to increase in power tariffs and daunting circular debt.

The government has announced lower tariffs for limited export-oriented enterprises for boosting exports and earning foreign exchange, which is a welcome step and will increase consumption and demand. The government needs to provide greater incentives for maximising the utilisation of surplus power to bridge the growing gap between power generation capacity and the demand for best economic propositions.

So far, adequate attention has not been paid to raise power demand proportionally to overcome the huge losses being incurred due to unutilised surplus energy. There are still many parts in the country having no access to electricity, while there are thousands of applications pending with distribution companies (Discos) for new connections.

Having surplus power is as bad as loadshedding economically. The situation must be brought under control as quickly as possible, otherwise the projected generation and demand figures paint a worrisome outlook. Out-of-the-box solutions to increase power demand may include lower power tariffs to selected enterprises, including small-scale industries and irrigation projects. More diversified industries should be identified for inclusion in subsidised rates in order to capture export markets. Even efforts should be made to supply electricity at reduced rates to the domestic consumers. Cross-border trading of electrical power needs to be explored.

The powers that be have been making the power sector more and more complicated to manage and operate efficiently with each passing day, be it generation, transmission or distribution sectors. The power sector debt has risen to Rs2.5 trillion and is expected to rise, which is a major headache to the country’s economy.

The multifarious technical and financial issues under the existing system are becoming more and more complex with time. The situation has been made so grave over the years that even the best minds will be unable to find a quick fix to it. The fact is that no one can sort out the mess even in the next 5-10 years. A reliable and affordable power system will remain a pipe dream, and even external help will not be able to clear the mess.

In the first place they will decline to board the sinking ship or they will come forward with a long-term plan to rectify or reverse the decaying generation, transmission and distribution sectors along with streamlining the administration.

Of course, all this will take a long time and will happen at a massive cost. No one can fix the woes of the power sector in weeks or months. It is a great folly to expect that the available expertise can deliver. A strong national will is required to bring out the necessary changes and that does not seem to be on the horizon.

Riaz Bhutta
Islamabad

Published in Dawn, November 25th, 2022

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