THERE is no denying the fact that all is not well in the power sector which is critical to our economy — both domestic and industrial — in a variety of ways. And this is true of the sector over the last many, many years. Neither the power is affordable nor is its supply reliable. There have been total blackouts lasting over 20 hours in the last decade with no guarantee that this, or even worse, will not happen in the future.
It is a pity that proper investigations of these nationwide outages have never been conducted, and causes have not been pinpointed to rectify the shortcomings and pitfalls to avoid recurrence. Also, the responsibility has never been fixed for the catastrophes that caused losses worth billions of rupees to the exchequer and great inconvenience to the public at large. Industrial, agricultural and commercial activities naturally come to a grinding halt in such situations, but no heads have ever been rolled.
Besides cascade tripping of all generating stations and high-voltage transmission lines, it is intriguing to note that restoration of power took more than 20 hours, reflecting badly on the staff entrusted with the task of running and managing the national power dispatching and control system.
The management has chosen not to share its findings, if any, with the public. The National Electric Power Regulatory Authority (Nepra) has apparently been given the sole task of raising the tariff several times a year. Its duties should also include compensating the consumers for the energy not supplied, as is the case in civilised countries.
Data for 2021-22 showed dismal performance as against a total installed generation capacity of above 40,000MW, only 23,000MW could be utilised at peak hours against a demand of 28,000MW, resulting in loadshedding of about 5,000MW. This was mainly due to transmission constraints hanging on for quite a few years because of mis-management and lack of coordination.
Capacity payments need to be made for under-utilisation of excess generation, mostly consisting of independent power producers (IPPs) that run on costly imported fuel.
The penetration of renewable energy, mostly comprising solarisation in the energy mix, is not going according to plan, or as advised by the World Bank and other institutions. At the current pace, it is doubtful that the solar generation will be 30 per cent of the total energy mix by 2030, as planned, to contain the tariffs hikes. The required investment in transmission is not forthcoming to match the increased generation capacity which is worrisome and needs all-out efforts to attract investors.
Devolution and decentralisation of electric power industry is not a bad idea in search of a better and effective manage-ment overall. Restructuring and deregulation, however, need to be carried out with caution, looking at associated pitfalls as has happened in some parts of the United States and Canada where electricity prices went skyrocketing after deregulation and restructuring. We should learn from their mistakes and keep an eye on possible abuses and profit-making by the new participants entering the so-called open access energy market.
As a result of abuses and manoeu-vring, and the consequent high power tariffs in restructured and deregulated entities, a few American states have decided to revert to the old regulated system, while some others have halted the process of deregulation and restructuring.
Overall, the cost of electricity has significantly increased beyond what they might have been if the former regulatory procedures had remained in place. Market abuses have increased in the open market scenario, and this should be an eye-opener for the advocates of deregulation and restructuring of electric power industry in Pakistan because of the many players who have entered the electricity market.
The power sector needs thorough overhauling by bringing in honest and capable persons at key positions to arrest the ever-deteriorating conditions. Who will do it? That is the big question.
Published in Dawn, May 27th, 2023
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