There is no way that a poor country can afford to keep providing heavy subsidies to consumers. In peak demand hours, consumption should be discouraged
The government had aspirations to provide sustainable and affordable energy and, therefore, it announced a power policy for five years, i.e. the National Energy Policy, 2013-18. The federal government had started various projects on a priority basis to overcome the shortage. The ministry of water and power recovered Rs 5.3 billion from various government departments in two years, which was a positive sign for the power sector. It is also a positive sign that the government enhanced the budget for the power sector in the Public Sector Development Programme (PSDP) for the year 2014-2015. In an effort to attract private sector investment in the power sector of the country, the government increased the tariff for coal based power projects by 12 percent to 20 percent to encourage fresh investment.
However, the government has to face various challenges like the issue of circular debt, high price of electricity, inefficiency of institutions, theft of electricity and line losses. Pakistan has natural resources such as coal that can reduce the generation cost of electricity. The 40 kilometre transmission line has not been installed yet at the Neelum Jhelum project and with the passage of time the nation will bear the high cost of this transmission line. The National Transmission and Dispatch Company (NTDC) and distribution companies (DISCOS) need to be managed by motivated, professionally competent and efficient managers and engineers. They require operational and financial autonomy under empowered CEOs and a board of directors to achieve the desired results without any political interference. During the last one year, the government has completed some projects like the Uch II hydropower project to generate 371 MW, the Guddu thermal power project of 747 MW and Quaid-e-Azam Solar Park project of 100 MW. Moreover, the partial start of Nandipur power project has added 95 MW of electricity to the national grid. In June 2013, the generation capacity was 16,800 MW and the shortfall was 3,774 MW but in May 2015, although generation capacity had increased to 19,309 MW, the shortfall could not be decreased and it peaked at 4,500 MW. With the passage of time, due to development and population growth, Pakistan’s energy requirements will substantially increase. Therefore, the government should increase the generation capacity according to the demand growth.
Though the government has removed the subsidy on electricity partially, it should be removed totally. Line losses are also a major reason for circular debt, which ultimately affects the electricity supply. Moreover, Pakistan does not have efficient water storage capacity. The water storage capacity of the US is three years of water while China has a year’s water storage capacity but Pakistan has only 30 days storage capacity. There are many important positions vacant in the power sector that have reduced institutional capacity; the government should ensure the filling of these positions. There is no way that a poor country can afford to keep providing heavy subsidies to consumers. In peak demand hours, consumption should be discouraged. Hopefully, the government will meet its energy policy targets and will increase the generation capacity for sustainable economic growth based on the rising needs of industry, agriculture, services and the domestic sector.
However, some suggestions need early implementation including the saving of electricity on an individual basis. The government should launch awareness programmes through the media and educational institutions. The government should ensure the energy efficient use of machinery, equipment and appliances in households and industry. The role of renewable resources for electricity generation is the need of the hour. Pakistan must promote solar and wind energy, which can provide sufficient electricity at affordable prices to consumers. The government must ensure the use of daylight as much as possible. In this regard, the formula of Musharraf’s government can be implemented.
Moreover, all commercial activities in major cities must be stopped by 8:00 pm. Pakistan needs to construct small and large dams that not only generate electricity but also save the wastage of water. Localised distribution can reduce line losses. UPS/generators are temporary solutions and they create more inefficiency. Empowering the Water and Power Development Authority (WAPDA) is the need of our time. The institutional capacity building of WAPDA will provide better results. The National Power Policy of 2013 was not a long-term visionary document. It was designed to overcome the current crisis. Therefore, there is a need for long term planning for the next 25 to 30 years. There is a need for the 40 kilometre-long transmission line at Neelum Jhelum project to be completed as soon as possible. Last but not the least, the government should strictly implement the power theft ordinance.
The writer works at IPRI and is a freelance columnist