Messy power sector

AS Minister for Energy, Sardar Awais Ahmad Khan Leghari, exchanged views with a delegation of Pakistan Business Council (PBC) to spur electricity demand, different parts of the country faced long hours of load-shedding making mockery of the claims about surplus generation capacity. The alarming situation prompted Prime Minister Shehbaz Sharif to issue directions to authorities concerned to ensure that no part of the country faces load-shedding of more than two hours. In a separate but related development, NEPRA – the power regulator – approved a $47 billion, decade-long electricity expansion plan Friday but rejected a $900 million battery storage investment. It is a matter of serious concern that despite so-called reforms introduced by the government over the last several years, the menace of load-shedding is back, disrupting routine life all over the country and affecting economic activities. There are always readymade reasons to justify outages but the question arises as to what benefit these reforms offered except manifold increase in tariff and continued mind-boggling payments to Independent Power Producers (IPPs) whereas the quality of service remains as poor as before. The meeting the PM chaired to review the electricity supply position was informed that the supply of regasified liquefied natural gas (RLNG) had been affected by the ongoing situation in the Middle East and tensions in the Strait of Hormuz. This had caused a reduction in electricity generation, which in turn led to load management to 'maintain a balance between demand and supply. Safe arrival of a tanker at Port Qasim in Karachi on Thursday carrying 82000 tonnes of liquefied natural gas from Qatar is yet another confirmation that Pakistan was better placed to procure gas despite shortages and dangers involved during navigation. Why was the situation allowed to deteriorate to such an extent where load hours of load-shedding were necessitated to make firm arrangements for supply of LNG? Similarly, RLNG accounts for approximately 20% to 22% of Pakistan's overall electricity generation and broader energy mix, therefore, in case of delay in the import of RLNG, the authorities should have activated dormant capacity to bridge the gap. What is the surplus generation capacity for if this does not lead to uninterrupted supply of power to consumers? This means investment worth billions of dollars made over the years to generate electricity to offset load-shedding went to drains and the policy only benefited the elite owning IPPs. It is also regrettable that the directive of the PM not to impose load-shedding beyond two hours means the menace will remain there for an unspecified time whereas the situation demands emergent measures to eliminate the outages altogether. Apart from formal load-shedding, people in some areas face outages for longer duration and many times in a day on different pretexts and consumer grievances are not appropriately addressed. In this backdrop, the PM has done well by ordering the formation of Consumer Grievance Redressal Committees at the distribution company level within a week to address public complaints related to electricity transmission and power supply issues. Inclusion of public representatives in these committees might help mitigate sufferings of the people as they will be able to approach their representatives in case of inaction or deliberate delay in resolving complaints. As for new generation plan, there are legitimate concerns by almost all stakeholders that addition of more capacity without system improvement and affordability of the tariff will be suicidal. Pakistan already sits on a 15-20 gigawatt capacity surplus while existing plants run at just 45 per cent utilization, which means additions will serve no other purpose but increase the vicious circular debt and capacity payments at the cost of consumers. The exclusion of the battery storage and some other cost effective projects also raises questions about transparency of the plan.