LAHORE - A Fact Sheet issued by the Institute for Policy Reforms shows that it is possible for government to reduce power shortage immediately.
Aging power generation and transmission infrastructure results in below capacity power generation and transmission breakdowns. The government must prioritise investment to upgrade GENCOs and transmission lines, as priority for roads (Rs116 billion) is hard to fathom at a time of national emergency in energy. “There are not sufficient power projects in the public sector. Those that exist mostly receive off budget funding and on a scale that would take many years to complete. It is possible to increase power supply within 12-18 months if government gives it the priority that it deserves.” The energy crisis has caused extreme suffering for the people and is potentially destabilizing for the country. Rather than asking for people to wait, government must address the issues within its control and ease the nation’s pain. Energy supply can be increased immediately if the government wishes to do so.
The paper advises government that in addition to power generation it must look to the present broken power system in the country. The system suffers from poor governance, wrong priorities, and lack of investment.
Referring to a recent meeting of the Minister for Water & Power Kh Asif with the press, where he recounts the causes of energy crisis, the fact sheet demonstrates that government policy and management are also responsible for the shortage.
The minister’s list of causes includes high circular debt, power theft, lack of gas allocation, and aging public sector infrastructure. While agreeing with the minister about the causes, the fact sheet wonders, which one of these issues is beyond the government’s remit.
The minister’s litany is, in fact, a major critique of the government’s handling of the power sector.
The paper goes on to say that DISCOs, in whose system power theft takes place, are under the direct control of his ministry (except K-Electric). The estimate of loss from power theft and under recovery of bills by DISCOs is about 260 billion rupees. Could leakage on such a vast scale take place without the knowledge of DISCOs? Under recovery of bills has increased from last year, especially among the better performing DISCOs. In an alarming development of recent years, under recovery from private consumers has increased. The ministry must take administrative measures and hold DISCO management accountable.
Reduced gas allocation increases cost of power as well as the circular debt. IPR refers to its brief of May 2014, which shows that government reduced gas supply for the power sector by 20% between 2014 and 2013. The diverted gas, it appeared, had gone to selected fertilizer manufacturers. On the other hand use of the expensive furnace oil increased by 14%. Increase of gas for power will improve directly its supply. Government must correct the situation immediately. Taking the minister’s figure of 164 mmcfd for short supply of gas, IPR estimates that the economic loss of this policy is 400 million dollars per year.