Low on Energy | Nargis Sethi

CONSIDERING that Pakistan is experiencing some of the hottest weather in years it is inevitable that everyone is talking about the energy crisis. However, referring to chronic load-shedding as the energy crisis only partially diagnoses the problem as the lack of electricity is one part of a larger issue.

Pakistan meets its energy needs using a variety of resources of which electricity makes up approximately 13pc, oil 32pc, gas 49pc and coal the remaining 6pc. Pakistan’s energy output is spread across various sectors and fulfils a number of different needs such as the provision of electricity to the domestic consumer, oil, gas and electricity for sectors such as industry, transport, agriculture, commercial activities, etc.

Electricity coverage in Pakistan hovers at around 65pc which means that roughly a third of the population has no access to electricity. Even those fortunate enough to have access continue to face outages throughout the year regardless of what category of consumer they are. However, Pakistan’s energy crisis goes beyond even the electricity shortage; there is gas load-shedding in winter, long lines for fuel for transport and recently there was an acute shortage of petrol across the country.

As most Pakistanis are only too well aware, the electricity crisis has a paralysing effect on the entire country and even the most cursory analysis leads one to conclude that a lack of consistent planning and implementation over decades has led to this juncture. This electricity crisis did not occur overnight and it cannot be resolved overnight.

For over a decade we have been endlessly debating the demand and supply gap in the power sector, confining the problem merely to generation. Though our consumption of electricity is constantly rising, the increase in generation has been insignificant; in fact, most public sector-owned generating plants are so old their capacity has derated making them less efficient and more expensive. The electricity crisis is a source of multiple problems for the government; a shortage of electricity prevents the government from making progress on its development agenda and from effectively carrying out the fight against terrorism and militancy.

The electricity problem has four components: generation, transmission, distribution and the last but most important, governance. To focus on generation and ignore the other issues would be an incomplete assessment of the problem. The present power shortage in the country has been aggravated by an inefficient, inadequate and obsolete transmission and distribution network and the huge governance issues that are administrative and financial in nature. Having served in the ministry of water and power twice (for short periods during both previous and present governments), I am of the view that the actual problem is one of governance and governance alone.

In terms of what needs to be done, the government must empower an independent body to carry out a comprehensive survey with well-defined terms of reference in the power sector to diagnose the reasons for the current crisis within a reasonable timeframe. The findings of this survey (and I am not aware if such an exercise has ever been undertaken before) would help planners tremendously and would be a welcome move away from the use of unreliable data and personal whims. Planning could then be carried out with a great deal more clarity as it would be based on accurate and relevant information; more attention could be paid to all four components in an integrated manner, not just generation. On the financial side the problem is also very serious, the cost of electricity is not recovered due to poor governance, the government provides a heavy amount in subsidies and has been clearing the circular debt. However, this cannot go on indefinitely.

When the Water and Power Development Authority was being unbundled the expectation was that the National Transmission and Dispatch Company and distribution companies (DISCOs) would invest in improving the old and decaying systems of transmission and distribution. Unfortunately this has not materialised and currently any unusual incident has a snowball effect on the entire system. A complete rethink of the financial side is also needed; the manner in which power producers, transmission and distribution companies carry out billing and payments are made is discretionary and should be done transparently as per an agreed procedure by the Central Power Purchase Company. The privatisation of DISCOs to improve delivery in the power sector has been on the to-do list of the government. K-Electric, often referred to as a model DISCO, has proved during the ongoing crisis in Karachi that its performance is far from perfect. The government must ensure that the model is modified so that the companies on the list to be privatised are held to transparent agreements about their responsibilities, guaranteeing an increase in power generation and the number of consumers, an efficient maintenance department along with a complaint redress system and investment in distribution infrastructure enhancement and development. The managements of the privatised companies should be consumer-centric and not focused merely on profitability.

An area to which no attention is given is conservation. The government has no conservation strategy; this should be deliberated, formulated and implemented effectively in consultation with all stakeholders. Implementation should begin from the top rather than the bottom and if our leaders at all levels are seen switching off lights in their offices and homes this will send a powerful message of conservation and also add some megawatts to the national grid without additional financial burden.

What is needed is an integrated energy policy to address all our energy requirements in a holistic manner implemented through an energy management ministry instead of multiple entities with overlapping functions and two separate ministries for water and power and petroleum and natural resources. It is imperative also to have clarity regarding leadership and responsibility in the energy sector to avoid future blackouts, breakdowns, and shortages.

The writer is a former cabinet secretary.

Low on Energy | Nargis Sethi

Published in Dawn, July 6th, 2015

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