Abdullah Kamran
The power sector in Pakistan is currently in the grip of a multitude of issues, the urgency of which cannot be overstated. Unplanned and expensive power generation growth, inadequate transmission and distribution capacity expansion, and persistent governance challenges have all converged to create a situation where electricity prices are soaring. This rapid increase in tariffs has made electricity unaffordable for a wide range of stakeholders, from large and small businesses to middle and lower-middle-class households. The recent surge in power tariffs has sparked widespread public outcry, underscoring the pressing need to address the systemic flaws that are threatening to plunge the country into an electricity crisis.
Despite longstanding rhetoric and promises of reform, tangible progress has remained elusive. Successive governments have toyed with the idea of overhauling the power sector, yet concrete actions have been scant. The decision-making process has been marred by selective measures aimed at boosting power production capacity, exacerbating the underlying issues rather than resolving them. As a result, the repercussions of past decisions are now being keenly felt across the board.
Efforts to address systemic faults within the Power Division have been sporadic, with 23 fault lines identified for resolution. However, a consistent and comprehensive approach to addressing these issues has been notably absent. It is evident that the historical track record of the Power Division in implementing meaningful reforms has been less than stellar, raising questions about the likelihood of its ability to enact substantive change.
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Of particular concern is the continuation of policies, such as the 1994 and 2015 power policies, which have had adverse effects on the economy and consumers alike. For instance, the 1994 policy led to a significant increase in the cost of electricity for consumers, while the 2015 policy resulted in a surge in capacity payments for power plants. The very parties responsible for formulating these policies are now in positions of power, prompting scrutiny of the decision-making processes that led to their implementation. There is a pressing need to interrogate the rationale behind key decisions, such as the proliferation of power projects and the failure to align transmission capacity with the escalating generation capacity.
The implementation of multiple power projects, including nuclear and RLNG plants, alongside initiatives such as the China-Pakistan Economic Corridor (CPEC) and the Thar coal projects, has raised pertinent questions about the overarching strategy guiding these endeavors. The perplexing decision to establish imported coal-based power plants, despite compelling reasons to explore alternative solutions, has left consumers burdened with exorbitant capacity payment charges. Furthermore, the mismatch between the actual production and fuel costs of these projects has further exacerbated the financial strain on consumers.
The lopsided distribution of power capacity in the southern regions vis-à-vis consumption patterns in the north has led to logistical challenges, contributing to periodic blackouts and necessitating the production of costly Furnace Oil power during winters. Meanwhile, the underutilization of potentially cost-effective nuclear plants has evoked concerns about the lack of strategic resource management. Deliberations concerning the enhancement of transmission capacity and the introduction of wheeling (the process of transferring electricity from one location to another) and market operators (entities that facilitate the buying and selling of electricity) have been marred by the imposition of prohibitive wheeling charges and persistent transmission and distribution losses.
Undoubtedly, the road to reform the power sector is fraught with complexities, necessitating a willingness to confront entrenched bureaucracies. The reluctance of key stakeholders to cede control has impeded the reform process, underscoring the inherent challenges in effecting meaningful change. As Pakistan confronts the economic distress stemming from its power sector woes, a concerted, transparent, and collaborative approach is not just imperative, but also an opportunity for all stakeholders to contribute to the solution. Your involvement is crucial in navigating the path towards sustainable and efficient electricity provision.
