Power para­dox

The Pak Banker - - FRONT PAGE -

It is a para­dox that Pak­istan's power sec­tor has made progress but lacks sus­tain­abil­ity. The prime ob­jec­tive should be the pro­vi­sion of un­in­ter­rupted en­ergy to the masses at af­ford­able costs. But this re­mains al­most as elu­sive as ever. The kind of progress that should have been dis­cour­aged was the mas­sive drive to mind­lessly in­duct as many mega-watts into the sys­tem as pos­si­ble as if the power sec­tor con­sisted only of the gen­er­a­tion com­po­nent.In its re­cently re­leased State of the In­dus­try Re­port 2017, the Na­tional Elec­tric and Power Reg­u­la­tory Au­thor­ity (Nepra) has once again high­lighted that the ad­di­tion of gen­er­a­tion fa­cil­i­ties has ne­ces­si­tated a strong trans­mis­sion and dis­tri­bu­tion sys­tem to de­liver those megawatts to con­sumers.

Need­less to say, all ef­forts to bring ef­fi­ciency in the sec­tor would be de­feated if the DIS­COs do not im­prove their Trans­mis­sion and Dis­tri­bu­tion (T&D) losses. The en­ergy mix as a re­sult of the in­ter­est in coal and RLNG power plants by the for­mer PML-N gov­ern­ment means that these two fos­sil fu­els will dom­i­nate in the years to come. Ac­cord­ing to pro­jec­tions con­tained in the SOI by the Na­tional Trans­mis­sion and Dis­patch Com­pany (NTDC), RLNG and coal to­gether will ac­count for 40 per­cent while hy­dro power would con­sti­tute 33 per­cent of the over­all en­ergy pie by FY2025. How­ever, Nepra be­lieves the hy­dropower projects might not come on­line in time which would re­duce the pro­jected over­all ca­pac­ity of 62,185 MW.

A mat­ter of se­ri­ous con­cern is that a good per­cent­age of the coal power plants are im­ported and so is R-LNG. Nepra be­lieves any 1 ru­pee de­pre­ci­a­tion against the dol­lar would pile up Rs4 bil­lion on an an­nual ba­sis to the im­ported fuel bill for planned gen­er­a­tion in the near fu­ture. With the kind of se­vere cur­rent ac­count deficit the coun­try is fac­ing in the fore­see­able fu­ture, it will be a chal­lenge for the gov­ern­ment to both con­trol the deficit and pro­vide re­li­able gen­er­a­tion, not to men­tion the bur­den of ad­di­tional ca­pac­ity pay­ments. The reg­u­la­tor notes that the aim to lower over­all con­sumer end tar­iff will suf­fer if in ad­di­tion to low­er­ing fuel costs, the ca­pac­ity pay­ments are not kept at an af­ford­able level.

And what is the point of in­cur­ring these ca­pac­ity pay­ments if the en­ergy sold does not in­crease? Nepra be­lieves that con­straints in the dis­tri­bu­tion and trans­mis­sion sys­tem will need to be solved on a "war-foot­ing" ba­sis.It doesn't see en­ergy sold in­creas­ing by more than 10 per­cent an­nu­ally over the com­ing years and so em­pha­sizes even more on keep­ing fuel costs on the lower side. But the new ad­di­tions of LNG and coal won't be mak­ing that hap­pen ei­ther. Then there is the case of re­new­ables. The role of the Min­istry of Water and Power has been ques­tion­able when it comes to the pro­mo­tion of re­new­ables.

Nepra notes that small hy­dropower plants could not be built as the Min­istry did not pro­vide a clear pol­icy about their in­duc­tion. In fact, the Min­istry doesn't have a clear and con­sis­tent pol­icy for any re­new­able source, be it wind, so­lar or hy­dropower.The SOI re­port also be­moans the shift in the ex­ist­ing reg­u­la­tory regime through Amend­ment Act 2018 as well the gov­ern­ment's en­hanced role in pol­icy and rule mak­ing for the reg­u­la­tor. The per­for­mance of the dis­tri­bu­tion and trans­mis­sion sec­tors also con­tin­ues to fall quite short of the mark. The prob­lems of the power sec­tor are many and com­plex call­ing for a long term strat­egy to solve them.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.