islamabad -

Caretaker Minister for Water and Power Dr Mussadaq Malik has said that energy crisis in Pakistan is the result of a faulty business model, increasing demand-supply gap, and losses within transmission and distribution system.

He was speaking at a consultative meeting on “Pakistan’s energy crisis and its possible solutions” organized by Sustainable Development Policy Institute (SDPI) here on Tuesday.

Talking on deepening energy crisis, the minister informed that if the required funds and gas is not provided in next few days, there would be increase in period of loadshedding which currently stands at 12-14 hours in urban areas and16-18 hours in rural localities.

Deliberating on the reasons for energy crisis, he said that currently Pakistan is generating around 14,000MW of electricity at peak with 40 per cent of energy produced with the most expensive fuel such as diesel and furnace oil. He said producing costly electricity and distributing it at subsidized prices is a faulty business model which cannot work anywhere in the world. He also lamented lack of accountability regime and management crisis which is contributing to power crisis in Pakistan.

He said government is planning to increase generation of electricity by shifting the bulk of generation responsibility from inefficient GENCOs to the more efficient IPPs. He explained that Rs 13 billion per month are spent on providing 6000 metric tons of oil to GENCOs which generate only 650MW per month. He said idle capacity of IPPs can be utilised by injecting Rs 10 billion rupees which would produce 1150MW electricity. This, he said, would result in saving of 36 billion rupees annually along with additional generation of 500MW electricity per day.

Talking on issues in supply of fuel to GENCOs, he said ‘adulteration’ and ‘pilferage’ of fuel are major issues which results in billions of rupees loss to government. He said ministry is working on a mechanism proposed by SDPI titled ‘fair average quality price formula” under which the price of fuel would be reduced if it is found to be of less quality. This, he said, would reduce corruption and result into efficient power generation.

The minister also said that only 2.5 percent of transmission losses are allowed by regulators in Pakistan but this year these losses are estimated at 3.6 percent and this differential when calculated is more than the power needs of the two smaller provinces in the country. He said the ministry is now trying to reduce the transmission losses by signing performance contracts with transmission companies and installing transmission measurement software’s.

Talking of solutions to reduce distribution losses, he mentioned installing smart meters at high-consumption users. In the long term, he suggested to either privatize urban DISCOs or handing them over to the provinces. He also talked of launching a website that would not only list the efficiency and performance of all GENCOs but allocations of money would be listed to ensure transparency.

Speaking at the occasion, former chairman WAPDA Shams-ul-Mulk said that lack of appropriate planning has led to today’s energy crisis in Pakistan. He pointed lack of seriousness and political will at part of government political leadership who despite clear warnings from WAPDA and international bodies, didn’t bother to give serious thoughts to plan future energy needs of the country. “WAPDA and international bodies warned government to build a major water reservoir and power generation facility by 1992 but nothing was done and 1992 was the year when loadshedding started in the country,” he added. 

In his introductory remarks, Dr Abid Suleri, Executive Director, SDPI said that Pakistan needs to look for alternate and innovative ways to end energy crisis in Pakistan. He emphasized on better policy decisions from NEPRA and demanded stringent measures to reduce pilferages in fuel supply and transmission and distribution losses.

Dr Suleri proposed to divert gas supply from inefficient plants to more efficient plants so that wastage of gas is reduced and more mega watts of electricity can be produced. He also advised ministry of water and power to interact more with the academia and industry to come up with collective measures in addressing energy crisis in Pakistan.