Pakistan’s electricity sector is a developing market. For years, the matter of balancing the country's electricity supply against the demand has remained an unresolved matter. The country faced significant challenges in revamping its network responsible for the supply of electricity. Electricity generators were seeking a parity in return for both domestic and foreign investors indicating it to be one of the key issues in overseeing a surge in electricity generation when the country was facing shortage. Other problems included lack of efficiency, rising demands for energy, and political instability. Provincial and federal agencies, who are the largest consumers, often do not pay their bills. At one point electricity generation had shrunk by up to 50% due to an over-reliance on fossil fuels. The country was hit by its worst power crisis in 2007 when production fell by 6000 Megawatts and massive blackouts followed suit. Load shedding and power blackouts were quite severe in Pakistan before 2016.

In late 2015, massive electricity shortage continued with long-standing failure to provide reliable service and rampant corruption being met by public protests, unauthorized connections, and refusal by consumers to pay for intermittent service. Recent reforms include the unbundling and corporatization of the Water and Power Development Authority (WAPDA) into 10 regional distribution companies, 4 government-owned thermal power generation companies and a transmission company, the National Transmission and Despatch Company. The hydropower plants were retained by WAPDA as WAPDA Hydroelectric. All are completely owned by the government. K-Electric Limited (formally known as Karachi Electric Supply Company), which is responsible for power generation and distribution in the city of Karachi, is listed on the stock exchanges and is privately owned. Privately owned independent power producers generated 53% of the country’s power in FY2016.

During the 2005 earthquake and floods of 2010, the power stations, distribution & transmission and other energy infrastructures were badly damaged. During the floods and rainfalls, the recently constructed Jinnah hydroelectric power plant was flooded in addition to severe damage to transmission and distribution network and installations while several power plants and refineries were threatened by rising waters and had to be shut down. Natural gas field output has to be reduced as the flood waters approached the wells. There has also been some concern by nuclear activists over the effect of natural disasters on nuclear plants especially over the Chashma Nuclear Power Plant, since the plant lies over a geologic fault. Due to over reliance on dams for electricity generation, some environmental impacts of dams such as submergence of usable/ecological land and their negative impact on the country's mangrove forests due to loss of river silt load, as well as increased risk of severe floods has become evident.

Implementing DSM Technology:

Demand Side Management (DSM) is used to describe the actions of a utility, beyond the customer’s meter, with the objective of altering the end-use of electricity - whether it be to increase demand or decrease it, shift it between high or low peak load periods, even managing it when there are intermittent load demands - in the overall interests of reducing utility costs. In other words, we can say it helps consumers to use electricity in an efficient way with low utility costs.

DSM can be achieved by improving the efficiency of various end-users through better housekeeping, correction energy leakages, and system conversion losses, as well as to minimise the corona effect in extra high voltage lines. DSM through adopting soft options like higher prices during peak hours, concessional rates during off peak loads, seasonal tariffs, etc. It also includes options for renewable energy systems, combined heating and power systems. Independent purchase of power to meet with consumer’s demand at lowest possible cost.

DSM is the modification of consumers demand for energy through various methods such as financial incentives and education. Usually, the goal of demand side management is to encourage consumers to use less energy during peak hours, or to move the time of energy use to off-peak times. Electricity use can vary dramatically on short and medium time frames and the pricing system may not reflect the instantaneous cost as additional higher cost. In addition the capacity of willingness of electricity consumers to adjust to prices  by markets, consumers (particularly retail customers) do not face real time pricing at all, but pay rates based on average annual costs or other constructed prices.

Various market failures rule out an ideal result. One of them is if supplier’s cost do not include all damages and risks of their activities. External costs are incurred by others directly or by damage to environment and are known as externalities. However, the best approach here is that to have a taxation, so to intervene on the demand side by some kind of rebate. Energy demand management activities has brought the demand and supply to a perceived optimum. Governments of many countries mandated the performance of various programmes for implementing DSM Technology after 1973 energy crises.

While changing the electricity market by some developed countries, a large uncertainty in the load growth has been faced with higher investment requirements for capacity addition, declining fuel sources and its associated environment costs. Due to change in regulatory stands, tariffs have also changed affecting the ability of utilities of customer service base. The concept of DSM was developed in response to the potential problems of global warming and the need for sustainable development, and the recognition that improved energy efficiency, which represents the most cost-effective option to reduce the impacts of these problems.

Demand Side Management refers to cooperative activities between the utility and its customers and also with some third parties like energy service infrastructure companies and various trade allied agencies. To implement the option for increasing the utility of efficiency, DSM service is one of the vulnerable idea in Power industry. Because, while implementing DSM Technology, it satisfies the customer’s electricity demand, reduces or stabilizing the costs, improving the value of services, and maintain the lifestyle productivity. While in the scenario of social benefits it reduces the environmental degradation, protects global environment and maximise the customer welfare. And same is its utility benefits which lower the cost of service, improving operating efficiency flexibility, reducing capital cost and saves the capital investment, improving customer service.

After analysing its benefits by power engineers and the data collected by power technocrats it has been found that the implementation of DSM will be more beneficial for power industries. Here in Held Kashmir, this DSM Programme often hinges on the ability to deliver the programme to its power consumers, whether households are industrial units or not. However, there is a key challenge before PDD of this state to persuade DSM with implementation of technological resources, to achieve the DSM objectives.

As might be expected, implementation is integrally linked with quality programme design. A poor programme design may be difficult to give its basic purpose. If Held Kashmir's PDD will take some steps to implement DSM Programme they will have to take some key steps for its successful implementation like:

Ø Start with good programme design,

Ø Respond with good performance design

Ø Be flexible with the detail of programme delivery

Ø Learn from other utilities in the region

DSM is planning, implementation and evaluation of utility activities in power industry to design and encourage the consumers to modify their electricity consumption pattern, both with respect to the timing and level of demand in kilo watt (KW) and energy in kilo watt hours (KWH).