Improving Distribution

According to the K-Electric Investor Presentation 2020, the Aggregate Technical & Commercial (AT&C) losses of Pakistan’s power sectors were the highest in the region. While successive governments ensured the addition of 10,000-megawatt (MW) power generation in the last five years, the officials focused little on reducing losses and upgrading transmission and distribution capacity.

However, Pakistan Tehreek-e-Insaf’s (PTI) government has decided to bring reforms in the transmission and distribution system as well. The government is undertaking a project for electricity distribution efficiency improvement. The World Bank (WB) is providing $375.73 million for the planned interventions that the government will be making in the energy sector. Until now, increasing institutional efficiency remains a work in progress. Efforts to date have been much delayed and improvements have been limited.

The successful completion of the project will potentially reduce the high losses of distribution companies (DISCOs) and enhance their performance. Despite the government’s efforts to improve the generation capacity and recent focus on cost rationalisation, the structural issues in electricity distribution undermine the benefits of earlier endeavours. Efficiency was the missing link in making the power sector more reliable.

These reforms will reduce the line losses that remain a big problem to this day. While these reforms are direly needed, the government must not repeat the previous mistakes. Our track record in completing the development projects is not satisfactory.

Beyond these necessary interventions to make the power sector more reliable, the government needs to shift its focus to cleaner and greener production sources of electricity. The incumbent government has vocally kept climate change at the centre of its priorities; it needs to invest in sources like wind and solar power plants. Investments in such energy sectors will get us sustainable, cheap and clean electricity. The sooner we get rid of fuel-based sources and coal for electricity generation, the better it will be for the overall environment and national exchequer.

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