ISLAMABAD - The 29th Annual General Meeting and the Conference of the Pakistan Society of Development Economists discussed different issues related to energy such as energy growth nexus, governance issues in the energy sector, change in demand for electricity due to climate change, and electricity demand in Pakistan.
Chairing the session renowned economist Dr Ashfaq Hasan Khan, Dean and Principle, School of Social Sciences and Humanities at the NUST said that overtime, the quality of the papers presented at the PSDE Conferences has improved. However, unfortunately due to lack of capacity of government employees to understand these papers, the findings of the research are not used properly, he added.
Dr IU Mangla, Western Michigan University and Dr Jamshed Uppal, Catholic University, USA, presented a paper on the Macroeconomic situation of the economy with special emphasis on the energy security. Presenting their paper they said that since energy sector is central to economic growth and most likely it would remain import dependent due to which energy sector is likely to remain dependent on the foreign exchange reserves. Therefore, better foreign exchange reserve management is inevitable for consistent supply of energy.
Later on, a panel discussion on "Production, Distribution and Pricing of Energy", has cleared numerous misconceptions on the energy issues. Participants from FESCO, PEPCO, and NEPRA clarified production, distribution and pricing issues of energy, while Khawaja Idrees from PIDE gave an alternative model for governance. He said that the current model of governance is based on false and unpractical assumptions. He proposed an alternative model of governance in which control should be given to the provinces especially to control pilferages, which will lower the overall cost of DISCOs hence a decline in the prices of electricity.
On the other hand, Tahir Basharat Cheema, MD PEPCO said that they went to the provinces with this model but it did not work. There are several problems in decentralising the DISCOs and GENCOs. Khawaja Idrees further said that privatising the DISCOs and GENCOs in the current scenario is not a viable option because the regulator is not strong.
Emphasising on the high energy pricing, Syed Insaf Ahmed, former Director General Tariff, NEPRA said that cost of service has increased because there is no clear fuel policy. We are dominated by the oil based generation of the overall cost of energy, 85 percent is associated with GENCOs and 15 percent with DSICOs. However, the fuel cost is 60 percent of the overall cost of energy. Therefore, consumers are suffering due to its high cost.
Moreover, due to continuous exchange rate depreciation consumers are paying fuel price adjustments each month.
Discussing the role of policymaking, Tahir Basharat Cheema, Managing Director, PEPCO lamented the fact that professionals are not asked while making the policy. Moreover he said that we are still following the load-suppression tariff model of 1960, which needs to be updated. Emphasising the importance of energy conservation he said that we can save electricity upto 5000 MW by just following the energy conservation strategies. Rana Abdul Jabbar Khan, Chief Executive Officer and Director, FESCO explained the reforms introduced at FESCO, which helped in reducing the distribution losses to 9.4 percent. Moreover, he said that to end the illegal practices of meter-readers Automated Meter Reading System has been introduced, which will help in controlling the theft as well.