Pakistan electricity woes are as ancient as the country's history and by the look of things they don't seem to be getting any better in the near future either. Pakistan's electricity generation is heavily tilted towards thermal power generation that accounts for roughly two-third of the country's total power generation.
Such increased level of dependence on thermal generation leads to the high furnace oil import given that Pakistan does not produce sufficient crude oil to meet its requirements. Out of the 67 percent electricity produced from thermal sources, nearly half of it comes from natural gas which is a problem in its own right. Pakistan with its fast depleting gas reserves cannot afford to rely heavily on gas being burnt as fuel for power as it leads to massive losses for industrial sector which has to face the music of gas shortfall in the peak season.
The never ending politicking on the issue of water storage in the form of construction of dams has also cost the nation a lot in monetary terms over the years as the electricity generation form hydel sources has been stagnant in the past ten years. Hydel electricity generation in Pakistan only accounts for less than one-third of the total power generated, which is only because of inefficient policy making.
With global warming and climate change, threatening to melt the Himalayan glaciers in a not-so distant future, there exists an opportunity in the problem to build large water reservoirs to avoid catastrophic situation five years from now. This will present Pakistan with the chance of generating hydel electricity and reduce the country's reliance on largely imported thermal electricity generation.
But, it is rather a shame that no concrete steps have been taken in this regard so far. Rather all what the government did was to take a step back when it announced the rolling back of the Kala Bagh dam. Common sense needs to prevail if the country must produce sufficient electricity in the future at relatively cheaper rates.
Another problem is that of inefficiency - which ranges from plants to the billing collection system - all of which adds to the worrying situation in the power sector. Firstly, a vast majority of power plants operating in the country run on less than optimal level and the average capacity utilisation according to the industry sources is merely 34 percent.
The reason for such inefficient plants is that not enough investment has been done in the power plants which were originally imported from Western countries and were considered old even at the time of installation here in Pakistan. Their inefficiency does not only lead to the failure in meeting the electricity requirement but also leads to heavy consumption of the imported furnace oil and the precious natural gas - hence resulting in higher tariffs.
Then there is the devil of transmission and distribution losses that is the major cause behind the massive load shedding leading to industrial losses and social unrest. The fact that the infrastructure set-up of the power distributers is not up to the mark, hurts the IPP's as 20 percent of what they produce is lost on its way.
Although, the official numbers show a gradual decline in transmission and distribution losses, but those close to the industry reveal that the actual picture is much worse and the losses range somewhere between 30 to 35 percent. Then there is a lot of electricity being stolen from the system that cannot be billed hence resulting into huge operating loses for the power distributors.
There is no other solution to this problem than to take strict actions against the culprits, which is only possible if the government intends to act against them. But the dilemma is that in most cases, even the known culprits cannot be put to trial so easily because of the lack of political will.
Finally comes the inefficient billing collection system as a large number of customers specially those having strong links in the set-up delay their payments to the distribution companies, which in turn reduces the IPPs' ability to procure furnace oil and thus a power shortfall. This is where the vicious cycle of circular debt starts and adversely affects the economy.
The government therefore, needs to be proactive in this regard and must find ways to provide continuous power supply. The hastily arranged RPPs won't serve the purpose because of the controversies surrounding the issue. There is a dire need that the government accepts its failure to fulfil the promise of a load shedding free country by the end of 2009, and instead of coming up with excuse, it should formulate a sound long-term strategy to ensure cheap electricity to the end users.
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Electricity balance
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Unit: Gwh
FY03 FY04 FY05 FY06 FY07 FY08
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Generation 76,582 80,827 85,629 93,629 98,213 95,661
-Hydel 22,351 26,944 25,671 30,862 31,953 28,707
-Thermal 51,591 52,122 57,162 60,283 63,972 63,877
-Nuclear 1,740 1,760 2,795 2,484 2,288 3,077
Supply 72,699 77,862 82,365 90,109 94,623 92,142
Consumption 52,665 57,491 61,328 67,603 72,712 73,400
T&D losses 20,043 20,371 21,037 22,506 21,912 18,742
T&D losses as % of supply 28% 26% 26% 25% 23% 20%
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