March demand down 7.5pc: Govt mulling options to boost power consumption

ISLAMABAD: The government is considering different options to increase electricity consumption in the country as it has witnessed 7.5 percent decline in demand in March 2024 in consumer categories including industry as compared with reference and actual patterns of the same month of the previous year.

These remarks came from Chief Executive Officer (CEO), CPPA-G Rihan Akhtar during a public hearing in NEPRA on proposed positive adjustment of Rs 2.94 per unit for March 2024 to recover additional amount of Rs 22.8 billion from consumers.

The Authority comprising of Chairman Nepra Waseem Mukhtar, Member (Technical) Sindh Rafique Ahmad Shaikh(online), Member KPK Maqsood Anwar Khan and Member (Law) Amina Ahmed officiated a hearing in this regard.

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Member Technical, Rafique Ahmad Shaikh raised different questions with respect to reasons for the decline in consumption, constraints, net metering, discrimination with some cheap coal-fired plants vis-à-vis expensive power plant and future strategy to enhance demand.

Arif Bilwani, a Karachi-based businessman, in his comments said that demand is continuously on the decline every month especially in industry. He enquired about any possibility for a package for industry to enhance electricity consumption as the country is trapped in capacity issue badly. He queried as to why Power Division is not taking this initiative which will help consumption of existing generation capacity.

Arif Bilwani suggested the government review IGCEP (Indicative Generation Capacity Expansion Plan) in light of current power consumption pattern in the country, suggesting that inclusion of new projects in the system should be reassessed until the country is able to utilize available capacity. For this, there is dire need to improve transmission and distribution network through investments.

Responding to questions, CEO CPPA-G Rihan Akhtar said that decline in demand is a major concern in the sector and government at each level including at a high level, is very conscious of this and is working on multiple options.

He said, the new IGCEP, which is at formulation stage, has been altered in accordance with the current demand scenario and future requirements of power in the country.

He further stated that there are concerns on transmission system of the country, adding that this time Transmission System Capacity Expansion Plan (TSEP) will also be notified.

Wajid Chatha, representative of National Power Control Centre (NPCC) shared the reasons for the operations of expensive RLNG power plants as compared to cheap coal generation, the logic behind Economic Merit Order (EMO) and justification of its violation occasionally. He also stated that due to substantial net metering in the country, it is mandatory to ramp up power plants for supply to the consumers when generation from solar system is reduced or becomes zero after sunset.

Clarifying the position, CEO CPPA-G said that a big rise has been witnessed in net metering in the country.

“Net metering was in the system but its impact was not as much as is today. Discos which are dealing with net metering should undertake studies to deal with the supply side after sunset on their 1100 kV systems,” he added.

Rihan Akhtar further said that recommendations from Discos should come to the Ministry that their Time of Use (ToU) pattern be revised in accordance with current scenario. He said Guddu’s per unit cost is Rs 3.5 higher than combined cycle power plant, the total cost of which Rs 580 million.

During the hearing, CPPA-G representative noted that overall average electricity demand declined by 7.5 percent in March 2024 of which domestic share was 11.3 per cent, commercial 2.8 per cent, industry 4.5 per cent and bulk consumers (housing societies) 34.7 percent. In March, import from net metering was 55 million units.

It was further noted that weather patterns have changed due to which consumption pattern is also different. CPPA-G stated the cost of FCA was the same in March last year but the components of RLNG and coal are more expensive and if one includes previous claims of about Rs 7.5 billion, already verified by the NEPRA team, the cumulative effect on FCA is greater.

Copyright Business Recorder, 2024