A balanced energy mix is essential

Prime Minister Shahid Khaqan Abbasi while chairing his first Cabinet Committee on Energy (CCoE) meeting stated that "our government is striving to achieve a balanced energy mix for the country's energy requirements." This statement is extremely critical as it acknowledges that Pakistan's existing energy mix disables the sector from providing the cheapest electricity possible that, in turn, has hindered the capacity of our productive sectors to compete in the international marketplace. Industry stakeholders told Business Recorder that electricity tariffs in Pakistan are 50 percent higher than other regional countries - a fact which accounts for their failure to compete internationally. Shahid Khaqan Abbasi holds the portfolio of the two ministries that he consolidated after taking oath as the prime minister notably the Ministry of Water and Power and the Ministry of Petroleum and Natural Resources; this was a long standing recommendation of international donor agencies as well as part of the PML-N 2013 election manifesto which, one may argue, uniquely places him in a position of not only being able to fully understand specific sectoral issues (premised on his holding the portfolio of the Ministry of Petroleum and Natural Resources for the past four years) but in his capacity as the chief executive also enable him to take appropriate timely decisions. The key question in this context therefore is: Can Prime Minister Abbasi revisit the energy mix?
There is absolutely no possible way that a prime minister for only the next 10 months at best would be able to revisit the ongoing energy projects (with gestation period of years not months) that have already been approved by the CCoE when it was headed by Nawaz Sharif of which he was, at the time, a member. The Prime Minister may have some flexibility in those projects that have not yet had a financial close or those where construction work has not yet begun but if the deals for those projects have already been struck with Chinese companies then too he is unlikely to be able to change these projects.
In addition, Shahbaz Sharif, Chief Minister Punjab, as a long standing member of the CCoE has remained visibly engaged in the sector that may further compromise the Prime Minister's ability to undertake a revisit of the energy mix. First and foremost, Shahbaz Sharif has naturally been focused on enhancing the generation capacity of Punjab and has taken some essentially technically flawed decisions that include setting up coal-fired plants in the Punjab which would require transporting coal from either Sindh (if indigenous coal is used) or the ports (if imported coal is used) which would play havoc with the environment. Coal-powered plants are established at or near a coal source globally precisely because of the difficulties involved in their transport long distance and the health and well being of those along the transport route. And secondly, Shahbaz Sharif has been focused on completion time of projects without taking account of a particular project's technical constraints - an example being the Nandipur Power Project.
With the elections scheduled for less than 10 months away there is a general consensus that Shahid Khaqan Abbasi's focus would be on ending load shedding and not quite on tariffs. Load shedding in Lahore, the heartland of the PML-N support, has risen in recent weeks due to, what Lesco officials maintain, is ongoing construction work including the Green Line. Unless the Punjab government agrees to arrest these projects, Lahore would continue to be subjected to heavy load shedding.
To conclude, Shahid Khaqan Abbasi's objective to balance the energy mix is commendable, however, he would not have the time or the resources to make a significant difference in this regard. His focus therefore would remain on ending load shedding to meet the one major PML-N 2013 election commitment.