ISLAMABAD: Prime Minister Shehbaz Sharif has given his nod to transfer National Energy Efficiency & Conservation Authority (NEECA) back to Power Division from Ministry of Science and Technology (MoS&T), within four months ‘due to pressure of World Bank’, well informed sources told Business Recorder.
However, Prime Minister has directed Power Division to propose an amendment in the National Energy Efficiency & Conservation Act, 2016 to provide for a high-powered Commission as an inter-ministerial forum to spearhead serious energy conservation measures.
On April 16, 2022, Cabinet Division implemented the decision of the Cabinet; however, necessary amendment in the Rules of Business has not been conveyed as yet.
Recently, World Bank while reviewing Pakistan’s energy sector urged authorities to finalize Energy Efficiency (EE) Policy and National Electricity Plan and NEECA board should approve the Energy Efficiency Policy as soon as possible and subsequently it can be approved by Cabinet and then the CCI.
The Bank also stressed that National Electricity Plan be approved by Cabinet as soon as possible, adding that the EE Policy is important as it will revive the focus on energy efficiency which is critical in managing the cost to Government of electricity supply. More efficient appliances, building codes and materials, as well as, fuel efficiencies will lower peak demand (and thus the use of expensive fossil fuel) and will further reduce electricity costs for consumers.
NEECA transferred to Ministry of S&T
Opposing the decision to transfer from Power Division to MoS&T, World Bank said that the decision taken by the Cabinet Committee of Institutional Reforms to transfer NEECA from Ministry of Energy to Ministry of Science and Technology needs to be reviewed, as this could lead to uncertainties in the implementation of the policy. The Bank maintained that National Electricity Plan will improve upon the current practice of direct contracting and cost-plus tariffs that have historically led to high power costs and through competition will decrease power costs over time.
Interestingly, Power Division had earlier agreed to the proposal of Science & Technology Division for transfer of NEECA to that Division, prior to submission of summary to CCIR by the Science & Technology Division. However, a tug of war continued between NEECA and Ministry of Science and Technology on different issues since Imran Khan’s cabinet implemented the decision.
Power Division, in its summary to the Prime Minister, stated that the matter of transfer of NEECA to Science & Technology Division has been re-examined owing to certain fresh developments. The grounds for re-consideration are as follows: (i) Energy Efficiency and Conservation (EE&C) is a part of National Electricity Policy, 2021 being mandate of Power Division. Thus, the mandate of NEECA on EE&C is aligned with the subject of Ministry of Energy (Power and Petroleum Divisions); and (ii) the main purpose of transfer of NEECA indicated by the Science & Technology Division was that different technical initiatives of NEECA as specified in the NEEC Act, 2016 such as minimum energy performance standards, testing and building codes including the energy provisions are dependent on the Science & Technology Division and institutions under that Division particularly Pakistan Standards and Quality Control Authority (PSQCA).
However, as observed from the NEEC Act, 2016, NEECA has vast mandate pertaining to EE&C focused on policy formulation and implementation, energy audits, data collection, surveys, inspections, awareness, surveillance and monitoring, etc. in different sectors of economy, which are distinct and not dependent on Science & Technology Division or institutions under it, except the matters pertaining to formulation of standards requiring collaboration with National Standards Body (PSQCA).
Power Division further argued that globally, Energy Efficiency & Conservation organizations under government control are aligned with Ministries of Energy in both developing and developed countries alike as in the case of India, China, Germany, UAE, and Iran, etc.
On August 31, 2022 National Energy Efficiency and Conservation Authority Board of Directors approved “National Energy Efficiency and Conservation Policy 2022” aimed at steering the country towards a culture of conservation and efficient use of energy resources to achieve sustainable development. It sets the goal of “Double the rate of improvement in energy efficiency, ensuring cost-effective measures, and developing market-based mechanisms.” The policy extensively covers five sectors in the following priority, i.e., industry, transport, building, energy (Power and Petroleum) and agricultural sector.
Copyright Business Recorder, 2022