THE remarks that Prime Minister Shehbaz Sharif made while chairing a meeting to discuss and evaluate future electricity and power plans of the country indicate that, at long last, the Government is on the right track as far as issues confronting the energy sector are concerned, especially with reference to the unbearable prices of electricity. He pointed out that globally, electricity is being produced from environmentally friendly, low-cost solar energy, he noted, adding that Pakistan was fortunate in this regard as the country had vast potential for solar energy. Instructions were also issued for shifting of the current electricity generation capacity on solar energy.
The directive of the Prime Minister for reduction in the electricity tariff came on a day when reports emerged that the Government was going to terminate agreements with six more Independent Power Producers (IPPs) involving saving of Rs. 300 billion. This is in addition to termination of contracts with thirteen companies after successful negotiations of the governmental task force with the concerned IPPs for the purpose. It is encouraging that more and more IPPs are agreeing to the forceful demand of the consumers that the agreements should be revised to the extent of capacity payment charges that account for Rs. 2000 billion financial burden on consumers. Now the stage is set for implementation of the PM’s directive for lowering the exorbitant prices of electricity to provide relief to consumers. However, it is also a fact that resolution of the capacity payment issue alone is unlikely to result in the reduction of electricity tariff as per expectations of the people, therefore, the Government will have to adopt a multi-pronged strategy to provide genuine relief to the masses. The emphasis of the Prime Minister on solar energy and directions to convert the existing capacity on solar is a step in the right direction. This is, indeed, good news for people of Pakistan who were utterly confused over contradictory statements issued by senior officials and ministers on the issue of promotion of solar energy as a sustainable solution to the energy woes of the people and the country. It was due to inability of the Government to rein in the continuous surge in the prices of electricity that families who could afford solar systems were opting for this solution successfully and the Governments of the Punjab and Sindh have initiated programmes for provision of solar systems to under-privileged segments of the society to help them address the problem.
However, some influential lobbies and beneficiaries of the existing moribund system were engaged in propaganda to influence thinking and policies of the Government vis-à-vis promotion of solar energy. Citing low demand of the grid electricity due to greater reliance of consumers on solar panels, these lobbies were urging the Government to revise tariff plans for solar energy to the disadvantage of people, who invested on new systems to save money. However, the elected Prime Minister seems to be more concerned about the woes of the people as he has not only underlined the need to give preference to alternative sources of energy, which are also environment friendly, but also given directions for conversions of the existing capacity to solar. It is also intriguing that the cheaper sources and newer technologies were being opposed by vested interests but the electricity is being produced through outdated plants. In this backdrop, the Prime Minister has ordered immediate closure of such outdated power plants adding that closing these plants would not only save valuable foreign exchange, but also reduce electricity costs for consumers. The focus on modernization and introduction of new technology in transmission and distribution systems will also go a long way in ensuring cost effectiveness, plugging leakages and providing quality service to consumers.
