IN a welcome development, Prime Minister Shehbaz Sharif on Monday directed the authorities concerned to take drastic measures to reduce per unit cost of electricity. Chairing a high-level review meeting regarding the power sector, he issued instructions for shifting of coal-run power plants from imported fuel to local coal, besides improvement in the power supply system. He said that in future, only clean, cost effective and renewable power plants should be set up in the country. The PM also asked for proposals for better utilization of the current surplus power generation capacity in industries.
There is universal consensus in the country that the existing electricity tariff is not sustainable and, in fact, it is a major hurdle in the way of socio-economic uplift of the country and its people. It is shocking that the cost of electricity generation and the tariff for domestic and commercial consumers in Pakistan was much higher than the global average. The tariff is frequently revised upward on the plea of reducing the so-called circular debt but the authorities have so far miserably failed to take genuine and concrete measures to tackle the menace. Corruption in fuel procurement, more dependence on costly fossil fuel for electricity generation, power theft and line losses due to obsolete transmission and distribution networks are some of the factors behind the messy state of affairs in the power sector. A shift from the imported to local fuel may have marginal effect on pricing but we can save huge expenditure and pass on the relief to the consumers if fuel intensive plants are converted into solar or wind power. This is what the world is doing now and according to the International Energy Agency (IEA), onshore wind is expected to have the lowest levelized costs of electricity generation globally by 2025. Recently the country signed a two hundred million MOU with a Chinese firm to convert a thermal plant to solar power. The project will upgrade an existing thermal power plant to a 300 MW solar power plant through the Special Investment Facilitation Council (SIFC). The direction of the Prime Minister that the auction process of those power plants of Power Generation Companies (GENCOs) that were lying dysfunctional and defective should be accelerated is also a step in the right direction as the country cannot afford the luxury of running such white elephants. Similarly, Pakistan has huge potential for hydel power, which remains untapped despite passage of 76 years and the two mega projects – Dassu and Diamer-Bhasha dam are not receiving the priority they deserve despite clear and significant benefits of their accelerated completion. Apart from availability of necessary resources for major reservoirs, provinces, which now have the power to set up their own plants, need to focus on small hydro-power projects that could meet local needs of far-flung areas without the need for extension of national grid to these areas. As the exorbitant electricity tariff is hindering industrial development, production and exports, the Prime Minister has observed that wheeling price of electricity should be reduced for the industrial consumers so that power supply at reduced price could be made possible, besides for the industrial development and increase in export, grid stations should be installed near big industries. Above all, what the Prime Minister wants to do to reduce the electricity bill for the common man is a long term project but people need immediate relief. For domestic consumers, who are usually receiving power bills more than their family income, the Government should immediately launch a nation-wide programme for provision of solar panels on subsidized rates as is being done by the Punjab Government. Under pressure of the International Monetary Fund (IMF), the Government is taking away subsidies from all sectors but subsidies for the power sector would not go waste, rather it would facilitate growth and development. It may also be pointed out that all upward revisions in the prices of POL products, as has been done during the last two fortnights, put additional burden on electricity consumers in terms of fuel price adjustments and quarterly adjustments. It is time to adopt a holistic approach to address the challenges facing the power sector as a piecemeal approach is sheer wastage of national resources.
