Government at both the centre and provincial levels is apparently making a last ditch attempt to contain the energy crisis, but the situation continues to unravel. It seems that the state apparatus is so incapable that despite surplus generation capacity, the country continues to suffer from the severe power crisis.
Economic Survey 2010-11 shows that the total installed capacity of Pakistan Electric Power Company (PEPCO) system is 20,681MW as of March 2010, while the demand is hovering around 17,000MW during this summer. It clearly indicates gross mismanagement in the energy sector as demand is still below 17.8 per cent of the installed capacity.
Figures illustrate that out of a total capacity 20,681MW, hydroelectric production is 6,555MW (31.7 per cent) and the thermal generation is 14,126MW (68.3 per cent). Out of 14,126MW of thermal power, 4,829MW is owned by ex-WAPDA GENCOs (power generation companies), 323MW by rental, 665MW by Pakistan Atomic Energy Commission (PAEC) and rest by independent power plants (IPPs).
Numbers show that the WAPDA, which owns 34.19 per cent thermal power generation, sticks out like a sore thumb as it is hardly producing 37 per cent of its installed capacity, while the much castigated IPPs are running on 75 per cent of their installed capacity.
Experts assert that energy shortage is a major impediment in the way of economic growth, which has compromised the competitiveness of the domestic trade and industry. They also point a finger at the national energy policy, as no major development has been witnessed in the power sector during recent years.
They maintain that economic managers in the country are vacillating in their policies. At one point in time they were advocating natural gas as the panacea to all ills, but in just a couple of years the same people have started claiming that the country is running out of natural gas, which resulted in the precarious situation we are in today; both power producers and industry are facing heavy gas load-management.
However, PEPCO officials are blaming mounting inter-corporate debt for the inefficiencies manifested in the power sector. Figures reveal that circular debt has nearly doubled compared to last year, which illustrates the magnitude of the crisis and the government’s will, rather lack of it, to resolve the burning issue. In addition, the government faces a mounting threat in ballooning oil prices buoyed by unrest in the Middle East.
The mess suggests that the state possesses neither the will nor the wherewithal to resolve the core problems plaguing the power sector such as heavy dependence on furnace oil generation, non-payment, low collection rates, power theft and high line losses.
Figures indicate that PEPCO’s total receivables are hovering above Rs252 billion, mainly due to lack of payment by the federal and provincial governments and their department, Karachi Electricity Supply Company (KESC) and Azad Jammu Kashmir government. In addition, the highest line losses ranging between 10.2 per cent in Islamabad Electric Supply Company (IESCO) to 38 per cent in Peshawar Electric Supply Company (PESCO) are adding fuel to the fire.
Energy experts estimate that one per cent loss during distribution costs the country dearly, around Rs5.6 billion, but no serious effort is being made to address this major issue. All political leaders, energy experts and economic managers are merely paying lip service; it seems that they are neither willing to correct the energy mix by reducing reliance of furnace oil nor are they interested in promoting the culture of sustainable usage.
The writer is Commerce Reporter, Pakistan Today