The abyss between the electricity supply and demand will persist in the next fiscal year, as the peak power sector demand is expected to increase up to 21,000 MW in the fiscal year 2011-12, says the Annual Energy Plan for next year, exclusively available with Pakistan Today.
The plan says capacity addition alone will not resolve the problem of load shedding, as the supply of primary fuel needs to be assured. The non-availability of fuel for thermal power generation is a critical factor in maintaining the economic growth and it seeks resolution on priority basis. Even the available thermal generation capacity cannot be fully utilised because of shortage of gas and furnace oil.
Recommending investment in transmission and distribution, the plan says it must be undertaken in parallel to the development of major power generation projects. And its urgency intensifies since the growth in electricity demand is putting the existing power transmission infrastructure under severe stress with frequent transmission bottlenecks.
On power sector reforms, the plan recommends— elimination of the tariff differential subsidy, strengthening of the Central Power Purchase Agency (CCPA) to ensure financial transparency and accountability. It also seeks complete transition to a single-buyer plus model that allows for direct contracting between DISCOs and GENCOs. This model will allow for inter DISCO trading of maximum demand limits to promote competition. It seeks revitalising of the privatisation programme for energy companies.
The plans submitted by the generation companies, GENCOs, Private Power and Infrastructure Board (PPIB) and Water and Power Development Authority (WAPDA) would provide only 2110 MW during the next fiscal year. While 1900 MW have been added under the PPIB programmes during the current fiscal year.
Power load shedding in the recent past is estimated to be around 25 percent of the system demand, and has led to a substantial decline in potential economic growth. Even though around 30 percent of the population has no access to electricity at all. This restricted access to energy combined with widespread outages aggravates the high poverty level in the country, it says.
The high fuel cost for thermal power generation, continued high losses in transmission and distribution, inefficiencies of generation, below-cost tariffs and non-payment of electricity dues by the provinces have resulted in a huge circular debt. The energy sector debt is threatening the entire supply chain from oil refineries, oil marketing companies to power producers.
It recommends strong monitoring at each utility level as well as at the central level will be established and a thorough master planning study will be conducted.
