The Ministry of Water and Power has launched a multi-pronged strategy to address the chronic problem of power crunch in the country, along with initiation of an "intellectual dialogue" with various media houses on the national energy conservation methodology evolved by the ministry.
The aim is to generate awareness about the energy problem that has not only caused a slump in our industrial productivity, job losses and a decline in exports, it has also generated deep social unrest across the country. The first such interaction was held at a Karachi hotel between the Pepco chief and heads of Gencos and Discos with senior staffers of Business Recorder-Aaj TV the other day. Load shedding, which Pepco prefers to describe as power management, has had a multi-faceted negative fallout for the economy.
The power conservation plan, as spelled out by Pepco chief Tahir Basharat Cheema, is hinged on three planks: distribution of 30 million CFL energy savers among consumers with the assistance of ADB; motivating the consumers to run A/c units at the minimum of 26 degree centigrade to provide ambient temperature rather than chilly indoors, which according to Cheema, can help save 800 megawatts; while avoiding use of heavy-load appliances during the peak hours can save another 1,000 megawatts, totalling 1,800 megawatts.
It will be recalled that 30 million energy savers were sold to power consumers last year which, it is now claimed, had resulted in an appreciable saving of energy, although load shedding had continued unabated.
According to the Pepco chief, the growth of power demand in developing countries normally ranges between two and three percent per annum, but in Pakistan - a "wasteful nation" - it went up to 15 percent in 2007, due to enforcement of a consumption-led and production-led growth strategy.
Like other power sector bigwigs, the Pepco chief too has recounted the planned hydropower and Thar coal projects, and said that after implementation of the new projects, including $9.8 billion Diamer-Bhasha dam, as much as 25,000 megawatts of electricity will be added to the national grid over the next 15 to 17 years.
At the meeting, KESC chief Naveed Ismail revealed that not a single megawatt has been added to the company's system since 1997, 13 out of 19 of its plants have outlived their sanctioned life span. Naveed Ismail has also revealed that power distribution in Karachi is mostly disturbed because of the tripping of feeders, as 80 percent of the feeders are overloaded.
Implementation of the three-pronged power conservation strategy, evolved by Pepco, can at best provide only a breather to the sector, and can hardly be termed a durable solution. Secondly, such PR exercises cannot serve as a substitute for fast-track development of power resources if our economic growth is not to suffer a further decline.
Pakistan has missed its revised growth target by a slight margin as the economy grew by 2.37 percent during FY2009 against the target of 2.5 percent, which had been agreed to with the IMF. The power sector situation has meanwhile become so critical that according to experts, even the scaled-down growth target of 2.5 percent would be hard to achieve.
Viewed in the overall perspective, such a public-relationing exercise, instead of serving a positive role in helping improve the power sector situation, is likely to lull the energy officialdom into equanimity, as it may start believing that an attractive wrapping can do the trick. Even otherwise, actions speak louder than words. Instead of engaging in such an elaborate PR exercise, the energy-related departments and agencies should focus more on fast-track implementation of power projects.
Incidentally, Pepco had recently advertised in the press that every month one power plant would come online until December 2009, while the ground realities project a different picture altogether. There are indeed a number of power plants in the pipeline, but most of these are encountering problems, and their completion might get delayed due to technical reasons.
There are said to be 1500-megawatt power plants under construction, which run either on furnace oil or on duel fuel. Meanwhile, from amongst the IPPs being processed by PPIB, 12 projects of 2,539-MW have already achieved financial close, while work is proceeding to achieve their COD targets during 2009-10.
According to the Minister for Water and Power, the private sector which has made an investment of $6 billion in the power sector, is managing 40 percent of the country's power demand, which represents a large, though very expensive share in power generation. Further, the government has to pay a subsidy of Rs 65 billion per annum to power consumers to cushion the impact of the rising power generation cost.
The monthly receipts of Pepco are said to stand at Rs 25 billion against an expenditure of Rs 38 billion, which represents a monthly deficit of Rs 13 billion. Obviously, Pepco needs to trim its hefty monthly deficit by cutting down inessential expenses, and also ensuring enhanced revenue collection.
Secondly, the current daily oil consumption in the power sector stands at around 30,000 tonnes, despite a shift of focus to gas as a fuel of choice. By pursuing prudent financial and management practices, Pepco can cut down its expenditure, which can also help it improve its financial position. There is no need for it to undertake elaborate PR exercises; all its needs to do is to improve its functioning.
