Power policy framework

Prime Minister Shaid Khaqan Abbasi chaired a meeting of the Cabinet Committee for energy in which appropriate amendments were decided in the power policy frame work. Renewable energy policy 2006 also came under discussion in the meeting and progress on the ongoing projects was reviewed and future projects were deliberated upon.

It is not yet clear as to whether the price of electricity will be lowered reasonably or it will be jacked up further in view of massive circular debt and oil shortage with the Pakistan State Oil (PSO) and other companies. The past experience and record high price of the Liquefied Natural Gas(LNG) point to the likely increase in the power tariff which will further stagnate the agriculture and manufacturing sectors and give a death blow to the foreign trade, aggravating the  already alarming current account deficit. The prices of energy inputs in Pakistan are the highest in the world because of shady energy procurement international contracts like the LNG import signed with Qatar, the document of which is not brought for discussion in the parliament.

The All Pakistan Textile Association (APTMA) and Textile Exporters Association (TEA) have demanded for bringing at par the prices of energy inputs with India, Bagldesh, Thiland and China to enhance Pakistan’s comparative advantage in the regional and international markets. The same demand has been put forward by the producers and exporters of rice, rice husking and cotton ginning mills besides manufacturers of engineering, sports and surgical goods. The price of electricity is Rs. 3 per unit in Bangladesh; in India Rs..5, and in Pakistan it is Rs. 25 for consumers whose consumption is above 300 hundred units. How our finished industrial products and primary commodities can compete with fairly cheaper ones of other countries? Not a single cotton plant is grown in Banladesh but it fetches $ 27 billion from export of cloth and ready made garments which is more than the value of Pakistan’s total exports despite the fact that best quality cotton is grown in our country. Likewise, the LNG tariff in China is $ 6 per BTU; in India is $ 7, and in Pakistan is $ 11 per BTU. The countries which import LNG from Qatar intend to revise their contracts for lowering its price whereas the government of Pakistan is not willing to make public the LNG deal with Qatar.

The country has a tremendous potential of renewable energy sources like hydro, wind and solar power generation. But the skewed preference for the costly and health hazardous thermal power generation is the main obstacle in the way of deriving the desired benefits from  hydro, wind and solar energy to achieve an optimal mix and substantially bring down the electricity tariff for the domestic, commercial and industrial consumers. The present proportion of costly thermal power is 70 percent in the total power generation which is the major cause of power theft, high production cost in the agriculture and manufacturing sectors. As the construction of big dams does not seem possible in the near future hence priority should be given to small dams and hydropower stations thereon. The previous provincial government of Khyber Pukhtunkhwa forwarded a number of projects of 100 plus mega watts, with total capacity of 2100 megawatts of power generation, to the federal government in 2012. But the present federal government approved only one project of 117 megawatts in Chittral. These feasible power projects of KP have a comparatively shorter period of completion which will help restore the balance between hydro and thermal power generation enabling the government for downward revision of power tariff.

The share of wind power is hardly 1.2 percent in the power whereas great potential for cheap its generation is available in the provinces of Sindh and Baluchistan which need prioritizing in the decision making of the federal government. The pertinent question is as to why the previous and present federal governments did not opt for exploiting the renewable energy resources and could not prepare a long term energy policy for inexpensive power generation? The way out lies in a comprehensive energy policy by giving more wastage to renewable energy resource exploitation.