Power supply shortfall
The power supply shortfall has reached to a record high of 9000 megawatts (MW), leading to prolonged power outages in the country. The situation has exposed the often repeated claims of the Pakistan Muslim League Nawaz (PML-N) to have brought massive turn around in power fortunes. Former Prime Minister Shahid Khaqan abbasi had claimed on May, 30 ahead of his tenure end that government had added 11,461 MW power generation capacities from new resources. He had also told that electricity demand in June would stand at 22,538 MW against the total expected generation of 22,178, registering a shortfall of 362 MW.
During a press conference a few days ago, caretaker energy minister Ali Zafar also claimed that the average power shortfall is 2000 MW, which is the result of dropping water flows in the rivers. He disclosed that the weak distribution and transmission system is not picking the additional power generation. He also said that the situation would improve within the next few days but it worsened.
According to available data, power demand on Monday stood at 25,044 MW against the supply of 15766 MW that led to the extended power outages across the country. A load shedding of 4 to 17 hours is being carried out nationwide and frequent tripping of feeders disrupting power supply has become a daily feature. The provinces of Sindh, Khyber Pukhtunkhwa (KP) and Baluchistan are the most affected federating units by increasing electricity deficits. Almost 90 percent of domestic consumers in KP have switched over to solar systems in rural areas, whereas water supply system is largely based on solar tube wells and water pumps run by small gas generators, saving the people from Karachi like drinking water crisis. Likewise, government schools have solar systems installed for electricity supply, greatly reducing their dependence on the high cost electricity provided by Peshawar Electric Supply Company (PESCO).
There are multiple reasons of power outages which include faulty transmission lines, obsolete control system, nonpayment of circular debt and electricity bills default of Rs. 851 billion by politicians, influential businessmen, industrialists, federal and provincial government departments. The Economic Coordination Committee (ECC) meeting held in May PML-N government economic managers had acknowledged that financial position of power sector was critical because of host of reasons. These include unsatisfactory performance in terms of regulators benchmarks for lines losses reduction and improvement in recovery, unavailability of subsidy, delay in detailed tariff determination, which has now been notified but its benefits would start emerging in the next few months. The ECC was also informed that higher energy sales due to a significant increase in generation base also contributed to circular debt.
The power division has spent Rs. 93.5 billion over the last five years to improve the power distribution and transmission system network that could not bear the electricity load. Up-gradation work has been completed on 748 Km transmission lines of four 500 KV grid stations and 2293 Km transmission lines of 13220 KV grid stations. The transmission network is spread over 5772 Km for 500 KV grid stations and 10523 KM for 220 KV grid stations. World Bank has approved a soft loan of $ 421 million for rehabilitation of 131 Km transmission lines and modernization of four 500 KV and 8 220 KV grid stations. However, the government could not get the promised Chinese loan of $ 1.7 billion for Mitiari –Lahore transmission project under the CPEC framework and it has been delayed for three years.
The PML-N government after assuming power in June 2013 had announced to establish a mechanism of federal adjuster for at source recovery of utility bills arrears from provinces and federal government departments but the proposal did not materialize. Likewise, no action was taken for the recovery of electricity bills from the defaulter politicians, businessmen and industrialist with the result that electricity bills default swelled to Rs. 851 billion almost equal to the amount of circular debt.
The main factor of one trillion circular debt accumulations after the clearance of the entire circular debt of Rs. 485 billion in 2013 is the 40 percent capacity charges clause included in the agreements made with private sector power produces in the second Benazir Bhutto government. The government is bound to pay for the idle generation capacity of IPPs caused by short supply of furnace oil for which the government itself is responsible to make arrangements of imports through Pakistan State Oil. The power outages of longer durations is taking a heavy toll on the economy because of sharp decline in the productivity of agriculture and manufacturing sectors. The improvement, rehabilitation and up- gradation of distribution and transmission system should be completed on fast track.