Wrong power policies

NEPRA report shows that government policies are harming the consumer

NEPRA’s special report on generation sector challenges indicates that the favourite whipping boy for the high price of electricity, the IPPs and the capacity charges they have to be given, is not so much to blame as the government’s incorrect power policies. The biggest problem is caused, according to the report, by the desire to ensure availability of power to meet peak demand. The report finds that this peak lasts only a few hours a year. Because of this, there has been over-investment in generation. That has meant that not enough investment has gone to transmission and despatch, with the result that while there is sufficient, even excess, generation capacity, there is often no way to transmit that power generated to the end consumer.

One major problem thus created has meant that loadshedding is continuing, while the technical and commercial losses continue, which plague the system and which the distribution companies have proven completely unable to tackle. The report notes that the losses are primarily driven by widespread electricity theft, facilitated by weak oversight. Though the report does not say so in so many words, this indicates that NEPRA’s constant exhortations have not ended the endemic corruption in the DISCOs. The report also highlights certain other problems, the first being the under-utilization of That coal. Though Thar coal is polluting, setting up additional thermal generation is also polluting. That coal does have the advantage of being indigenous.

However, the government is not doing enough to let rooftop solarization proceed, even though it involves zero-losses and absence of capacity payments.  Of course, the report does not mention that solarization means the consumer does not need to pay anything to the DISCO officials. Solar power also means power plants, and their attendant over-invoicing, will not be built. The captive market for furnace oil, that generation plants provide, will not be built. While this will create a problem for oil importers, it will also mean that the country will have to import less. NEPRA seems to have realized that the future is in renewables. Solar power also has the advantage of generation costs that can be localized. Gone are the days of huge generation plants, and the attendant problem of transmission and distribution.. The change in the mode of power production has provided the country with an opportunity, because while it is backward in solarization, so is the rest of the world. That means that it is equal to the developed world t least in this. Only NEPRA seems to recognize this.

Editorial
Editorial
The Editorial Department of Pakistan Today can be contacted at: [email protected].

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