Islamabad Policy Research Institute and LUMS Energy Institute organized a media event on “Radical Solutions to the Energy Challenges of Pakistan” on Wednesday.
The event had Sheheryar Omer- CEO of Petroleum Institute of Pakistan, Naz Khan- Strategic Division Head at K-Electric, and Fiaz Ahmad Chaudhry- Director LUMS Energy Institute as speakers.
Matters pertaining to figuring out the reasons of fossil fuels import bill standing at $26 billion were discussed. Depletion of all the indigenous energy resources discovered so far also came into discussion.
The speakers also spoke about how the energy demands are being met by importing fossil fuels. With the growing economy, the demand for energy fuels is also increasing. Also, due to inflated price of dollar, the import bill is high.
The speakers also discussed that although K-Electric is privatized, but it still has to face a lot of regulations and therefore, it can’t set its own tariff. Despite many regulatory challenges, the company has improved its customer service, reduced losses by half and improved bill recovery since its privatization. K-Electric is planning on adding renewables up to 30% of its power generation mix by 2030. Nearly all of the public DISCOs are incurring losses because of their poor governance and recovery mechanism. And therefore, investors are reluctant to invest in them.
Adding to that, the speakers also discussed that excess installed capacity is the driving factor behind growing circular debt in the power sector. We have failed to increase our base load in the last two decades as industry hasn’t shown any growth. In the last two decades our base load has increased from 7000 MW to 8000MV only.
In order to cater the energy challenges faced by Pakistan, the speakers recommended that there should be two-part tariff for the consumers. One should be related to the capacity payment and the other one should be related to energy payments. Adding to that, the refinery policy needs to be updated.
Moreover, the speakers recommended that there is a dire need to discover more oil reserves, move towards renewables, and convert the gas-based appliances into electric.
Furthermore, it has also been recommended by the speakers that the demand side management should be emphasized in order to decreased the peak load. Measures like energy efficient housing, and high-rise buildings can lower the peak demand.
Lastly, they recommended that at the moment, gas is being supplied at $2 per mmbtu to urban consumers, whereas the imported gas costs around $15 dollars per mmbtu. Therefore, gas prices should be rationalized.
