Nepra raises alarm for reforms to avert power crisis

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has sounded alarm, revealing critical vulnerabilities in Pakistan’s power sector.

The evaluation reports for FY2023-24, covering generation, transmission, and distribution, expose a concerning mismatch between capacity and actual output, raising serious concerns about the sector’s ability to meet the nation’s growing energy needs.

The generation sector report reveals a worrying trend — despite an installed capacity of 45,123.9 MW, a significant portion remains underutilised. This underutilisation is exacerbated by an over-reliance on imported fuels like RLNG and coal, making several thermal plants vulnerable to global price fluctuations and jeopardising Pakistan’s energy security.

While renewable energy sources are steadily growing, their intermittent nature poses challenges for grid stability and cost-efficiency, further complicating the underutilisation issue.The report underscores an urgent need for strategic reforms to optimise existing assets, modernise the grid, and effectively integrate renewable energy sources.

The transmission sector report presents a mixed bag. The National Transmission and Despatch Company (NTDC) has made strides in improving system reliability, with reduced interruption durations and frequency. However, the report also points to significant constraints in the transmission system, hindering the efficient evacuation of power from cost-effective plants. This leads to increased reliance on more expensive generation options, ultimately impacting consumers.

Bottlenecks in transmitting power from the southern generation hubs to the northern load centres further exacerbate the issue. Adding to the woes are delays in critical transmission projects, which impact grid stability and capacity enhancements.

The report emphasises the need for grid capacity enhancement, adoption of modern switchgear, real-time monitoring, and improved project management practices.Amidst these challenges, K-Electric (KE) stands out with a relatively positive performance. The report acknowledges KE’s high reliability on its 220 kV transmission network and its significant efforts in enhancing cyber security defenses. However, KE faces challenges with tie line reliability.

Additionally, the report notes instances of transformer overloading, requiring KE’s proactive measures to prevent potential issues. Despite these concerns, KE’s overall performance, particularly its efforts to increase interconnection capacity with the national grid, offers a glimmer of hope for electricity consumers of Karachi.

Delving deeper into the reports, one finds a scathing critique of the Discos owned by the government. Nepra highlights their dismal performance, particularly in managing Aggregate Technical and Commercial (AT&C) losses. Lesco, Iesco, Mepco, Gesco and other government-owned Discos face scrutiny for their high losses, inefficient billing systems, and poor governance. These inefficiencies not only contribute to the sector’s financial woes but also impede its overall growth and modernisation.

Interestingly, the reports also mention the World Bank and the Asian Development Bank (ADB), both of which have expressed concerns over the performance of the government-owned Discos. The World Bank, in particular, has been vocal about the need for urgent reforms in the distribution sector, emphasising the importance of reducing losses, improving governance, and enhancing customer service. In contrast, the reports acknowledge KE’s efforts to reduce losses and modernise its distribution infrastructure, aligning with the recommendations of international organisations.