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August 20, 2020

Speakers stress uniform power tariff policy

Lahore

August 20, 2020

LAHORE:Speakers at Jang Economic Session have said that there should be one tariff policy across the country for all electricity consumers.

They said distortions in rates should be eradicated and the issue of governance should be resolved in energy sector by creating a single department headed by one person who will be answerable and responsible for all energy matters including power, gas, petroleum and other sources of the energy instead of different ministries. They said more attention should be paid to K-Electric so that service delivery issues may be resolved and customers may be assured continuous supply of power at a uniform electricity rate.

Presently Karachi-based customers are receiving power at upto Rs 2.89 less than the rest of the country which is not only a violation of the country’s Uniform Tariff Policy but also unfair to industries operating in the rest of the country. The decision of unbundling of the Wapda was proved wrong so it is needed to revisit it. Additionally, private sector should also be allowed to deal with private sector for energy generation and sales to each other instead of involving the government. The alternate energy sources including solar and wind should also be given priority alongside with the hydro and coal power generation to utilise full potential of available natural resources of the country, the speakers presented these recommendations at Jang Economic Session on ‘Affordable Power under Uniform and Consistent Policy’, here.

The moderator of the discussion was Sikindar Hameed Lodhi while the session was addressed by Chairman Wapda Lt-Gen (Retd) Muzamil Hussain, Former Chairman Wapda Lt-Gen Retd Zulfiqar Ali Khan, President Lahore Chamber of Commerce (LCCI) Irfan Iqbal Sheikh, former president LCCI Almas Haider, Energy Specialist the World Bank Sadia Qayyum, Energy Expert Omer Malik, Former Regional Chairman Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Manzoor Malik, and Economist Dr Huzaima Bukhari.

Wapda Chairman Muzamil Hussain said the current government mainly focused on hydro power generation projects while 10000 mega watt hydro power will be added to the system by year 2030. Currently work is under progress on 4500 mega watt Diamer Bhasha Dam, 4300 mega watt Dasu Dam and 800 mega watt Mohmand Dam, he said and added that Wapda adopted innovative financial models for the completion of the mega hydro power generation projects and minimum burdened was put on the national exchequer. The Wapda has generated its own ingenious resources, alongside local and foreign funding for the completion of these projects, he added.

Muzamil Hussain said that during the last two years Wapda completed 3 big hydro power generation project which added 2487 mega watt into the system which increased the total hydro power generation capacity of Wapda to 9389 mega watt. These projects are Neelam Jhelum, Golan Goal and Tarbela Extension (IV). He mentioned the country have capacity of 100000 mega watt hydro power generation capacity out of which 43,000 mega watt alone available on Indus cascade.

However, unfortunately in the past the successive governments remained dependent on imported oil and gas sources which increased the cost of electricity. There is a need to change the energy ratio from thermal to hydro to bring down its cost alongside integrating the electricity system, he said.

Former Chairman Wapda Zulfiqar Ali Khan endorsing the view point of sitting chairman mentioned that according to the energy policy of 2001, it was planned to generate 25000 each from hydro and coal generation under vision 2025. Both of sources are indigenous and cheap but abandoned. He insisted on adopting the same energy policy and handing over the mega coal and hydro power generation projects to China under China Pakistan Economic Corridor (CPEC) project as Chinese have capacity and experience of energy generation from the both sources. He said that these projects should be made with government to government agreement (Pakistan-China governments) instead of focusing on small projects.

On the distribution losses of 35 percent, Zulfiqar Ali Khan believed that it was not losses rather the electricity theft which only possible with the connivance of the distribution companies staff while the consumers are paying the cost of this theft in the name of losses. Further, due to this theft they also suffer the loadshedding which could only b controlled through stern action and punishment to the employees involved in the heinous crime. There is no justification of power outages when the country has surplus electricity production capacity, he added.

President LCCI Irfan Iqbal Sheikh said that cost of elasticity in Pakistan is 16 percent per unit as compared to China 6 cents and India 8 cents which makes the export uncompetitive in the international market. The cost of doing business is very higher than rest of the world due o wrong energy mix, he said, adding that current energy mix is around 25 percent hydro and 75 percent others (mainly thermal) which need to change to 75 percent hydro and 25 percent thermal. Further, there is need of unified tariff across the country as Karachi based businesses enjoy Rs 2.89 per unit lower tariff rates as compared to the rest of the country.

He stressed the need of making investment in solar power generation and making easy policies for it. He commented that country could not progress without rationalize tariff, cheap solar and hydro power generation.

Former President LCCI Almas Haider said that government could bring down the IPPs cost by 10 to 15 percent by doing all negotiations but it could not impact the way it can bring down cost of energy by controlling line losses.

Further, Pakistan spends around 3$.5 billion on import of oil and RLNG for energy generation which creates current account deficit and it reduce it than the issue of current account deficit could also be managed well and make the energy affordable and addressed many other economic issues, he added.

He suggested that instead of importing oil and RLNG to produce electricity government should bought power from Iran. He said government paying Rs 1100 billion capacity charges to the IPPs annually which could be save by allowing the private sector for small 10 to 20 mega watt solar power projects in the nearby of the different cities without licensing.

He suggested focusing on hydro, coal, nuclear, solar and wind power generations sources instead of thermal generation. He asked the government for providing cheap and special tariff to all industry instead to five sectors only as these five sectors could not brought industrialization in the country while available electricity cost could not be recovered from selling it to domestic consumers on high rates. Energy Specialist the World Bank Sadia Qayyum said that Pakistan remained focused on imported fuel base energy which cost high. She mentioned that cost of energy generation in Pakistan is 8 to 9 cent per unit as compared to India of 5 cents only.

Energy Expert Omer Malik stressed the need of making process of licensing and registration of solar power generation easy, besides allowing the private to private sales of solar power generation to commercial and industrial consumers to make the sector competitive. He said the cost of solar power generation is 6 to 7 cent while the private sector should be allowed and encouraged the wheeling of solar power generation in the system or on the other sites by using the distribution system. He asked the government to allow private sector to buy and sell power from other private sector besides giving a clear policy and agenda by setting a target of permitting 100 to 200 mega watt of power purchase and sales by the private sector with each other.

Former Regional Chairman (FPCCI) Manzoor Malik said that if the government could not ensure the power supply then give free hand to the industry to search cheaper energy sources with sustainable availability. He stressed the need of using biogas, agriculture wastage and other cheap indigenous energy sources for the power generation. He said despite lockdown industry was not getting 24/7 electricity while corruption prevailed in the system so deep rooted that even a announced power shutdown of 3 hours could be managed through using unfair means. He asked inclusion of the local stakeholders in the Board of Directors of the distribution companies to resolve the issues at local level. He also asked incentivizing and lower tariff to the local industry which can produce import substitute products to make them competitive with cheap imported products for industrialization.

Economist Dr Huzaima Bukhari said that bad governance along with the technical issues was highlighted by the Chairmen Wapda was one of the major concerns of high electricity tariff in the country which should be addressed on priority. Further, she said that concept of right man for right job was ignored which affect the efficiency of the organisations. She also asked for tariff rationalisation and questioned the collection of TV fee from the public through electricity bill.