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February 25, 2021

Pakistan faces unexpected dilemma of too much electricity

National

February 25, 2021

KARACHI: After suffering decades of electricity shortages that left families and businesses in the dark, Pakistan finds itself with a new problem: more electrical generating capacity than it needs.

Large-scale construction of new power plants - largely coal-fired ones funded by China - has dramatically boosted the country’s energy capacity. “It’s true. We are producing much more electricity than we need,” Tabish Gauhar, a special assistant to the prime minister on power, told the Thomson Reuters Foundation on phone. But even as supply surges, electric power is still not reaching up to 50 million people in Pakistan who need it, according to a 2018 World Bank report, though expansion of transmission lines is planned. Power outages also remain common, with a transmission problem just last month leaving many of the country’s major cities in the dark.

Excess fossil fuel energy capacity also is boosting electricity costs - and raising questions about whether the country will now manage to achieve its climate change goals, with scientists saying coal needs to rapidly disappear from the world’s energy mix to prevent the worst impacts of climate change.

Last year, Prime Minister Imran Khan promised that Pakistan by 2030 would produce 60% of its electrical power from renewable sources. Currently the country gets 64% of its electricity from fossil fuels, with another 27% from hydropower, 5% from nuclear power and just 4% from renewables such as solar and wind, Gauhar said. The country has already scrapped plans for two Chinese-funded coal plants - but another seven commissioned as part of the sweeping China-Pakistan Economic Corridor (CPEC) project have gone ahead, and are expected to add up to 6,600 megawatts to the grid. China has also funded new renewable energy but at a smaller scale, with six wind farms set to generate just under 400 MW of power, a 100 MW solar project and four hydropower plants expected to produce 3,400 MW by 2027. CPEC aims to boost road, rail and air transport links and trade between China, Pakistan and other countries in the region, as well as boosting energy production. Vaqar Zakaria, the head of Hagler Bailly Pakistan, an environmental consultancy firm based in Islamabad, said Pakistan’s coal-heavy power expansion was in line with its own former national aims. “I think blaming China may not entirely be fair as setting up projects on local and imported coal was our country policy and priority,” he added. Officials at the Chinese embassy in Islamabad did not respond to calls and email asking for comment. As new largely coal-fired plants come online, Pakistan is expected by 2023 to have 50% more power capacity than currently needed.

Because the government must repay loans taken to build the plants and has signed contracts to buy their power, the overcapacity is producing costs “the government has to pay to the power producers under binding contracts, regardless of actual need,” Gauhar said. “Our fixed-capacity charges have gone through the roof,” he added.