Wednesday June 29, 2022

The energy mess

By Editorial Board
April 28, 2022

The energy crisis Pakistan is grappling with currently was not born yesterday. This critical sector failed to draw the attention it deserves in the several weeks leading up to the change of guard at the centre. We have been facing a 'surplus-deficit syndrome', disrupting natural gas supplies and periodically turning the scarcity of petrol, diesel, and other liquid fuel into a crisis. Electricity generation has become smoother to some extent in the recent past, thanks to capacity additions during the last rule of the PML-N and operational improvements in the PTI government. In this backdrop, things looked quite under control early this month as power distribution companies issued load management plans for the month of Ramazan, outlining zero outages for most consumers except for four-hour daily power cuts for areas with high losses.

And yet here we are: facing a full-blown power crisis as well as diesel shortage -- hitting the country virtually from nowhere. Into the third week of the new government, power suspensions have gradually multiplied and now even urban areas are feeling the heat of power outages every half hour during the peak demand period. With no availability of official power demand and supply data, it is estimated that peak unconstrained electricity requirement ranges between 5,000MW and 7,500MW, translating into 6-14 hours of unannounced loadshedding daily. Should we hold gaps in supplies of primary fuels like natural gas, RFO (residual furnace oil), or coal responsible for these crippling blackouts or is it merely a typical case of bad governance? Who is to blame for this mess -- the ousted PTI government, the evergreen energy establishment consisting of the civil bureaucracy and management running generation, transmission and distribution network, or the new government? The fact is that high electricity demand due to the early arrival of summer, an out-of-control power sector circular debt, a significant dip in hydropower generation owing to low river flows, and abnormally high LNG and coal prices in the international market have all contributed to the ongoing power crisis. There are still those that believe it could have been managed better had things been handled professionally by the energy establishment right from the transition period.

Since LNG and coal cannot be imported in just a few weeks, one simply can't think of what else the present regime can do to put an end to the menace of prolonged outages by May 1, as ordered by Prime Minister Shehbaz Sharif. One positive step has been to ensure that out of the 27 power plants that had not been working for over a year, at least 20 have been made functional. Experts, however, say only an improvement in hydropower with expected surge in river flows can help rescue power managers. If this is indeed just a governance issue, why was it not dealt with in a professional way? Should there be an inquiry against the criminal negligence that has plunged the whole country into darkness amid a searing heatwave? Meeting electricity demand of 18,000MW-20,000MW should not be a big issue given the 35,000MW plus installed generation capacity even without a major decline in hydropower and other factors. Still in the worst-case scenario, outages should have been kept at a manageable level of 2-3 hours in urban and 4-6 hours in rural areas on a daily basis. The cost of power has already become unbearable for consumers. With the recent purchase of the 'costliest' LNG cargoes and an understanding with the IMF to pass on generation cost to consumers, the per unit cost of electricity is bound to increase further, adding to the backbreaking burdens the people are bearing already. The government has a tough task ahead: bring power back, deal with the IMF, and figure out how to appease an overburdened people.