A
shortage of electricity means children cannot study at night, people cannot run
businesses during the day, and clinics and hospitals cannot provide health services.
The energy crisis that has lingered on over the years has not only affected the
daily life of the people of Pakistan, it is also hindering the overall
development and progress of the country.
Power
failures gained momentum towards the end of the Musharraf regime, when
load-shedding exceeded over 2,000 megawatts (MW). This had happened for the
first time in history, after an extraordinary period that saw Pakistan with
surplus electricity from the late 1990s to 2004-05. The power deficit soon
crossed the level of 6,000MW during 2011-12, and has only worsened since. In
May, this year, this shortfall surpassed 7,000MW.
Currently,
Pakistan has an installed electricity generation capacity of about 19,500MW.
Hydel power generation accounts for about 8,000MW, whereas the remaining
11,500MW is dependent on thermal power plants which use natural gas or furnace
oil.
One
of the major reasons for the severe shortfall is a reduction in the supply of
natural gas for electricity generation. A reduction of nearly 33% over six
years has been observed due to the unprecedented allocation of natural gas to
other sectors. Electricity generated from natural gas, which stood at a peak of
43,472 gigawatt hours (GWh) in 2005, declined drastically to 25,879 GWh in
2011.
The
lack of transparency and accountability, maladministration in generation
companies and the National Electric Power Regulatory Authority, a frail transmission
and distribution network, inefficient electricity production through fossils
fuels, outdated policies, chronic line losses and power theft are other
contributing factors responsible for the crisis in the power sector.
This
persistent shortage of electricity has adversely affected the economy.
According to the Planning Commission of Pakistan, total accumulated circular
debt for fiscal 2013 is around Rs742 billion; whereas each month around Rs30.5
billion is added to circular debt on account of the tariff differential subsidy
and other cash flow issues.
This
huge burden on the public exchequer is largely due to misconduct and
misgovernance of power sector companies and basic structural impediments
throughout the sector. In addition to that, power shortages have resulted in an
annual loss of about 3-4% of GDP, which is alarming. Meanwhile, around 10% of
the labour force has been either unemployed or laid off.
Although
installed generation capacity is greater than peak summer demand, exorbitant
production costs makes the electricity unaffordable for domestic consumers and
uneconomical for commercial uses.
It
is a proven fact that access to sustainable energy boosts economic growth
dramatically and directly improves the lives of the poorest and most vulnerable.
According to estimates, for every 1% of GDP growth in Pakistan, an increase of
1.25% in electricity supply is required. However, there is dire need of
continued investment in the power sector to achieve sustained economic growth.
If done right, sustainable power can be made available because Pakistan has
huge hydro and thermal energy reserves.
It
is commendable that PML-N leadership has identified increased access and more
reliable electricity as a key priority to build a brighter future. Now it is
the government’s responsibility to measure up to the expectations of the people
of Pakistan for what has been promised.
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