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BR Research

A rental a month won fix it

Published May 26, 2010 Updated May 26, 2010 12:00am

Come 2020 and Pakistan will have doubled its power generation capacity to 40,000 MW. So tells the vision statement on power sector announced by the Prime Minister, promising an energy revolution in Pakistan in the years to come.
Nothing wrong in setting a target as optimistic as this; except that the road to power vision 2020 if it can be named that, is very much like a typical 20-20 run chase of the Pakistani cricket team which is often ill-planned, stutters in middle and more often than not fails to reach the target initially set.
Whether or not the 40,000 MW target set is realistic is another debate, but that it lacks direction and a proper guideline is quite relevant. All what the power vision talks about is doubling the generation capacity without a mention of how this will be achieved.
The vision lacks focus on improving the energy mix. Though there is no specific mention of what the energy mix is going to be, a hint could be taken form repetitive mentions of additional IPPs and of course, rental power plants.
Ever since the exit of Shaukat Tarin, criticism on rental plants has taken the back seat, making it easier for the government to go about aggressively with its plans of renting expensive electricity and making capacity payments whether or not electricity is actually produced.
Raja Pervez gleefully announced the other day about the planned inauguration of a new rental plant every month. Mind you, not long ago the Asian Development Bank recommended the government to proceed with only eight RPPs instead of the earlier planned fourteen.
However, it seems quite likely that someone is too keen to go ahead with all 14 RPPs against the ADB recommendation, as the Water and Power Minister plans to add another 3,000 MW to the national grid by the end of this year.
Disappointing is the fact that the power vision fails to place the required emphasis on the use of readily available indigenous resources for power generation. There is no timeline regarding construction of additional dams - small or big - to improve the energy mix, especially when the aim is to reduce carbon emissions.
Similarly, the vision hints at nothing to believe that the government is actively pursuing coal based electricity generation, without full exploitation of which, achieving the target of 40,000 MW would remain a distant dream.
What is of important note is that the vision is all about enhancing the capacity, not the generation. It is an open secret that poor efficiency of power stations is the single largest problem behind electricity deficit which needs immediate resolution.
Unfortunately however, there is little to suggest that the government is moving in the right direction towards efficiency improvement as rapid addition of decades old rental power plants, if anything, will add to the inefficiency.
There needs to be an objective analysis of the problem and practical solutions to it, which include improving the infrastructure and billing collection system, and achieving the right energy mix by exploiting indigenous resources. The realization needs to set in that chasing the target based on thermal generation will be a futile exercise.

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