Power surplus: boon or bane?

Pakistan is to have surplus power after November. News reports say that. Don’t expect corrections when it does not happen. In all fairness, Pakistan may actually have a power surplus for a brief while these winters, but surely that is about it. That too, seems not so easy, given how hydel generation falls in winters. But even if there is one, no way is it stretching beyond winters.

But if the ‘sources’ really do know something that we don’t (and they must since power generation data is no more made public), then they should actually be more worried than rejoicing. That is primarily because the system to transmit all this surplus power is not really in that great a shape.

Recall that the transmission system almost crippled last summers in an attempt to carry ‘deficit’ power. Shudder at the thought of how it will do when it is in ‘surplus’. Nepra in its last report on the state of industry had made frank observations on the ailing transmission network and how it needed a massive overhaul to be able to carry more load.

Not that the authorities have not been working on the transmission system, but the progress seems to be too little too slow, especially when seen in the context of generation addition. The two major transmission lines Nawabshah and Matiari have seen delays and won’t be completed before at least 2019. And that too is only good to cater the demand that is projected on the lower side by Nepra.

There is also a little matter of Rs720 billion as outstanding amount for distribution companies’ billing and that of Rs321 billion for generation companies on discos’ behalf. All this while oil prices, CPI, and US dollar have remained rather stable and on the lower side. At least two if not all three variables are only expected to go north from here, and that could really be quite some headache managing payments (read circular debt), with all the new power plants.

Another matter of capacity payments may also have a say in matters of inflating payments, in case of a surplus. Latest numbers on discos’ performance are not very heartening, and the T&D bleeding continues. Recovery is also far from ideal. Combine it with an ailing transmission network, and you would rather be worried than happy on more power from November. High time, structural issues get as much importance as generation.