Power shortage costing economy $2.5 billion annually: experts

Experts at the 4th International Power Generation Conference 2011 said that the country's economy was facing huge losses of $2.5 billion per annum due to power shortage. The conference was jointly organised by Energy Update and Publicity Channel at a local hotel on Tuesday.
They said that power supply shortfall of over 5000MW costs 2 percent decrease in the GDP. "The loss of over 400,000 employments and decline of one billion dollar in our exports was also seen due to power crisis in the country," they added. They suggested installing more power generation plants in public sector and through public-private partnership. They also suggested to encourage the Hydel and Coal based power projects and to reduce transmission and distribution losses.
Zubair Motiwala, advisor to the Sindh Chief Minister on Investment, criticised the role of National Electric Power Regulatory Authority (Nepra) and suggested reconstitution of the regulatory body. He suggested Nepra should be reconstituted and it should have representations from consumers, corporate sector, a retired judge and energy expert as its members.
He said the future of country's economic growth was linked with power generation. "We have one of the biggest Thar coal reserve having potential to generate over 30,000MW power," he said. "We can also generate power through wind and other resources at cheap costs," he added. He pointed out that 25 percent of the country's exports were being exported in shape of raw material. "We can earn billion of dollars through value addition," he said.
However, he said, power is the main source for industrial expansion and uninterrupted power supply on affordable price is necessary for industries so that they could compete in the international markets. He said there was a need to increase dependence on hydel and coal power generation to improve energy mix and provide electricity to consumers at affordable rates.
President Byco Petroleum Business Marketing Kalim A Siddiqui also suggested to use coal for power generation to reduce cost in the country. He said the availability of uninterrupted power on affordable rates will make industry and exports competitive in the local and international markets. He said that the members of civil society, trade and industry and corporate sector should be member of regulatory authorities to properly protect the interest of consumers.
Ajaz Ali Khan, Secretary Coal Sindh and Managing Director Thar Coal and Energy, said that Economic Co-ordination Committee (ECC) of the Cabinet had approved the best ever internal rate of return (IRR) of 20.5 percent for coal projects. He said that Thar would become the hub of petrochemical industry in the region and there were plans to generate 10,000 megawatts of electricity from this lignite coal by 2010.
He said that the infrastructure development activities are in progress at Thar coal field as road network, fibre optic, power transmission line and high standard residential accommodation are in place and work on airport has been commenced by Civil Aviation Authority (CAA). Similarly, expression of interest (EoI) has been invited for four more blocks. He said that the bankable feasibility of Thar coal by Engro Power Gen Limited was ready.
Safeer Shah, Registrar Nepra in his speech said that the regulatory authority tries to maintain a balance between the consumers and the power producers and distribution companies. "Nepra is committed to protect the rights of both consumers and the power producers and it takes serious actions on any complaints against any stakeholder," he added.
He said that the Nepra's mission is to develop and pursue a regulatory framework for safe, reliable, affordable and efficient market-driven environment for provision of electric power to the consumers in Pakistan, maintaining a balance between the interest of consumers and service providers in line with the broad economic and social policy objectives of the government.
He said that Nepra was exclusively responsible to grant of licenses for generation, transmission and distribution of electric power. He pointed out that Nepra had so far issued 153 licenses to generation, transmission and distribution companies.
According to him major issues confronting power sector were availability and efficiency of existing power plants, circular debt, shift from low cost power generation (hydel) to high cost (thermal -RFO), transmission constraints, high losses in distribution companies, low revenue collection efficiencies and governance issues.
He said keeping in view the current power sector issues Nepra's recommendations were to encourage hydel and coal based projects, to reduce transmission and distribution losses, to restore curtailed gas supply to Gencos, to allocate gas to most efficient power plants, to ensure timely execution of scheduled maintenance of power plants, to install more power plants in public sector and/or through public-private partnership and to replace the old units which have completed their useful life and are un-economical due to lower efficiencies.
Dr Kamal of Karachi Chamber of Commerce and Industry (KCCI) underlined the need for reviewing the tariff and asked power distribution companies to cut line losses as one percent of power theft was equal to a loss of Rs 5 billion. Air Commodore Momin Arif (Retd), CEO Oil, Gas and Energy Company; Waqar Qureshi, PHD Scholar University of Auckland Newzealand; Eng. Kamran Malik Morgan Technology; Khalid Mansoor President and CEO Engro Power Gen; Arif Alauddin CEO AEDB; Junaid Qurashi, CEO SSJD Group; Sayed Wajid Ali, Chief Technical Officer Zong China Mobile; Naveed Iqbal, Chief Executive Akhtar Solar also spoken on the occasion.