Electricity is one of the key parameters for growth in any economy, whether of a country, province, or urban center. It is one of the most efficient ways to use energy. Globally, there is a trend to shift transportation to electricity. In Pakistan, domestic, commercial, and industrial use of gas is being shifted to electricity at an accelerated pace. The number of consumers is growing and the consumption per capita is growing. And to cope with this demand, investment is needed, not only in power production, as the need for investment is dire in transmission and distribution infrastructure.
Demand must be generated from discos and plans ought to be in sync with their needs. That is unlike the case where the power ministry in Islamabad makes decisions for power generation in places of their choice and the task of demand generation and supply management is left to discos. And the decision making must be strategic and well planned. That capacity is missing from both power ministry and discos.
In general, the role of utility companies has remained limited. Across the world, utility companies approach regulators and propose long term projects for investment. This is because they operate in a regulated environment and require approvals to invest capital even if it is for the benefit of consumers to secure reliable supply of power. Consumers may think investment is bad because it will increase prices, but this process is also highly regulated under the laws and rules of governments across Pakistan.
The job of the utility companies is to ensure demand is met, by ensuring generation, transmission and distribution infrastructure must grow in sync. Different utilities submit their plans and currently NEPRA is gearing to hear KE proposal for the next 7 years. A presentation outlining their salient features focuses on growth, safety, reliability, and renewable energy addition which is a good step to bring energy costs down. It also aligns with national goals to add renewable generation. Nothing of that sort is visible in other discos. The only decent story to tell is about K-Electric where the benefit to the city in terms of decline in losses and enhancement of consumer base is well documented. Similar long-term foresight is needed if other discos are deregulated and privatized to create the right incentive structure.
The momentum for KE is built since privatization and is further expanding. Its territory is growing, and losses are falling. The company is leveraging upon technology to achieve challenging needs of Karachi. This is in line with the city’s interest and beyond.
The company is targeting to provide 5,000 MW to cater 5 million consumers (from existing 3.4 million) which includes electric vehicles and new manufacturing clients. According to its plan, share of renewable shall increase to 25 percent. That is sizable growth and for that investment is required, which the company is committed to. The point of illustrating KE’s example is to make a case of deregulation and privatization of other discos so that plans for Lahore and other cities shall come to see light of day.