Envisioning Karachi’s energy future

Karachi is seeing a surging energy demand due to its rapid expansion. Diverse industries and commercial activities serve as major employment hubs and propel the national economy and attract job aspirants from across the country.

K-Electric anticipates a future where electricity usage is to rise because of this growth. Eventually, peak electricity demand is expected to surpass 5000MW by 2030, driven by an estimated 5 million electricity customers.

To meet this demand, KE has crafted a meticulous Investment Plan (2024-2030) worth PKR 484 billion, which is aimed at improving customer experience, supported by enhanced use of technology. It also aims to address the energy sector dilemma, i.e., access to affordable, reliable, and sustainable energy.

It was submitted under a non-exclusive distribution license request, six months prior to the expiry of KE’s multiyear tariff (2017 – 2023) and remains in the advance stages of approval from Nepra (National Electric Power Regulatory Authority).

What would Karachi’s energy landscape look like by 2030?

Future energy forecasts follow country level targets initiated by the Government of Pakistan. The achievement of SDGs up to 2030 is dependent on Pakistan achieving an annual real GDP per capita of 5%.

Similarly, the country’s planners aim to increase access to electricity to 96% of the population, enhance manufacturing value to 16% of GDP, increase the use of renewable energy by 25%, reduce projected emissions by 50%, and introduce 30% EVs on our roads.

Nepra’s Indicative Generation Capacity Expansion Plan (IGCEP) notes Pakistan’s future power setup for the decade, focusing on optimal generation and transmission via CTBCM (Competitive Trading Bilateral Contract Market), enhancing efficiency, transparency, and competition for a more robust power landscape.

Improving and enhancing KE’s serviced territory under the Investment Plan have been meticulously aligned with the targets set out by Nepra and the broad growth projections for the country.

Continued expansion, particularly the rapid vertical growth of the megacity and energy requirements, the investment outlines further upgrades and additions across the company’s generation, transmission, distribution and supply vertical.

A key investment — the 500kV Karachi-KANNUP Interconnection (KKI) Grid — will facilitate increased power acquisition from the national grid and IPPs. The grid will serve as a conduit for affordable power distribution, capable of accommodating large power flows to Karachi.

Expected to be commissioned by 2024 – alongside the Dhabeji Grid – it will be the third interconnection point. Following these constructions, KE will be able to draw up to 2,050 MW from the National Grid.

Additionally, targeted investments aimed at fortifying network reliability such as new 220 kV and 132 kV grid stations will enhance system efficiency and proactively replace aging equipment. The purpose is to curtail power interruptions by an estimated 30%.

KE has filed for distinct petitions for transmission, distribution, and generation alongside a comprehensive Power Acquisition Program (PAP).

It outlines the approach to procure power for Karachi in IPP mode. Within this programme, KE has planned to harness solar, wind, hydel and hybrid energy sources, which will elevate the company’s renewable energy generation to over 1200MW.

The plan will lower generation cost with 990MW of indigenous base load power and reduce imported fuel dependence. KE is striving to provide affordable energy for its customers despite the macroeconomic challenges and awaits regulatory approvals for project commandments.

The Distribution Network Improvement Plan (NIP) envisages a capital expenditure of PKR 185 billion to complement investments in the transmission and generation side. It focuses on the integration of data-driven methodologies aimed at significantly reducing outages, while simultaneously achieving a further reduction in network losses (currently at 15.3%).

Accurate network mapping improves targeted interventions for preventive and corrective maintenance, and demand-forecasting. Today, after digitizing customer services, it now connects 1.3 million customers to KE’s services. Customers can report issues, pay bills, and request connections online.

KE is striving to leverage technology to go the extra mile, thus evolving into a more accessible and customer centric power utility via these strategic interventions. Integrating cutting-edge systems such as Advanced Analytics & Artificial Intelligence, and Supervisory Control and Data Acquisition (SCADA) systems, smart meters (AMIs), and Geographic Information Systems (GIS) will substantially enhance network visibility and reduce complaint resolution times through intelligent and predictive interventions complementing the company’s distribution strategy.

Smart meters will help KE shift from reactive to preemptive complaint management as they are deployed and reducing service outages. KE will also augment and fortify its IT infrastructure with Rs. 18.5 billion, improving data, IoT, machine learning, AI, and cyber security.

Envisioned over the next 7 years, the investments will complement prior investments of over PKR 500 billion, post privatization. Public reports underscore the effectiveness - halving line losses, doubling the customer base and power consumption, and extensively expanding Karachi’s electrical infrastructure. KE is deeply attuned to Karachi’s dynamics and as a fast-paced energy enterprise, is committed to fostering prosperity for all customers by 2030.

Copyright Business Recorder, 2023