If there is one lesson that can surely be taken from the outgoing PML-N government, it would have to be its botched attempt to fix the power sector. The next government would do well to not repeat the mistakes that have already been made and instead focus on making the sector operationally and financially viable. Two counts which have been missed by a wide mark by the current set-up.
Almost ten days ago, a glaring power breakdown occurred leaving Punjab, Khyber Pakhtunkhwa and parts of Sindh and Baluchistan in darkness for almost eight hours. The National Electric Power Regulatory Authority (Nepra) took notice of the incident and has directed the National Transmission and Despatch Company (NTDC) to submit a detailed report.
Alarmingly, this was the second breakdown in a month as earlier NTDC’s 220 kV transmission lines tripped, cutting off supply from the four Chashma nuclear power plant units which meant a generation loss of almost 2100MW. The regulator noted that these two breakdowns interspaced in a matter of two weeks “once again exposed the fragile stability and reliability of the system.”
But these observations have been made time and time again. Yet to no avail. In the most recent State of Industry Report by the regulator, Nepra pointed out that of a total of 33 auto transformers at 500/220 kV grid stations eight were found to be loaded above their rated capacity. Similarly, an alarming 72 percent of auto transformers at 220/132 kV were found to be loaded 80 percent above their rated capacity.
So the power breakdown doesn’t come as a surprise really. If the generation component had been balanced with investment in transmission and distribution networks, the power sector would actually have become much more operationally sound.
Secondly, operational performance is directly correlated with the financial health of the sector. It does not take a genius to figure out the quantum of losses in transmission and distribution sectors which have led to an ever-increasing circular debt. The PML-N government paid almost Rs500 billion upon coming to power. The situation is back to square one as the toll has crossed Rs700 billion.
Mind you, this is in spite of the low international oil price trend over the course of the PML-N government’s tenure. The consumer tariff has increased to Rs12.5 as compared to Rs9.3 back in 2013 not including taxes. Most of this increase is due to the power surcharges imposed on consumers in a bid to make up for the inefficiencies of the distribution sector and the cost-overruns in generation projects such as Neelum-Jhelum.
Summing it up, the cost of electricity is now higher, while the Rs700 billion circular debts is only set to increase with the almost additional 10000MW capacity added into the system. Power plants like Uch-II and Guddu have been operating at well below rated capacity so ultimately this new generation isn’t even being transmitted fully. In FY15, the national exchequer suffered a loss of a whopping Rs6.5 billion due to this one single power plant while a hundred thousand consumers were affected.
Energy experts and multi-lateral institutions have pointed out towards the uselessness and unsustainability of the approach the government took in tackling the power crisis. And the recent breakdowns have made it quite clear how far the power sector has really come in these past five years. Lessons for the next government on how not to go about it. If there ever were any.
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