Social media was abuzz with the screenshots of Pakistan’s power generation crossing 20,000 MW. Some were quick to remind people to keep proof, in case the caretaker setup pulls up any mischief on this account. A Punjab government cabinet member termed it the “first time in history” of Pakistan. Only that, we have been there before. Precisely, on September 6, 2017. Unless Khawaja Asif (the then Minister) and his tweets are no more to be taken seriously.
On a more serious note, Pakistan’s power generation dependable capacity has been on a rise, and so has been the generation, although, it has not kept pace with the capacity addition. For clarity sake, record single day generation must not be confused with actual unit generation, as it has to sustain for a longer period. Case in point is September 2017, when the power generation on one lucky day went up to 20,000 MW, the actual monthly generation was 10 percent lower than August 2017 – despite higher demand, and increased dependable capacity.
Power generation is also a factor of the financial side of things. Otherwise, the current dependable capacity of 29,749 MW should mean smooth sailing for this summer. And the steady increase in international oil prices has resulted in higher average fuel cost component, despite a visibly improved generation mix, which has for two straight months been dominated by RNLNG based power generation.
Recall that both the RLNG and coal fuel pricing is interlinked with the international oil prices. So, while this maybe a relief in terms of reduced reliance on furnace oil, the interlink will continue to put pressure on fuel cost component of the tariff. And we have not even talked about the circular debt menace – which is back – bigger, uglier, scarier.
A lot will rest on hydel availability in the peak summer months, and FO generation is still some distance away from being completely out of the system. Expecting the caretakers to eliminate or even reduce the circular debt pile, is asking for too much. And that, in an increasing oil price environment, could create severe pressure on fuel payments, and eventually on generation.
Even if somehow the system keeps running, expect the transmission system to go down almost on cue. Once the temperatures go north along with humidity, and the raindrops pour down – the tried, tested, and failed transmission system is not expected to do anything differently – without an overhaul. Sustaining 20,000 MW will not be easy through summers.
All said, the outgoing government, must be credited for at least creating a base, which if managed well and is supplemented with transmission and distribution sector reforms, could yield good results. The megawatt part, that needed dollars, is done. The sustenance bit starts now, and that requires fewer dollars and more will.
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