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Business Recorder

Published Date: Nov 14, 2012

Energy crisis posing challenges to national security: SDPI

Energy
crisis has come to a point where it has begun to pose challenges to national
security, according to Sustainable Development Policy Institute (SDPI). Engr
Arshad H Abbasi, Adviser, SDPI Islamabad told Business Recorder on
telephone that the institute is endeavouring to highlight and draw attention of
Government of Pakistan to modernise and upgrade thermal power plants.

These, plants are the backbone of our electricity system with the capacity of
generating almost 70 percent electricity. These plants consume ‘furnace oil ‘
and gas to generate electricity. He said since the efficiency of plants was
abnormally low, they were consuming high quantity of fuel to generate only one
unit of electricity. This is the fundamental issue with the energy sector in
Pakistan and is one of the biggest threats to the sustainability of its
development.

Arshad Abbasi said that enhancing fuel efficiency (generation per unit of fuel)
would not only help generate more electricity from the available fuel
(increased supply of electricity), but also help to reduce prices of
electricity by bringing down the cost of generation (at cheaper rate).

Upgradation of thermal plants is vital for us as our short version leaders and
bureaucrats made agreement for next 25 years with IPPs. In case of any
hydro-power, wind or solar sector addition, (though this is next to impossible
at least in the presence of current regime), the government cannot divorce
these thermal plants. Therefore, the only option left, he said, was to improve
their efficiency to overcome energy crisis and to bring down electricity tariff
for industry and general public.

He highlighted the efficiency of thermal power plants and the subsidy being
paid to KESC and IPPs because of low efficiency. So far government has paid Rs
1,600 billion since last five years on this account because of the government ‘s
negligence, he said.

The latest, addition in the massive mismanagement is the unprecedented
five-billion dollar contract of furnace oil awarded by Pakistan State Oil (PSO)
to a, not only favourite contractor without tendering in violation of all
procurement laws but has pledged national security as well. “I am also
filing a writ petition in the Supreme Court of Pakistan against this illegal
and technically flawed agreement in next few days,” he said.

Needless to mention that SDPI had facilitated Engr Arshad Abbasi in producing
his research work, ie “Pakistan power sector outlook: appraisal of KESC in
post privatisation period” and according to National University of Science
& Technology (Nust), Islamabad, “it ‘s an excellent piece of documents
prepared by SDPI, Islamabad depicting history of pre and post era of KESC
privatisation. It gives the reader in depth picture of circumstances and the
conditions under which KESC has passed through various stages of
corporatisation and privatisation.”

Karachi is Pakistan ‘s largest and most populous city, which is main seaport and
financial commercial centre. It is the 10th largest urban agglomeration in the
world with an estimated population of over 18 million and contributes 20
percent of the total GDP to the country. KESC ‘s generation, transmission and
distribution operations are governed by licenses issued by the National
Electric Power Regulatory Authority (Nepra). KESC has a generation license for
its service area until July 2018 and its distribution license expires in 2023.
The distribution license is also contingent on meeting a number of service
standards stipulated by Nepra Act of 1997, which describes the performance
standards and financial penalties for non-compliances.