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The News

Published Date: May 3, 2013

Energy Crisis ?result of faulty business model?

Minister for Water and Power Dr Mussadaq Malik has said that energy crisis in
Pakistan is the result of a faulty business model, increasing demand-supply gap
and losses within transmission and distribution system.

was speaking at a consultative meeting on “Pakistan’s energy crisis and its
possible solutions” organised by the Sustainable Development Policy Institute

on deepening energy crisis, the minister informed that if the required funds
and gas is not provided in next few days, there would be increase in
loadshedding which currently stands at 12-14 hours in urban areas and 16-18
hours in rural localities.

on the reasons for energy crisis, he said that currently Pakistan is generating
around 14,000 MW of electricity at peak with 40 per cent of energy produced
with the most expensive fuel such as diesel and furnace oil. He said producing
costly electricity and distributing it at subsidised rates is a faulty business
model which cannot work anywhere in the world. He said the government is
planning to increase generation of electricity by shifting the bulk of
generation responsibility from inefficient GENCOs to the more efficient IPPs.

explained that Rs13 billion per month are spent on providing 6,000 metric ton
of oil to GENCOs who generate only 650 MW per month. He said the capacity of
IPPs can be utilised by injecting Rs10 billion, which would produce 1,150 MW
electricity. This, he said, it would result in saving of Rs36 billion annually
along with additional generation of 500 MW electricity per day.

on issues in supply of fuel to GENCO’s, he said adulteration and pilferage’ of
fuel are major issues which result in billions of rupees loss to the
government. He said the ministry is working on a mechanism proposed by SDPI
titled ‘fair average quality price formula” under which the price of fuel would
be reduced if it is found to be of less quality.