RPPs: reviving bad ideas

It may not be immediately apparent, but Pakistan actually has enough installed capacity to meet summer surge in demand

Managing a power grid is a tremendously complex endeavour. It is difficult to predict the amount of electricity that will be demanded at any given moment in time, but given the lack of storage capacity, any demand for power must be generated virtually at the same instant it is needed. It is also not easy to coordinate between dozens of power companies spread throughout the country, as well as transmission and distribution companies. Given this vast and intricate infrastructure, we are perfectly willing to accept that there can be multiple valid opinions on how best to manage the energy grid. But reviving the rental power plants (RPPs) is not a good idea by any stretch of the imagination.

In the long litany of bad ideas generated by the government regarding the energy sector’s management, RPPs are among the worst. They are grossly inefficient, frightfully expensive and very often do not actually produce any power, but have contracts demanding that they be paid anyway. And the government’s claim that they are a good way to manage summer peak demand is just plain wrong.

It may not be immediately apparent, but Pakistan actually does have enough installed capacity to meet the summer surge in demand. If all power turbines in the country were operating optimally, there would be no need for any power outages anywhere in the country, even on a hot July night when millions of homes have their air conditioners on at full blast. The problem is that about two-thirds of that capacity is owned by the government and is barely functional, let alone running at optimal capacity.

The government could easily use its own gas-fired thermal power plants — combined with the independent power producers (IPPs) — as the base load for the economy and use its oil-fired thermal plants combined with the rise in hydroelectric power generation that takes place every summer as the peak load power generation. If such a plan were followed, RPPs would be rendered redundant. But, of course, this would rely on the government managing its own assets well, which appears to be beyond its capacity at the moment.

Published in The Express Tribune, March 30^th, 2014.

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