KARACHI:
According to NEPRA and other government institutions, Pakistan’s current electricity production capacity is 44,000 megawatts (MW), while the average usage is 23,000 MW and the highest demand is 30,000 MW. Pakistan’s electricity transmission capacity is only 24,000 MW. The country is also facing Rs2.5 trillion circular debt in the energy sector, which mainly arises from high-capacity payments to power plants. Similarly, transmission losses and theft are also increasing without any control.
In such a situation the prudent thing to do is to either reduce production contracts and capacity payments or reduce electricity cost per unit to increase usage, improve transmission capacity, reduce line losses, and export electricity to overcome this situation. But in no case should new production capacity be added at additional costs. The solarisation of government buildings and the addition of 10,000 MW of solar capacity to the grid will only worsen the situation. Solar energy is expensive as it produces less than 10% of the installed capacity but capacity payments are made for the full installed capacity.
We should also keep in mind that many renewable and cheaper hydropower projects will also start producing electricity in the next few years. These include huge projects like Bhasha and Dasu Hydro and many smaller ones in Northern Pakistan. All these projects will also have to pay capacity payments. Therefore, I request the government to not solarise Pakistan because it would increase the likelihood of default because of overproduction and overpayment of electricity.
Shahryar Khan Baseer
Peshawar
Published in The Express Tribune, January 3rd, 2023.
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