Captive power generation has become a significant issue for Pakistan’s energy sector, particularly in the context of unfair subsidies and the burden it places on grid consumers. While captive power plants may offer short-term cost savings, the long-term economic consequences are detrimental to the overall industrial landscape.
Captive power plants, especially those using local gas blended with RLNG, continue to benefit from preferential pricing, creating a disparity between grid-connected consumers and those relying on captive generation. This results in grid consumers bearing a disproportionate share of capacity charges, further escalating energy costs.
The government’s plan to transition captive plants to the grid could be the key to addressing these inefficiencies. With the introduction of blended local gas rates, grid tariffs would decrease over time, ensuring a more equitable distribution of energy costs.
It’s time to reassess the subsidies and pricing models that currently favour captive plants at the expense of grid-connected consumers.
Syed Mohsin Ali
Karachi
