Alternative energy and governance issues

The constraints in providing alternative energy are not financial or technical, but related to governance issues.

Urdu Bazaar is a much frequented book market in the central business district of Karachi. According to a survey organised by the authors, it has over 400 shops. Like other markets in the city, it is subject to long periods of loadshedding. Shopkeepers have installed generators and/or uninterrupted power supply (UPS) units as an alternative to KESC supply. The generators are expensive to buy (an average cost Rs37,500) and to operate (average cost Rs5,882 per month). In addition, the noise and air pollution that they cause has, according to the shopkeepers, damaged their health and frayed their nerves. Also, their noise makes telephone communication and conversation with customers almost impossible. Customers, too, do not wish to visit the shops while the generators are in operation. Since there is no space for placing generators within the shops, they are all placed in corridors and pavements. This causes difficulty in movement and, since the shops are all located next to each other, it increases noise pollution.

Installing UPS’ is a cheaper solution, both in terms of purchase (average cost Rs20,000) and operational costs (average cost Rs1,000 for batteries per month). This does not include KESC electricity costs for charging the UPS units. However, these units do not store enough energy to service the long hours of loadshedding, especially since connections are switched off at night, and, as such, recharging does not effectively take place. Also, pollution from UPS batteries causes nausea and headaches.

Due to these considerations, 94 per cent of Urdu Bazaar shopkeepers wish to invest in some form of alternative energy. The solar option seemed attractive to them. So solar energy providing companies were contacted, they were introduced to the problem and they presented their technical and financial proposals. The cheapest offer was Rs98,000 for two energy savers, one fan and one telephone charging outlet. For two fans, four savers and one telephone point, the cost came up to Rs149,000. One would have thought that these high costs would not be acceptable to the shopkeepers. However, they were willing to pay these costs and some of them were willing to pay more for a better service. Cheaper options were also presented, including solar power and grid connections. The shopkeepers insisted though, that before committing they would like the solar company to put up a demonstration unit. The solar company is willing to do this. Thus, finances and technology are not the problem.

However, the shopkeepers have five concerns and are not willing to invest unless these concerns are addressed. The first of these concerns is that the KESC is like a hungry wolf, thirsty for money. It would disconnect them from the grid to blackmail them once it sees that it is losing revenue. This would make things difficult for the shopkeepers during rainy days when the solar system does not function effectively. They want a guarantee that the KESC will not disconnect them from the grid. Secondly, they also want a guarantee that the government will not impose a tax on solar energy generation. They are further afraid that, since there is no continuity of policies, a future government might cancel such a commitment given by the present government. Thirdly, they are also afraid that if they make such an investment, the ‘bhatta mafia’ will become active and extort money from them. They want a guarantee that they will be protected from this. Another concern is that the company offering the alternative might disappear, as so many companies have done in the past. And lastly, they are afraid for the safety of their solar panels, which will have to be placed on the roofs of the buildings where their shops are located.

It is interesting to note that the constraints in providing alternative energy to Urdu Bazaar are not of a financial or technical nature, but are related to governance issues.

Published in The Express Tribune, February 12^th, 2011.