ISLAMABAD: The PML-N government’s much-publicised new energy policy envisages an end to power outages within three years besides phasing out electricity subsidies for all but domestic consumers using up to 300 units a month, The Express Tribune has learnt.
Prime Minister Nawaz Sharif wrapped up consultations on the energy policy at a high-level meeting on Friday. A draft of the policy will be submitted to him for formal approval. The draft will also be tabled before the Council of Common Interest (CCI) and the consent of the provinces will be sought before it is implemented.
According to sources, the prime minister is expected to unveil the energy policy ahead of his scheduled visit to China. The move will send a good signal to Chinese investors and lure them into investing in Pakistan’s power sector.
Currently, 13.5 million out of the total 20.5 million power consumers in Pakistan are using 300 units per month. “Under this plan, the power subsidy will no longer cover 40% of consumers, saving the national exchequer Rs270 billion according to the current electricity rate of Rs14.70 per unit,” an official told The Express Tribune.
The new policy also envisages increasing power generation from 12,200 megawatts to 26,800 megawatts and reducing average electricity rates from Rs14.70 to Rs10 per unit by shifting the burden from thermal to hydel power plants and switching to cheaper alternative fuel such as coal.
Currently, the share of hydel power in the total energy mix is hardly 30%. The policy aims to boost its share to 70% by building both large and small dams and carrying out some other initiatives to increase generation from 23,000 MW to 34,824MW.
Coal-fired, run-of-the-river and biomass power projects will also be launched on a priority basis to improve the energy mix. Efficient plants will receive fuel on a priority basis as well to reduce the cost of power. Older inefficient thermal plants, meanwhile, will be converted to coal.
Under the policy, the government also plans to phase out CNG usage and captive power plants to divert gas supply to efficient power plants in a bid to further reduce costs. Captive plants are among the most inefficient plants, consuming around 450 million cubic feet of gas per day (mmcfd). CNG consumers, on the other hand, account for 400 mmcfd consumption. Gas will be diverted from these sectors by raising prices.
Uniform prices for all gas consumers except for domestic ones will be implemented to end cross subsidy. Presently, gas consumers enjoy an annual Rs45 billion subsidy – a major concern for multilateral donors. The government plans to reduce unaccounted for gas (UFG) in order to make more gas available to the power sector. The well-head price of gas will be enhanced as well to attract investment in the sector. The government also plans to focus on the exploration of shale and tight gas.
According to sources, the government will task the heads of power and gas distribution companies to reduce losses and improve operations. The heads who fail to achieve the target will be replaced, they added.
Power and gas companies will also be unbundled into small distribution companies to reduce losses and improve service delivery. Transmission and distribution losses will be reduced from 36% to 16% by controlling power theft. The policy also recommends action against bill defaulters within a 60-day period to help clear circular debt.
The government plans to expedite the import of 1,100 megawatts from Iran, 1,000 megawatts from Central Asian states and 500 megawatts from India to bridge the electricity shortfall. It also aims to focus on exploiting coal reserves in Thar.
The new policy also seeks to control the theft of furnace oil and reduce transport costs by laying down new pipelines. At present, furnace oil worth roughly $200 million is stolen every year.
A performance contract will be signed between generation companies and Pakistan State Oil to ensure timely payment of oil supply bills. PSO – whose current major supplier is Kuwait Petroleum Corporation – will be directed to purchase oil on a tender basis instead of purchasing it from a single supplier to reduce costs.
In an official statement on Friday, Prime Minister Nawaz Sharif said the new energy policy will be a panacea for all of the country’s power woes. “People and economy have suffered badly at the hands of the crippling power crisis and it is high time that prudent and consistent policies were pursued to come out of this morass,” it stated.
Published in The Express Tribune, June 29th, 2013.
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@jibran: Musharraf had 10 years in which he added nothing to the country's energy and Zardari had 5 years where he did next to nothing. Why not give this new government a chance to make good on its plan- three years will give you an idea if things are progressing in the right direction.
@Gulkhaiz: "As an interim measure the only worthwhile option seems to import from neighbours till we generate our own." +++++++++++++++++++++++++++++++++++++++++++++ It may also be economically more attractive to import than produce locally in inefficient oil based units.
3 years - when no one will live only noora will remains, what a joke!
Hopeful that the government is able to implement this policy as well..
@Roni: Yeah, IK has contacts with Jins, no?
It is a well-known proverb that "Actions speak Louder than Words" and the actions of PMLN have well spoken the fact that it is serious in liberating the country from massive loadshedding.
It was PMLN’s Khawaja Muhammad Asif who approached the Supreme Court against Fraud in payments of RPPs. Read the following link to Supreme Court judgment: http://www.supremecourt.gov.pk/web/userfiles/File/HRC7734-G1003-GOF2009[AllegedCorruptionInRentalPowerPlants].pdf Mysteriously, the self-proclaimed Tsunami Khan was totally missing from the scene. . For all those pseudo-intellectuals who think that there was no endeavor by the Punjab Governmentnt after promulgation of the 18th Amendment, they need to read about the impediments created in the implementation of over 900MW power projects at Chicho-ke-Malian and Nandipur http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/national/28-Aug-2011/Centre-delayed-Punjab-projects
The two projects were deliberately hurdled by the then Law Minister Babar Awan for want of huge kickbacks which the provincial government and the Chinese company (Dong Feng Corporation Ltd) had refused. http://www.transparency.org.pk/newsdetail.php?nid=4413#.Ua1BNeDpLM
Consequently, the machinery remained rusting at the port causing huge losses to the Pakistani banks, Punjab government and the Chinese company.
Only PMLN has the vision and vigor to resolve the Energy Crisis.
It’s like even if a tornado, or hurricane or thunderstorm comes its PTI’s fault now. . @sana: What if it is a tsunami instead? . By the way, Imran Khan did claim to wipe out corruption at the top level in 19 days. . Most of whom I see here are a bunch of whiners. If NS can end blackouts in 3 years, I would consider him a great Pakistani. In my mind, 3 years itself would be a herculean task especially if he is talking about ending blackouts in rural areas as well as urban areas. Also with the current back and forth with the IMF. I wonder how Pakistan intends to pay for fuel when foreign currency reserves are somewhat depleted.
@sana: Yep not in months but Khattak Sahib vowed to do it in a single WEEK!
@Sikander Fayyaz Bhadera: Then probably you should not question those who voted and would vote again for other parties as well. :)
@Aamer Khawaja: People really need to think before talk. PTI claimed to end CORRUPTION in 90 days! not 19 days! It's like even if a tornado, or hurricane or thunderstorm comes its PTI's fault now. All I see is people criticizing PTI. PTI supporters are keeping PTI in check and making sure they deliver...You guys should make sure you do the same for your party.
@Xnain: Atleast PTI didn't claim to relieve the nations power crisis in months...at least we were realistic about it.
@Ali: The point isn't that we expect them to undo what the previous govt did. The point is that they broke their promise! They shouldn't have made claims in their so called "josh-e-khitabats" that they would relieve the country of power crisis within months. That's what they got the votes for and they are going back on their word! The same standard of criticism goes to everyone, whehter it be PMLN, PPP or PTI.
I hope they do that. 3 years may sound long enough, but I think if efforts are done with 100% sincerity, they should be able to achieve the targets in 5 years.
My vote would still be for PTI though.
Well Done PML-N....
Present government is showing genuine resolve to end energy crisis. It is commendable. I hope Nawaz Sharif builds KBD too.
Rubbish. Double electrical production - lower rates - convert from gas to coal - all in three years and all without the funds to implement. This has less credibility than the promised release of the Abbottabad report. Why not include development of water cars and maybe walking on water?
Rubbish. Double electrical production - lower rates - convert from gas to coal - all in three years and all without the funds to implement. Typical public pleasing policy that has zero credibility. Grow up.
I hope its not a trick to silent people for three years and then for the remaining two years they find something else to divert peoples attention. What if they didn't, I think that the people won't care by that time. Most of the people by that time will just say"ok let them go, now only two years are left lets wait for the new govt"
OMG! So much power shortage. It will be a miracle even if it is overcome in 3 years! Thumbs up for the ambitious plans of the govt.
@Aschraful Makhlooq: CM KPK has already failed on one target: Ending terrorism in 19 days, these ridiculous statementd are childish
@FAZ: KESE's structure itself is a result of a policy.
@Pervaiz Lodhie: Agreed, we need energy for industry first because without economic growth, government will never have sufficient funds to implement its economic agenda. Kick start the economy first by hook or by crook.
@a&a: The problem is not that we haven't built new dams. The problem is that we seldom complete what we start. NJ, Basha and other dams are delayed projects raising their costs and making them more expensive. We need a will to complete them and if PML-N has it, we will continue to see results after one and a half years.
@jibran: Check PTI's official menifesto as well. They were were talking about terms (5 years) rather than just years.
Allah karay 3 years, 3 years hee hon..
@Ali: No one forced them to claim such things before elections anyway? They sold "paradise in months" and "bringing back the rates to 1999" to public and now they are relaizing what the exact scenario of country is?
That's cute. While you're at it, could you put an end to sectarian violence? Unless of course you want a mass rebellion. Do ask your friends in Turkey/Egypt/Libya how much fun those are to control.
No policy of choking to death KESC and karachites??
I hope that this three year promise will not end-up on another "Josh-e-Khidabat" as well.
Will it not be proven the promise like Raja Pervez Ashraf? Here never forget it that CM KPK Pervez Khattak has said that give us WAPDA and we shall end load shedding within 7 days.Can't be CM KPK Pervez Khattak given a chance to prove his this statement true????
Change in energy supply will come but very slowly. Multiple efforts will be required. Everyone must pay their bills. Government possibly biggest defaulter. Catch and punish electric theft going on for decades. Fix line losses where possible. Create Solar Farms on fast track in ever corner of Pakistan for free energy from the sun but beware of cheap solar panels which must last over 20 years. In few wind corridors install quality Windmills.
But the BIGGEST way to create huge amount of instant energy is encouraging and rewarding those that show constant reduction in energy usage. Cut down number of bulbs, turn off when bulbs not in use, change from high wattage to low wattage bulbs like LED bulbs. I have helped USA for 40 years reduce huge amounts of energy by providing energy efficient LED bulbs reducing energy use up to 90%. Energy saved or reduced is exactly same as energy produced.
First provide 24 hour electricity to the Industry on urgent basis.
What happen to IP gas pipe line, I guess the arabs and Patrol giants are making all the decisions in Pakistan now.
@Satan: he promised in lahore and lahore will get all its lights soon, but still 3 years seems a tough timeline.
If they implement this, and we are in 30k MW zone by the end of their tenure, then I don't think why anybody won't vote for them in the next general elections. Of course how PTI perform in KPK will also come into play.
Have to give him credit for being realistic now. A new plant is not constructed in a couple of months.
@jibran: Dear don't worry you can convert 3 years into months months..... As Its 36 months :-D Now be happy and pray that this government delivers this will be best for Pakistan and all of us.
what a joke !
Nice plan but the timeframe of its implementation does not conform to the aspiration of people. Moreover, since very less work has been done on small dams, it will further delay the induction of cheap power in the system. The option of coal under its present state of development is more of an academic activity rather than of real benefit. As an interim measure the only worthwhile option seems to import from neighbours till we generate our own.
IK would have done it in 90 days! Talk before elections is different than after elections.
Why can't you just end the corruption in enery sector and stop the theft of electricity? Everyone knows we'd hardly be short of electricity if everyone paid their fair bit.
Just making us fools, ain't they.....????
3 years..??? Too early........:-)
They said three years when in reality it will take four-five years. Just in time for elections :P
@Satan: "Shabaz sharif promised that for 6 months. ++++++++++++++++++++++++++++++++++ All pakistanis must realise that there is no quik fix available and the time frame of 3 years may prove to be optimistic. Setting up hydel capacity is time consuming eg Neelum Jheleum.
I hope the way government highlighted the measures to end loadshedding will Implement them as well.
You expect the current government to undo in months what the previous government did in 5 years. You guys are so naive.
Shabaz sharif promised that for 6 months. I am confused.
3 years? You were promising months.