Power outages dent pace of economic growth

ISLAMABAD: Unreliable electricity supply with frequent and often unpredictable outages has caused an annual loss of 7% of the size of national economy, says the Annual Plan 2014-15, a drawback that has stymied efforts to step up the pace of economic growth.

In the outgoing financial year 2013-14, average power supply stood at 14,400 megawatts against demand for 18,400MW, a shortfall of 4,000MW primarily due to fuel supply constraints and low hydroelectric power generation.

The inter-corporate debt in the energy chain have also increased with high fuel cost for thermal power generation, high losses in transmission and distribution, inefficiency of generation plants, below cost tariffs and non-payment of electricity dues by public and private consumers.



“Under Vision 2025, the government plans to end load-shedding by 2018,” said the Annual Plan.

The installed capacity of the country stands at 22,689MW and is expected to rise to 24,033MW by June 2014 through addition of 1,344MW. Transmission and distribution losses were high and the loss reduction programme could reduce subsidy by about Rs80 billion per annum, said the Annual Plan.

The government has underlined the need for enforcing modern conservation law and codes of energy efficiency in product manufacturing, consumption patterns and building designs.

Proper heat insulation of buildings would be made mandatory including better practices pertaining to daylight savings and closure of shops at sunset, it said.

This could lead to a load reduction of 800MW without any cost to the government or the power utility.

IP pipeline

Though the government has expressed its commitment to pursue the Iran-Pakistan (IP) gas pipeline project to ease energy shortages, it has linked its execution with provision of finances and settlement of sanctions issue between the US and Iran.

“During 2014-15, the implementation of IP project will be pursued with the government of Iran. Work on the pipeline on the Iranian side is being completed whereas in Pakistan it is to be started as soon as finances are arranged and issue of sanctions is resolved,” said the Annual Plan.

Published in The Express Tribune, June 5^th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.