An Assessment of Issues in Pakistan’s Power Sector - Android

I am a Pakistani settled in Australia. After earning my Ph.D. in Energy Management from Australia, I have worked on… Read More

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I am a Pakistani settled in Australia. After earning my Ph.D. in Energy Management from Australia, I have worked on a variety of projects in the Energy sector in several countries, including Pakistan. In Pakistan, I have worked on energy sector projects funded by the World Bank, ADB, and USAID.

I feel sad when I see my countrymen trying to catch up with trends from elsewhere in the world, hoping that it will help solve their problems. Our donors, advisors, and consultants are all West-based, and as such, try to make us see a match between our problems and western solutions. Unbundling of the power sector and hoping to bring a competitive energy market is just one example.

In my opinion, we can better resolve our problems with more indigenous home-made solutions, looking inwards rather than outwards. We should use our strengths in tailoring solutions rather than continue using foreign-made solutions, making us more dependent. Here are my thoughts that I hope might help.

Generation Sector:

We continue to pin our hopes on large-scale traditional thermal generation options, while the world is embracing, as a preferred source, renewable energy. I was pleasantly surprised when the PM recently shared his vision to generate 60 percent of Pakistan’s energy from solar by 2030. This makes complete sense, as solar PV has become perhaps the cheapest form of electricity generation.

Saudi Arabia recently started work on a 600MW (Ph1) solar IPP project, which will deliver power to the grid at just 1.3cents/kWh. This equates to around 8cents/kWh by a typical thermal power system.

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Obviously, due to the intermittent nature of solar energy, innovation is required to ensure grid stability. Several options are available in this regard, such as pumped hydro, microgrid systems, thermal storage, etc. Pakistan should not only attract investment in grid-scale solar IPPs but also encourage embedded solar generation, utilizing arid land, which is abundantly available in parts of Pakistan, through local entrepreneurship.

Such an approach can help bring power to remote areas without requiring any investment from the government. The contribution of the government will be limited to the introduction of appropriate legislation and an active regulator.

Another area to focus on would be a combination of solar and pumped hydro in the northern region and the coastal areas with some mountain lining.

Distribution and Retail Sector:

Distribution Companies (DISCOs) are the main contributors to Pakistan’s chronic circular debt problem. This single issue has been the biggest barrier to the improvement of the power sector. In my opinion, the fundamental issue is the lack of vision to run DISCOs as viable business units rather than traditional utilities. I am sure the purpose of unbundling the power sector was to transform DISCOs into profit-making viable business entities.

However, in contrast to this vision, all DISCOs are operated by the senior-most engineers, who lack business acumen and fail to identify business opportunities their entities offer. One can always argue as to how DISCOs can operate profitably when they have to purchase power at a price and sell at a price, both of which are out of their control?

Of course, that is the sad reality, but it still does not restrict them from finding additional business opportunities using the assets and resources of their DISCOs that are unique.

These DISCOs control a large number of ‘captive’ customers. The access and control over such a large ‘captive’ customer population on its own offers a huge business potential within the realm of the digital economy, which is outside of power selling business.

On the front of operating DISCOs as viable businesses, Pakistan fails to encourage non-technical revenue opportunities through innovation in the digital economy, which can be tapped by inviting non-technical entrepreneurs to participate.

Pakistan should seriously consider at least privatizing the management of these DISCOs. Various business models can be considered. The important thing is that these business units should be operated like businesses by business people, not by senior engineers. Such business people can always find opportunities to use available resources and even cheap electricity to make a profit.

But above all, just the captive customer population itself can create substantial business opportunities, e.g., creating and operating e-commerce shopping, food delivery, property trading, platforms, etc., without even getting into those businesses themselves.

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Other advanced potential options exist in the form of business intelligence using smart meter data and using smart controls to directly control some loads rather than deploy complete black and brownouts.

These solutions can be deployed using local resources and talent, thus creating and deploying home-made solutions.

While I am living a comfortable life in Dubai, working as a Senior Specialist for local power and water authority, I would be more than happy to offer my experience, knowledge, and ideas to pay back to my motherland because of which, I am where I am today.

By Dr Shahab Qureshi
Writer can be reached on LinkedIn here: Linkedin.com/in/shahabqureshi

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