Energy Security and Climate Change

Experts gave the opinion that Pakistan’s electricity consumers are greatly affected by tariff prices, which in recent times, have been fluctuating significantly due to global fuel price hikes. The efficiency of electricity regulatory body depends upon the degree of satisfaction of its stakeholders.

Arshad H. Abbasi, Advisor, Water and Energy, Sustainable Development Policy Institute (SDPI), Javeriya Hasan, Research Associate, Sustainable Development Policy Institute (SDPI) spoke at seminar on “Energy Security and Climate Change” organized by SDPI here on Thursday. Shakeel Ahmed Ramay, Head, Climate Change Study Center , SDPI conducted the proceedings.

Javeriya Hasan talked about general observations on NEPRA’s public hearings. She informed that NEPRA had a very comprehensive and consumer oriented procedural system in place, however, much more is desired to be seen in practical terms. Ms. Hasan said that it is often observed that domestic consumers are usually absent from public hearings, partly because the entire process appears convoluted to them. She stressed that consumers need to be educated about NEPRA’s roles and responsibilities and be capacitated with skills to interject where decisions that concern.

She also delineated an example of the Gakhar Plaza , Rawalpindi , which recently collapsed due to a fire. She mentioned that the fire had been a result of electrical short circuiting, which is a testament of the fact that performance standards were not being thoroughly enforced. She emphasized that distribution companies need to be actively pursued to comply with performance standards; otherwise, it is the people at large who are unduly affected by a compromise in the quality of service.

Javeriya recommended that bulk metering be introduced at different levels of the grid to pinpoint where exactly losses are taking place and to check whether there is electricity pilferage. She also suggested that there needs to be a mechanism whereby consumers are brought together on one forum to discuss issues pertaining to them. She said that such a network would serve to build awareness on electricity regulatory process, in addition to encouraging more individuals to partake in the decision making process.

Shakeel Ahmed Ramay said Pakistan ’s high reliance upon gas was due to the perception that Pakistan had vast gas resources. He said that energy usage had increased drastically in the future and that by 2030; energy demand would surpass 100,000 Mega Watts (MW). He said that the energy crisis in Pakistan had been causing a loss of 2% of GDP, Rs. 75 billion losses in terms of reduction in exports, and a loss of 400,000 jobs every year.

Ramay, while discussing the mitigation study his team recently launched, said that Pakistan ’s energy needs will rise in the future and that it was time for Pakistanis to decide what form of energy they would want to rely upon in the future. He said that although coal was a chap source of energy, it would increase greenhouse gas emissions – gases that cause global warming. He said industrialists were the main stakeholders in this debate and it is them who had to play a dominant role in it. Shakeel Ramay said that although the initial costs of switching to clean energy might be higher, the benefits in the long-term would outweigh the costs.

Arshad H. Abbasi talked about the role of NEPRA in Pakistan ’s power sector. He said that governance inefficacies in the institution stemmed from an endemic problem of nepotism and lack of transparency in the appointment of members. He said that there is evidently a leadership crisis and the consequence of this is that no substantial progress has been made in reforming the country’s power sector. He said that given Pakistan ’s immense hydropower potential, the country would not only be able to bridge its supply demand deficit but be able to benefit from the low costs involved in generation. This inevitably has an effect on alleviating the menace of circular debt, which Pakistan is currently reeling under.

Abbasi said that there are plans underway to import electricity from Tajikistan , which again, he underlined was a highly unsustainable option. The transmission lines would need to cover a distance of 650-700km through Afghanistan . He said that this not only posed problems of high transmission losses but was a security issue, which rendered the entire project unfeasible. He emphasized that progress on hydropower schemes such as the Munda Dam needs to be accelerated.

Abbasi also said that the current assignment of NEPRA is mainly for tariff determination and issuing of licenses without focusing much on any mundane issues. The determination of tariff can be performed with the help of an energy tariff calculator, which is available online. He explained that most of the time, NEPRA is involved with hearings on fuel adjustment charges. For accurate and unbiased adjustments, expenditure of a few thousand rupees on specific software can not only substantially help consumers, but also help save financial sources.

The questions at the end of seminar highlighted concern the public have on electricity regulation issues. One participant pointed out for the need to increase the share of nuclear energy for power generation. He was also of the view that monthly fuel adjustments are not covered by any legal stipulation and need to be reexamined. Another participant mentioned that WAPDA’s performance has become poorer over the years, as its performance has deviated from its mandate. He also emphasized on the need to accelerate progress on hydropower projects, which are currently suffering from time and cost overruns.