“HAD a really unproductive time at work yesterday thanks to electricity for only 1.5 hours…. The night was terrible too with electricity every alternate hour and a big chunk of no light from 3am to 6am. Today we don’t have electricity since 10am and things don’t seem any better.” This is what a friend wrote on Facebook quite recently. He is based in Lahore.
Though temperatures have started to rise, Pakistan’s long summer is only beginning. Yet, we are already seeing what we had been expecting and had been warned about: electricity outages are increasing rapidly. Even large cities like Lahore have seen outages of 14 to 17 hours per day over the last few days.
At this level of outages, it is almost impossible to get anything productive done. You can never be sure when you will have electricity. You cannot get your computers and phones charged. Tube wells cannot work long enough and water shortages become routine. Everyday business suffers and this is already evident. The situation in the smaller cities and rural areas is far worse.
Over the last few years, many businesses and even residences have had uninterruptible power supply (UPS) systems installed to get some continuity in supply to keep at least basic functions going and to derive a measure of convenience and comfort (in the form of lights and fans). But with 14 to 17 hours of no power every 24 hours, with some such periods extending to four or five hours at a stretch, UPS systems are no longer adequate; there is not enough time for them to be recharged.
Given this state of affairs at a time when temperatures are already on the rise, people should be prepared for a long summer without electricity.
A lot of acquaintances are getting oil and/or gas generators installed at their places of work and residences. A number of these generators are large enough to allow even air-conditioners to work. Even the smaller ones ensure that appliances and UPS systems can be recharged.
But generators are expensive. Oil-based ones, and especially the slightly bigger ones, can cost up to Rs500 to Rs700 an hour to run. If the generator is used for some 20 hours, it will cost about Rs10,000 to Rs14,000 a day.
Clearly, this option is not for poor or middle-class households. For businesses opting for this solution, this is a major hike in their cost of production and is only feasible if they have enough room for absorbing the additional cost in their price and profit margin.
Most middle- or upper middle-income households and small businesses will use smaller and/or gas-based generators as long as gas supply is available over the summer months. It will still be more expensive than paying the regular rates of the Water and Power Development Authority.
The cost to Pakistan overall is much more than the discomfort and disturbance caused to domestic life. People pay higher costs for fuel. If the fuel is imported, the foreign exchange requirements also rise.
The fixed cost of investment in generators is not a small or trivial expense. Small businesses are at an additional disadvantage as they usually do not have access to credit and/or savings to invest in fixed assets. They also cannot go for larger generators that are more efficient.
And if businesses are investing money in generators, they are clearly not investing this money in something else that could potentially have expanded their scope and given higher profits. The fixed investment requirement works against the poor as well. They usually do not have sufficient savings and even if they did, it would be very counterproductive for them to lock all their money into a generator.
The generators are also creating inefficient bypasses to the national grid. Since there are strong economies of scale in electricity generation, by having so many smaller units we are losing out on efficiency and cost effectiveness. If in a couple of years we do start producing more electricity through larger projects a lot of the investment being made today, because they are of a fixed nature, will go to waste.
The environmental cost of having so many generators across the country is going to be considerable as well. “Private generator noise at night in Lahore has become unacceptably loud.” This is another quote from a status update on Facebook, from a different friend on a different day.
This has become true across Pakistan, not just in Lahore. And then there is the smoke that comes from these generators. Diesel is the worst of culprits and smoke from diesel generators can form dark clouds over neighbourhoods. Not even gas generators are smoke-free. What effects will this pollution have on the health of people — will it give rise to respiratory disorders or even cancer as there are carcinogens in most exhaust clouds?
But what can the people do? The last government appeared clueless on how to tackle the issue or implement reforms. We need more electricity generation, but preferably from water. This can only happen in the medium to long run.
In the meanwhile, we need reforms that address concerns about tariffs (to cover costs), and supply priorities (agriculture and industry first, commercial activity next and domestic consumers last).
There should also be taxes on larger generators being installed for domestic use. But these reforms have to be done without discrimination and distinction ie high-profile personalities including politicians should face as much loadshedding as the worst-off consumer in a village. Will the new government have the courage and/or the political capital to do the right thing?
The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.



























