ISLAMABAD: Participants of a roundtable on the country’s power issues on Thursday presented a number of proposals for the government regarding the way ahead out of the present imbroglio of unsustainably high electricity tariffs.

Key stakeholders and energy experts participated in the roundtable that had been arranged by the Islamabad Policy Research Institute (IPRI), a national security think-tank, says a press release.

“After a very long time a candid and no holds barred discussion was witnessed on power sector issues spanning the whole gamut from capacity payments, rising cost of electricity, regulatory deficit, Power Purchase Agreements (PPAs), power generation mix power thefts, grid inadequacy and the impact of deteriorating macro-economic indicators on power tariff and the unsustainable rise of circular debt,” says the press release.

The discussion was joined by an eclectic mix of power sector experts, academics, and think-tank community. The discussion yielded some very useful conclusions regarding the way ahead out of the present imbroglio of unsustainably high electricity tariffs.

Former caretaker minister Gohar Ijaz highlighted the issue of capacity payments as a consequence of investor-friendly PPAs, lack of industrial development, poor transmission and distribution system, imported coal based CPEC projects, and lack of forensic audit of the excess profit earning IPPs.

The other stakeholders, however, pointed out the role of steep currency devaluation, inaccurate demand calculations in IGCEP projections, high government taxes, and very high transmission (16pc) and distribution (11pc) losses. A dissection of the tariff showed that capacity payment component was only 18.39pc of the consumer tariff compared to high percentages of base tariff i.e 41pc and 31pc government taxes.

The Wapda’s stance about hydel being the cheapest mode of power generation and the use of profits as equity for future hydel projects was perceived as life saver for Pakistan’s power sector in the long run by most participants.

Few innovative and pragmatic solutions for the power sector problems highlighted by the experts included retiring of the ageing and inefficient IPPs both in private as well as government sector, reduction in transmission and distribution losses, creation of multiple buyers market, re-profiling of CPEC, IPPs’ debt and their conversion from imported to local coal.

The space that was opened for renegotiation of the PPAs of IPPs in 2020 should be exploited through consensus to reduce the electricity tariff. A holistic approach addressing multiple dimensions of the power sector with emphasis on power generation through indigenous resources i.e hydel, wind, solar and Thar coal emerged as the pearl of the high price the nation needs to chase in order to tide over our power woes.

Prominent among those who participated in the roundtable were Wapda Chairman retired Lt-Gen Sajjad Ghani, Nepra Chairman Mr Wasim, CEO CPPA Rehan Akhter, CEO Attock Oil Adil Khattak, former SAPM on CPEC Khalid Mansoor and former MD FPCDL & FPKCL Asghar Nawaz.

Published in Dawn, August 23rd, 2024