Each year, the National Power Regulatory Authority (Nepra) releases the State of Power Industry Report, which outlines key events, technical and financial data, and sector issues. This comprehensive report offers valuable insights for planners and operators within various power-related entities.

Unfortunately, the same problems are highlighted year after year in Nepra’s annual report, with no corrective measures taken by the responsible government organisations. The recently issued 2024 report once again addresses the persistent challenges facing Pakistan’s electricity sector, issues Nepra has been emphasising for years. It’s akin to a doctor diagnosing a patient’s illness through thorough investigation and prescribing a remedy, only for the patient to disregard the advice.

The share of Thar coal in the total power generation mix falls significantly short of its full potential. More concerning is the underutilisation of the existing installed generation capacity of 2.66GW. According to the report, the actual operation of the four Thar-coal-based plants equates to the capacity utilisation of just 2.5 plants.

In other words, this affordable and less import-dependent source of electricity is not being optimally utilised for the benefit of consumers. This situation has remained unchanged for at least the last five years, and it’s difficult to comprehend why the cause of this anomaly has not been rectified in all these years.

The report reiterates the same persistent challenges the industry has faced for years without offering any corrective measures

More recently, the Lucky Power plant has been forced to use imported coal due to a lack of local Thar coal. We keep being told that the coal reserves in Thar are among the largest in the world, so one fails to understand the barriers to increasing the output from the mines.

The report indicates that the Neelum-Jhelum Hydropower Project, a source of affordable electricity, has experienced at least two significant shutdowns. The first one, in 2022-23, lasted 13 months, while the current shutdown has kept the plant out of service since May 1, 2024.

In the last six years of operation, the N-J Plant has produced around 50 per cent of its designed output capacity. This mega-project, which cost the country billions of dollars, has turned into a white elephant and demands a thorough investigation into why it is not performing as expected.

Additionally, six other smaller hydropower plants operate at less than 50pc of their designed output capacity. Does this suggest an inability to build and efficiently manage power plants on our water resources? If so, what guarantees do we have that the new large-scale projects — Bhasha and Dasu — currently under construction will operate successfully? Who will address these major concerns and sources of worry for the entire nation’s power sector?

The report highlights the rapid increase in solar-based net-metering connections, which doubled last year, resulting in a total output of 2.5GW. However, it draws attention to electricity distribution companies’ (Discos) flawed perception of net metering as a source of competition rather than a complementary energy solution.

This misconception leads to lengthy approval times for new applications, undermining the potential benefits of renewable energy and grid efficiency. Nepra has also highlighted this issue in its previous reports, raising the question of who is taking steps — and what steps are being taken — to change the Discos’ perception.

It is worth noting that according to some reliable press reports, which have used China’s export data, over 14GW of solar panels were imported by Pakistan. Excluding the 2.5GW capacity of net metering, it can be safely assumed that the remaining 11.5GW has been installed off-grid, which has significant implications for the country’s supply-demand equation.

The Nepra report should have mentioned where this additional solar power capacity has been deployed. The industrial and commercial sectors have likely installed this capacity for their off-grid use, becoming independent of the grid-based supply. If so, it can be inferred that the surplus generation capacity in the national grid, a major cause of high electricity tariffs, is largely due to some major users implementing their own solar-based independent power solutions.

The above examples underscore the deep-rooted institutional capacity issues that must be addressed to sustain Pakistan’s electricity system financially. The discussion suggests that rectifying Wapda’s hydropower operations, providing fresh perspectives on net-metering importance to Discos’ key staff, and removing bottlenecks in expanding production from Thar coal fields are some of the urgent steps that should be prioritised in 2025.

While Nepra’s annual State of Industry Report painstakingly highlights system inefficiencies, it is the responsibility of the concerned power agencies to address them. Hopefully, these agencies will benefit from the report by implementing its recommendations. Nepra might consider adding a new chapter in its future reports to compare the outcomes of its recommendations as adopted by the relevant agencies.

The writer was formerly the Director of Energy at the Islamic Development Bank and presently on critical energy issues and strategies.
Email: farrukhmian5@gmail.com

Published in Dawn, The Business and Finance Weekly, January 6th, 2025