Daily Times

Recent developments in the global energy markets have created an unprecedented and unique opportunity for our leaders to transform the seriously ailing power sector of the country into a viable and vibrant contributor to powering its development dreams. It would be unfortunate if they miss this opportunity by continuing to run this sector on traditional lines that will lock the nation into technologies and systems that will soon become stranded and a serious liability for the nation. They must, therefore, act quickly and effectively to check the currently unsustainable practices in the power sector and replace these with more sustainable ways of serving the society’s and economy’s demands for electricity.

In a recent article (Daily Times: June 27), this writer had noted that the world’s energy market had taken a favorable turn lately, opening up a historic window of opportunity for us. Small power plants have emerged that beat the cost and performance features of large plants. Renewables, even without government support, are proving competitive. Deployment of intelligent and smart devices and meters in the grid are unlocking new opportunities for squeezing more value from the existing assets and also for demand management. Affordable and modular battery storage technologies are enabling consumers to reduce, and even eliminate, their dependence on grid supply. Electric vehicles (EVs) are also opening up new vistas due to their dual role as loads well as sources of supply.

Our leaders and decision makers must not miss out on this historic opportunity to gradually phase out our dependence on large-sized, capital-intensive, and largely import-dependent supply and delivery schemes, a knot tied by imprudent decisions in the past which the nation now will have to untangle with its teeth. They must act quickly and effectively to capitalize on these developments to reorganize our electricity supply industry on a more decentralized and distributed “grid of the future”, instead of walking on the same track that will just accelerate this sector’s drift to bankruptcy.

With over 30 percent of our population still without grid access and the existing consumers literally choking under the prohibitively-expensive electricity prices

The change at any significant level, however, will not come at its own. In the absence of a strong political will and push from the top leadership, the new technologies and options will still find their way into the system, but may not be optimally integrated into it. To make that happen, the government will have to aggressively pursue for these opportunities. The great ancient Chinese military strategist, Sun Tzu, had observed in his timeless classic, The Art of War (equally popular in both military and business strategy circles), “Opportunities multiply as they are seized.” The government will have to move forward proactively to seize these opportunities, otherwise these might pass unnoticed.

Three essential features of a viable energy system for any country are its “affordability”, “security”, and “sustainability”. On all these counts, the decentralized and distributed renewable-based supplies outperform the traditional centralized grid. With over 30 percent of our population still without grid access and the existing consumers literally choking under the prohibitively-expensive electricity prices, demand-centric electricity supplies at significantly lower costs can provide the much-needed sigh of relief. These systems, for their reliance on ubiquitous renewable supplies will add to energy security of the country which can be even further enhanced by promoting their local manufacture. These will also be sustainable not just because they do not degrade the country’s ecosystem but also because they will promote substantial employment in the country throughout their value chain.

Our government will have to take four critical initiatives to capitalize on these new opportunities by: (i) setting a clear vision in a strategic plan to substitute central-station and mega-scale facilities with small-scale and distributed renewable power supply schemes; (ii) devising a set of policies to discourage mega-scale power supply projects, especially which base on foreign technologies and fuels; (iii) promoting lateral institutional structures and decentralized decision making; and (iv) catalyzing a visionary research & development (R&D) program to inform evidence-based policy formulation and decision-making in the country. We elaborate on each of these below:

First, the government will need to set a clear vision in a strategic plan to gradually phase out central-station and mega-scale conventional power supply schemes and substitute these with small-scale renewable power supply options at demand-ends or as close as possible to the end-users of electricity. This plan must be unified, integrated, and holistic by clearly identifying the most appropriate blending of various energy carriers, including electricity, in serving the various energy-based service needs of the people, businesses, and industries, transcending the typical boundaries among various sectors of the economy and their traditional reliance on specific fuels.

Second, devise a set of mutually-complementary policies to discourage future induction of mega-scale power generation and transmission projects, especially those which base on foreign technologies and fuel supplies. The traditional practice of preparing and issuing disjointed, piecemeal, and fragmented (and often at odd with each other) policies will not work. These policies should flow down from the national strategic plan, and must complement and reinforce each other to collectively lead the country in accomplishing the objectives and goals as defined in the strategic plan.

Third, promote decentralized decision making in the power sector by gradually lateralizing the existing vertical hierarchies in the power sector with more open and flexible organizational structures, and devolve decision-making as much as possible closer to the end-users of electricity, that is, the distribution companies (DISCOs). The government and regulator’s role should not be to micro-manage the entities downstream via a high-handed “command-and-control” approach but as intervention and regulation by exception, if indeed this is necessary. Before implementing any new government or regulatory initiative, a proper evaluation should be carried out to assess the benefit versus cost of this initiative compared with leaving it to the market.

Fourth, the government should catalyze with sufficient seed-funding a visionary R&D program in the country to promote distributed and renewable technologies, by suitably segregating it among the local institutions. This R&D should aim to provide the much-needed information base to devise evidence-based policy formulation and decision-making in the country. Instead of focusing on basic technology issues, this R&D should focus on the following (just as a pointer): (a) understanding consumer behavior with respect to their choice of built environment, selection of appliances and fixtures, and their patterns of use after purchase; (b) adoption of already commercial supply and demand technologies, existing barriers, financial and non-financial, to their wider uptake, and how these can be removed; and (c) renewable resource distributions at different resource-rich sites, their correlations with electricity demand, and the most feasible ways to match distributed supplies with consumer demand.

To sum it up, as the American president John F. Kennedy had observed, “Change is the law of life and those who look only to the past or present are certain to miss the future.” The country is arguably at a crossroads as far as energy is concerned. In fact, it’s a time for our government to choose. Continue with old comfortable routines of central-station and mega-sized power generation and supply schemes that are a surefire recipe for ruin for the country or take a bold decision right now and reconstruct this whole power sector’s monolithic, inefficient, and poorly-managed edifice and make it embrace with open arms the emerging trends of distributed renewable electricity supply options which hold great promise in setting the country’s power supply and delivery system on affordable, secure, and sustainable footings. Choice is obviously all ours.

The writer is a concerned citizen of this country. He can be reached via email at: msrahim@hotmail.com