Load shedding and Pakistan seem to be inseparable. As the sun blooms in all its splendour, daytime temperatures become unbearable and incessant outages of power cause life to be piping hot yet again. Public criticism seems to have gone up. Energy shortages are once again front page news. In all honesty, the Sharifs don’t give a fig about the emergent situation. The ace politician has been too busy, of late, defending his money stashed at the May Fair, London. However, excessive load shedding may knock the Sharifs off their perch. In their last election campaign, the PML-N had rallied the public behind its slogans of “zero load shedding”. The energy crisis was as threatening back then as it seems to have become now. A lot of compulsive chatter, coupled with faithful acolytes, had yielded them a victory in the 2013 general elections. However, if the present misery caused by incessant power tripping lingers on, they are sure to lose their way into another term in government in 2018. Load shedding has once again infested Pakistan like a plague, devastating economic life across the country.
Let us examine what genuinely seems to be the problem here. Demand for power in the country wobbles in the range of 18,000 – 20,000 MW during peak summer months. However, with its current generation capacity, the national grid can supply up to a maximum of 12,000 MW. Simple arithmetic yields a supply demand gap of 7,000 MW on average.
The power sector remains as cash starved as it was in the beginning of the N-league tenure. The circular debt has ballooned to a nerve racking level of over Rs 500 billion. What leads to circular debt is hardly a puzzle anymore. Pakistan’s power distribution utilities periodically determine their tariffs. Once these utilities are done with their calculations, they file a petition with the National Electric Power Regulatory Authority NEPRA) which then determines its own tariff through a series of dialogues held with senior energy sector minds in the country. Once a rational, cost reflective tariff has been determined, the NEPRA sends it for the government’s approval. The government, in violation of the NEPRA Act of 1998/99, frequently lowers the tariffs, and notifies uniform tariffs across all the utilities in the country. The difference between a cost reflective tariff and one notified by the government is then paid by the Ministry of Finance as tariff differential subsidies. This has serious ramifications for the government’s already edgy fiscal purse. In a country like Pakistan, with disappointingly low tax-to-GDP ratios and an ugly external debt profile, having circular debt on your books can be ravaging. Then, there are system deficiencies. Not only is Pakistan’s generation capacity below par, but its transmission and distribution infrastructure is in complete tatters and sorely in need of repairs. The clamour about adding more general capacity to the national grid makes little sense, if concurrently, no capacity enhancements are made in the already bloated transmission lines. After all, what good is additional power, if it cannot be transmitted to the end user.
Given that Pakistan recurrently hauls back to frequent and unscheduled load shedding, I believe that the persons in charge of the situation have not had a good handle on the subject. As successive governments over the years have made a hash of the national grid, there is clearly a strong case for off grid solutions to the country’s power crisis. Pakistan is located in a region exposed to considerable sunlight around the year. Its solar power generation potential exceeds 50,000 MW. Analysts well-versed in the engineering details of such a scheme have repeatedly harped on going off grid. Load shedding, if not controlled, will continue to be a drag on the economy. Economists and rational thinkers, endowed with brains far more superior than mine, estimate that the economic cost of load shedding runs into billions of dollars. Why then our governments have been so dead on their feet? Does it usually take decades to get a hang of an economic problem? Have we not suffered enough discomfort already? Are those entrusted with the task of ensuring uninterrupted power supply to the nation suitable for the job?
The writer is an alumnus of the University of Cambridge and an economist. He previously worked as a journalist in London and has also played for Pakistan’s Junior cricket team