Saturday, August 3, 2013

Wrong National Power Policy in Pakistan

Saturday, August 03, 2013 - Government’s National Power Policy (NPP) is wrong. In its current form, NPP is headed to increase per unit electricity prices by 10-15% annually, fail to end loadshedding for next 3-4 years, get rid of circular debt, end subsidy, line losses and thefts. High prices will give incentive for corruption, theft and line losses. Without taking following steps, NPP cannot serve public, revive economy, protect water and food security, and allow Pakistan to uphold national, regional and strategic interests.
Government policy can help add more than 5GW to national grid. 4,70,000 homes are using solar panels in UK to generate 2.7GW electricity in addition to wind energy. In Germany, 1.3 million homes are using solar panels and generating 40% of country’s daytime electricity demand. Solar energy in Germany will reach grid parity in 2017. By shifting 9,40,000 homes on solar energy, Pakistan can free 5.4GW of electricity on national grid. One lac homes in Britain were equipped with rooftop solar panels in 2012 alone (Hot summer bestow solar power bounty on GB, July 23, the Guardian). China exported solar panels worth $12-14 bn to Europe in 2012. Government should give low interest loans (3-5%) to help public make use of duty free import of alternate equipment. Only rooftops electricity can help Pakistan end loadshedding between 3 months to one year instead of waiting for 3-4 years.
Solar energy is cheaper than gas, nuclear and coal. Brazil has decreased power prices by 20%. Reportedly, Brazilian government has set Rs. 5.50 per unit rate for alternate energy and Rs. 5.23 with fossil fuel for energy sector investors in 2nd national bidding on August 23 and 29, 2013 respectively. The first such bidding was held successfully in 2011 in which prices were around Rs. 6.00. The open bidding has allowed Brazil to reduce per unit electricity prices, keep transparency and end corruption in the energy sector. Pakistan can use the example to generate cheap electricity which will end need for subsidy, different tariffs and resurgence of circular debt (projected Rs 700bn annually), line losses and thefts.
Accordingly, Pakistan can generate a unit of electricity with solar panel at around Rs. 3.05. Similarly the price of wind energy has fallen to 4-6 cents/kwh (world wind output 285GW). Government needs to review 7GW coal based power generation because it is twice the price of solar power and will need many years to produce electricity. By announcing per unit price of alternate and fossil fuel electricity, Islamabad can attract investment in energy sector, provide cheap electricity to the country with 10-15% annual decrease, control line losses, theft and corruption in energy sector.
Pakistan must define its energy mix to protect its water security. According to International Energy Agency, 50% of world’s energy will come from alternate energy by 2030. Many countries will shift 30% of total energy output to alternate energy by 2015. Pakistan needs to generate 80% electricity from alternate energy, 15% from coal and 5% from other sources to protect its water security. Reportedly, 123MAF rainwater flows to sea annually. India is also building dams on Pakistani rivers, which will further exacerbate the problem. In line with other countries, Pakistan needs to build exclusive storages for water security. Without clear energy mix and timeline, federal and provincial governments cannot meet country’s future water needs for agriculture,drinking water and individual use. Alternate energy can help free water for national food security. Pakistan is using water to generate energy which results in water shortage in crop seasons. Alternate energy based power policy can allow policy makers to spend $20bn for developing mega water storages for agriculture sector exclusively. It will allow governments at federal and provincial levels to relocate 40 to 50 million people in Baluchistan, KPK, Southern Punjab and interior Sindh to expand agriculture sector as part of land reforms on lines of US Homestead Law, and China’s relocation of 250 million people to alleviate poverty.
Pakistan needs electricity Marshall Plan for rural areas on line of America. It will help cut inflation, fuel poverty at grassroots, improve exports, expand SMEs, empower women and children working in cottage industry and remote areas. More water and cheap alternate energy can create millions of jobs, make Pakistan a food basket of the region and allow value addition to agri-produce and products including cattle, dairy, fish, fruit and meat. Education should be made part of NPP. Higher Education Commission, universities and technical institutions should help overcome power crises. They should help agriculture, manufacturing and services sectors, communities, and government build/adopt alternate energy including solar panels, wind turbines,recycling equipment and biofuels. Electricity is 150-year old technology but Pakistan is still relying on foreign expertise. It speaks volumes about our planning, policies and education. More scholarships should be given in the fields of energy, recycling, water and food security. Print and electronic media should educate public on line of Green China (China Daily), Environment (the Guardian) and Futurist (France 24).
NPP should control profits in power sector. Reportedly, power producers are charging 30% profit against recommendations of 11-13% charges by international consumer protection organizations. Allegedly, fertilizer companies are making 600% by using cheap gas but failing to provide cheap products to farmers. Utility courts should protect consumers, recoup damage to their equipment and bring industrial profiteering under single digit. Government should be held accountable for failing to implement licensing agreements of power generators and industries requiring generating electricity indigenously, which has resulted in power shortages.