KESC: LOAD SHEDDING IS NOT THE SOLUTION
Massive power theft may find a place in Guinness Book
By AMANULLAH BASHAR
Oct 16 - 22, 2000
Neither the power generation nor its transmission has anything to do with the current ordeal of a 2-hour loadshedding the people have to suffer everyday.
In fact the scheduled load shedding had to be imposed on the citizens because of the yawning gap between the number of power units dispatched by the KESC and the number of units billed. Obviously, the unbilled units consumed through illegal connections causing losses to the tune of Rs2.5 billion a month hence resulting in piling up of the financial liabilities of the power company. The power thieves and the corrupt with in the company are in fact punishing the genuine consumers.
Currently, the total power requirement is around 1800MW, which KESC is unable to supply in the present scenario of high rate of losses. Under the situation the KESC is left with two options. One is to bring down the rate of power theft by tracking down the wilful power thieves to reduce its losses or to curtail the volume of power production. KESC opted for the last one. The situation calls for creation a culture of energy conservation in our society. The culture to discourage the excessive use of electricity for unproductive purposes like illuminations of buildings and shopping plazas or marriage halls. In general the society seems to have accepted the culture of power theft. It does not seem to be a social ill any more. The social responsibility of the citizens demands to get rid of this stigma as early as possible lest we find a top place in the Guinness's Book of records as 'power thieves'.
To run its generation system, KESC needs Rs40 to Rs50 million every day to pay for the furnace oil to Pakistan State Oil (PSO). The price of furnace oil had gone up by 23 per cent in September alone while the overall increase in oil prices is 65-70 per cent.
Beside other factors forcing KESC to resort to load shedding, there seems to be a feeling or desire to punish the power thieves. People in KESC feel that load shedding has enabled to save the costly generated power from the hands of wilful thieves.
There is no doubt about it that such a massive power theft estimated 50-60 per cent has brought an ugly stigma both on the reputation of the KESC due to the corrupt staff and to the consumers as well. It is of course tragic that 50-60 per cent of the power dispatched by the KESC goes unbilled consequently causing the colossal financial losses to the tune of Rs2.5 billion to the KESC every month.
Keeping in view the larger national interest and safeguard the image of conducive investment climate in Pakistan, KESC should not go for the loadshedding as the solution to the financial problems it is faced with. A scheduled loadshedding programme in the KESC's franchised area has been introduced for the first time on the basis of unbearable expenditures on account of fuel oil purchases.
Thanks to the corrupt elements with in its ranks and files, KESC had never been in a good financial health and had experienced the similar situation in the past too when it was unable to pay for the oil. The power generation was never suspended on account of non-availability of fuel supplies. The federal government had always intervene the situation and the power generation was never allowed to be disrupted.
According to official sources, the public sectors organization both federal as well as the provincial government owe over Rs2 billion to KESC. Realizing the grave situation faced by the KESC, the government should come forward either by clearing the outstanding bills immediately or by directing the PSO to keep on supplies until the outstanding bills are paid.
It is unfortunate that right from the beginning of this month over 1.3 million consumers are forced to undergo an ordeal of a 2-hour load shedding being resorted to by the Karachi Electric Supply Corporation (KESC). Since the consumers have been divided into four zones and the each zone has to go through a 2-hour load shedding in rotation. Consequently, educational institute and hospitals have to suffer great hardships due to absence of electricity especially during morning and evening shifts.
After shutting off its 210 MW power generation unit at Bin Qasim, the KESC has divided the city in four zones and subjected each to 2-hour load shedding daily on the basis of rotation.
When asked how long the load shedding will last in Karachi, an official spokesman of the KESC said that serious efforts are being made to overcome the financial problems. In that connection constant meetings are going on with the government officials for the recovery of the outstanding bills against various government departments.
KESC is also negotiating for an early release of Rs10 billion from banking system, probably from Muslim Commercial Bank. The State Bank of Pakistan is supervising the deal, which hopefully will be finalized in the days to come.
The KESC had also requested the government for a subsidy of Rs4.3 billion to off-load its burden of the formidable oil prices; the request however was not entertained due to financial constraints faced by the government itself.
The solutions of the problems however lies in switching over to gas, cutting down power theft heavily and punishing the power thieves severely irrespective to the social status of the man responsible for power theft.
If the KESC generators had switched over to gas earlier at least 40 per cent of the resources of KESC would have been saved. The availability of gas however needs infrastructure and a pipeline network to supply the gas to the consumers. The development of a supply network is another problem area where huge investment is needed to take advantage of the natural resources available within the country.
KESC has to meet the city demand of 1800mw in the summer peak against the installed capacity of 1250MW of 6 units at Bin Qasim. The actual output of the 6 Bin Qasim Units, however are not more than 700MW. In order to bridge the gap, KESC has to buy 200-250 MW from the two IPPs i.e. Gul Ahmed and Tapal Energy operating under KESC's licensed area while 500-600 MW have to be imported from WAPDA.
Pakistan State Oil (PSO), the sole supplier of furnace oil, is supplying oil to KESC on cash basis. In the face of acute financial crunch, KESC had no option but to switch off one of the 210MW units at Bin Qasim which led to the current load shedding being carried out by the KESC.
Pakistan produces around 4,825 MW of hydro-electricity amounting to around 33 per cent of its total installed capacity. In addition a number of small and medium sized projects are being planned in its NorthWest Frontier Province with a potential of around 25000 MW of hydroelectricity. Feasibility reports of another 8 power projects with a capacity of around 3000 MW have been completed and while Bhasha and Ghazi Brotha projects are in advanced stages.
Unfortunately the developing countries including Pakistan have not paid their due attention to the development of alternate or renewable energy resources such as Solar energy, Sind Energy, Bio-mass energy, Tidal wave energy and Microhydel plants. By and large the per unit cost of these energies still remain much higher than those based on conventional energy technologies and will probably not be economical unless they could have the benefit of the economics of scale. The typical advantages of these technologies lie in their availability to work in isolated locations and their being environment friendly.
To encourage the use of solar energy, Pakistan should take advantage from the experiences of other developing countries. In India, the Indian Renewable Energy Development Agency (REDA) offers soft loan covering 85 per cent of system's cost to encourage the use of solar energy. These loans are repayable with interest of 2.5 per cent over a 10 years period. Siemens solar industries in India have completed a 3-year training in photovoltaic training programme. This would help producing photovoltaic cells locally in that county.
No significant wind energy station has been working in this region. The Tamil Nado government in India has however set up a center for Wind Energy Technology to undertake RCD, technology upgrading, testing, certification, standardization and training programme for this technology.
No project is to be set up in this region. The nearest and claimed to be the first of its kind is being set up in Zhoushan Islands in China and is expected to start work shortly.
This is the field where Pakistan and other countries of the region have done considerable work. Pakistan has not only undertaken feasibility studies for not only setting up such plants but have manufactured a substantial part of equipment.
As against the negligible use of nuclear technology for power production in this region including Pakistan, the proportion of nuclear power in the developing countries is on the increase. Even in 1991, 438 nuclear power stations were operating in 26 countries of the world with the following proportion for the developed countries.
Britain 2 per cent, USA 21 per cent, Japan 21 per cent, Germany 33 per cent, Bulgaria 36 per cent, Belgium 60 per cent, France 75 per cent of their respective total power generation capacity.
There is a dire need for preparing a comprehensive plan placing the power generation at affordable price on the top of the agenda. The plan should identify possible sources for power generation at a cheaper cost. Speeding development of our gas resources and construction of gas pipeline from Iran and Central Asian States may also be given the top position in our energy map.
One of the major causes which resulting power theft on such a massive scale is the high cost of electricity which on one hand making our products incompetitive in the export market and beyond the means of general consumers of low income group on the other hand. Bringing down the high tariff rates is perhaps the most challenging task before our economic managers.