Needed exclusively for industrial consumers

Feb 10 - 23, 2003 

The Karachi Electric Supply Corporation (KESC) has to cater to the power needs of around 2 million power consumers which include 1.7 legal consumers and the remaining must be the Kunda users. These illegal users of power at the cost of the genuine consumers really have a killing effect both on the power supplying companies as well as adversely affecting economic growth of the country.

According to industry sources, fed up with the complexities of the system to get new connections or get increase the load demand, most of the new industrial consumers are shifting over to the self power generation by installing self-operated generators.

Obviously, this should the most worrying aspect that electricity consumption has been the declining the share of industry in total demand.

The composition of the power consumers indicates that Karachi is surrounded by industrial sectors all around. The main industrial estates are the SITE industrial area in the northern part of the city while another large industrial area is in the east Korangi Industrial area. The West Wharf industrial area is in the South of the city while Federal B Area and North Karachi lies in the Central part of the city.

KESC having a capacity of 1250MW has to feed the electricity demand of the entire domestic, commercial and the industrial consumers from the available resources. It has to manage the shortfall by shifting of the cap from industry to the commercial and commercial to the domestic consumers.

Apart from the captive power plant operated by the industrial units themselves, the current power consumption is over 500MW while the industry has a demand to increase another 500 Mw to meet its electricity requirement.

The industry circles are of the view that in order to encourage and push up power consumption of the industrial sector which is the real driver of the economy, Karachi needs yet another power plant from 500-100- MW exclusively for industrial consumers.

This proposed plant if allowed would adequately satisfy the power requirement of the industrial sector and save the domestic users from day to day load-shedding or breakdowns.

It may be recalled that the management of KESC had suggested to the Ministry of Power for another power plant either in the private sector or by KESC itself to reduce reliance on the borrowed power from WAPDA sources. Currently, KESC has to buy electricity from two IPPs operating in KESC's franchised area i.e. Gul Ahmed and Tapal energy. These two IPPs are supplying around 250MW a day, besides a nominal support from KANNUP and the Pakistan Steel. However, KESC has to depend on supplies from WAPDA usually gives around 400MW a day to KESC to feed its consumers.

There seems to be no outcome of the move so far. Since the government was intended to privatize the KESC, obviously the fresh investment in power sector should come through the private sector which has jumped from nil to 50 per cent in power production during last 6-7 years.

As far as consumption of electricity by industry sector was concerned, it grew only by an annual compound rate of 1.7 per cent during 1991-99. That resulted in its share coming down to 28 per cent in 1999 from 36 per cent in 1991. It was only after 2002 that industrial consumption of electricity really picked up. However, during 2002 industrial consumption of electricity grew by 5.5 per cent against 8.7 per cent in 2001, reflecting either a reduced growth of industrial production during the outgoing fiscal year or else increase reliance on international generation.


Despite frequent increases in tariffs since the early 1990s, electricity consumption has managed to hold to a share of approximately 10 per cent in total commercial energy consumption, with an annual compound growth of 4.8 per cent for the period.

After registering a small increase since 1997 and a decline in 1999, electricity consumption has shown strong positive growth thereafter.

Consumption of electricity registered a growth in electricity demand over the last few years can be attributed mainly to a rise in the number of consumers as a result of village electrification programs and sustained efforts by WAPDA to put power theft under check. By end of 2002, the number of electricity consumers was 12.7 million as against 11.6 in 2000.

Since the introduction of the Power Policy of 1994, the electricity sector has undergone substantial structural changes. The policy envisaged the participation of private sector in power generation through new projects as well as privatization of state-owned units. It succeeded in drawing substantial foreign investment in new power generation projects, largely addressing the power shortages in the economy.

As new power generation units were set up in both the public as well as private sector, the installed capacity of electricity generation increased from 13.0 Giga Watt (GW) in the financial year 1996 to 17.4 GW in 2000 and subsequently to 18 GW 2002.

The increase in the installed capacity of the country during the last two years was brought about by the addition of Chasma Nuclear Power Plant 325 MW, Chasma Hydropower Project 184 MW and Liberty Power 235 MW.