SHAMSUL GHANI (shams_ghani@hotmail.com)
Feb 02 - 08, 2009

A recent article by one of the ex-finance ministers of the country reads:

"The basic cause (of energy crisis) is the utter failure of the Musharraf government to increase the supply of electricity to keep pace with the growing demand. While the installed generation capacity had increased by 53 per cent between 1994 and 1999 (from 11,320 MW to 17,400 MW, it increased by only 12 per cent between 1999 and 2007..."


"Over $6.5 billion was invested on arranging for 5,728 MW of power during 1994-96 (evident in shape of power stations set up during 1996-99). This led to issues of handling the surpluses against the earlier shortages. And WAPDA then under soldierly control, was at the greatest of loss to utilize the newly inducted generation capacity. The then president was convinced that the actual issue was the sale of surplus power and not any shortages around the corner - probably the reason for complacency thereafter"

The traditional finger pointing at those not readily available to explain their position has been the hallmark of our politicians. But the stark facts never fail to raise their "ugly" heads, as is the case in point. We all know that we were surplus on electricity till 2005. The demand and supply gap started to develop from 2006 and onward. Various projects with a cumulative capacity of three thousand plus megawatts were launched during the Musharraf era that terminated in October 2007. So, there is little to blame on his government. During 2008, we have experienced a shortfall of 4,000 to 5,000 MW which is unprecedented. This situation is the end product of a number of factors and has little to do with the generating capacity which at present is 19,540 MW. If we produce just 10,000 MW from the said generating capacity, then it is time to hold back our pointing fingers and take stock of the situation.

The problems facing the power sector are both of short term and long term nature. The short term problems can be broadly categorized as administrative, technical, financial and ethical. The power theft problem is purely administrative and the state administrative machinery is responsible for tackling it. The theft starts at the highest cadres of the society and percolates down to the masses who commit the social crime under duress. Once the theft at upper levels is controlled, the lower levels are likely to follow suit. Technically, the generation, transmission and distribution systems call for up-gradation and modernization to ensure minimum outages and optimum capacity utilization. This will need fresh investment for which public and private partnerships will have to be formed. These partnerships might need to go for international borrowing under the state umbrella. While the technical issues have their financial component, the circular debt problem is purely a financial roadblock. The overhauling of faulty transmission and distribution systems responsible for huge outages is also an investment issue and is to be solved through funds injection in the way suggested above. The main culprit is the circular debt problem that has stifled the entire power generating system. By hook or by crook, this issue has now to be resolved. Perhaps this is time to strike a bargain with the oil marketing and refining companies whose debts could be cleared provided they pay back to the government the money they have pocketed under unjust margins and duties regime. The debts owing to the generating companies should be cleared under the condition that they undertake the maximum capacity utilization and update their transmission systems. On the conservation side, the use of obsolete industrial technology requiring excessive power utilization needs to be checked. The big industries having their captive power generating facilities should be asked to make optimum use of these facilities. On the ethical side, the carrot and stick policy can be adopted. All illegal connection holders should be notified to get their connections legalized after payment of nominal charges. The legal domestic users who consume 45 percent of the total generation can be controlled through progressive unit-charge under a well-designed slab system. Domestic consumers using up to 100 units per month should be charged the minimum unit rate. The next slab should be from 101 units to 250 units and so on so forth. The benefit for using minimum electricity should be substantial on one hand and the cost of wastefully using power should be somewhat punitive on the other. This, by default, will inculcate in the masses a habit of being frugal on electricity.

The long term problems can broadly be categorized as political and optimal-mix problems. Nature has endowed us with such bounties as sea, rivers, gas and now coal. It is really unfortunate that purely for political reasons country's water resources could not be used productively. The biggest crime of the political parties is that they have foolishly agreed to disagree on the issue of dams' construction. This destructive attitude has made us subservient to the will of India who artfully uses our political deficiencies to her own advantage. We have knowingly given the water control in India's hands thereby putting our agriculture and energy sectors under severe pressure. Hydro power could have been our forte instead of an Achilles' heal which it presently is. The few, time-worn heavily silted dams are struggling to give output. The dwindling water levels are just enough to produce minimum electricity during the winter season. The optimal mix issue, when seen in the light of Planning Commission's vision-2030 energy program tabulated here below, gets a bit blurred. It seems that the Commission has relegated hydro power generation to the back burner and has opted to bank upon gas as major source of power generation. This is quite strange as country economists talk of a 60 - 40 or at least 50 - 50 hydro-thermal production mix.


Existing Capacity 6,400 5,940 160 6,460 400 180 19,540
2010 160 4,860 900 1,260 - 700 27,420
2015 300 7,550 3,000 7,570 900 800 47,540
2020 300 12,560 4,200 4,700 1,500 1,470 72,270
2025 300 22,490 5,400 5,600 2,000 2,700 110,760
2030 300 30,360 6,250 7,070 4,000 3,850 162,590
Total 7,760 83,760 19,910 32,660 8,800 9,700 162,590
%age 4.77 51.52 12.25 20.09 5.40 5.97 100

The lack of investment on gas exploration and extraction sides also makes gas a doubtful starter. We can expect the coal-based power generation to take the second spot after hydro, but visualizing a more than 50 per cent share from gas-based power production is not realistic. Hydel power is the cheapest and one should hope that the Commission revises its projections.

To sum up, the current power crisis is the outcome of various short term and long term problems briefly discussed here. In the current scenario, it is hardly related to the generating capacity of the system.