Increasing socio-economic costs due to energy shortages in Pakistan

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By M. Osman Ghani

There was a time when the inhabitants of a small town or a village used to become jubilant and joyous at the installation of a transmission line and a grid station in their periphery. The happy faces were mainly because electricity meant a better life, ushering in an era of prosperity and thus a more comfortable life. Villagers having access to electricity supposed themselves as more fortunate than those who were still living in the darkness and in mosquito-infested localities, longing to see the shining bulbs in their drawing rooms and bed rooms. But, now-a-days, I suppose, due to frequent and punishing load-shedding villagers are less inclined for electricity supply in their villages. After continuously passing through dark nights and hot summer days without electricity and at the end of the month getting an inflated electricity-bill a village consumer would surely not suppose himself as happier than the one who does not need to pay a bill at all. While longest hours of load-shedding is punishing the majority of consumers, both in the cities and villages, some unscrupulous consumers nevertheless resort to electricity theft with the connivance of the linemen and the meter readers putting extra burden on the honest consumers.

All physical system suffers loss through attrition. During the generation process nearly four per cent of electricity produced is lost through things like friction, noise and heat loss. This percentage is pretty much the same through-out the world. But around the world, the average loss along the transmission and distributing network is in the 7-9 per cent region. In Pakistan, the transmission and distribution loss at up to 30-35 per cent is simply bewildering. It mainly reflects criminal negligence and corruption in the system. It is, in fact, a major contributor to load-shedding and hike in monthly electricity bills. Per capita consumption of energy is very low in Pakistan compared to average consumption and in some regional countries. For example, Word average per capita energy use is 65 million Btus, in China and Malaysia per capita consumption are 34 million Btus and 92 million Btus, respectively while in Pakistan it is just 14 million Btus.

Pakistan’s electricity problem is getting from bad to worse. And despite assurances being given by the Minister of Water and Power of the end of the long persisted agony by December, 2009 very few people are ready to buy his story at the moment.

The government estimates the supply demand gap of electricity is about 4000 MW, while some other estimates put the figure at higher level. Presently with the exception of some thermal units being constructed here and there no major initiative is being seen in the exploitation of hydel-potential or huge reservoir of coal. Total installed electricity generation capacity in Pakistan is stagnated at around 20,000 MW for the last so many years. Pakistan despite possessing immense potential of conventional and alternative energy resources remained an energy deficient country and it has been meeting bulk of its energy needs mainly through costly imported fuel. The national oil import bill is one of the heaviest burdens on the national exchequer.

The year 2008 is experiencing a very hot and long summer. During April – May some major cities were being put through 6 – 8 hours of load-shedding every day. Another hour may be added in June. Situation may start improving in July as the reservoirs will begin to be filled if there is timely onset of the monsoon. But once the dry season start in October – November the duration of load-shedding will begin to increase again. Unless and until some appropriate and visible efforts are made by the government with effective participation of the private sector gloomy energy situation will continue only hampering the march to more productivity and prosperity.

Now, what are the accumulated social and economic costs of perennial energy shortages and frequent electricity load-shedding in Pakistan? The population of Pakistan is increasing at about 2 per cent per annum and demand for electricity is growing by about 9 per cent per annum whereas supply is increasing at a much lower rate giving rise to mounting back logs and supply shortage. Only 60 per cent of the households in Pakistan have access to electricity while only 18 per cent of the households get regular gas supply. Thus a huge number of populations still live primitive life without electricity, gas and other modern gazettes of living and their contribution to the national economy is constrained by various limitations. If electricity and other energy supply are ensured to 100 per cent of the population at affordable cost national productivity would definitely increase. As in may other fields, Pakistan is facing a very serious crisis in the power/electricity generation sector. In fact, according to a recent estimate around 67 per cent of our population continues to living in darkness even in this modern era.

The continuing power crisis is not only disrupting the daily lives of people and their business activities but also badly affecting their ability to future productivity. It has impeded the growth of both small-scale and large-scale business. Industrial progress is in shambles owing to the unpredictable and the unreliable power supply. People are forced to deal with the day long interruptions in electrify and have to suffer in the intolerable heat and humidity with no logical solution in sigh. Electricity is a necessity in the modern society and its shortage not only dampens the spirits of the people but also hampers social lives to a standstill.

Due to shortages and higher costs of energy vital sectors of the economy are badly suffering including agriculture, large scale industries, SMEs and international trade. The export oriented industries, especially the textile sector is wailing due to drastic reduction in demands in the export market. For example the spinning units are suffering heavy operational losses mainly due to worst power shortages in the country along-with high interest rates. Power cut coupled with an increase in gas prices has created a shortage of fabrics especially in Faisalabad which has resulted in difficulties for apparel manufacturers and textile exporters trying to meet their shipment targets. It is estimated that export sector will incur losses of billions of dollars mainly due to power shortages. Farming activities through tube well irrigation system is now beyond the capacity of poor farmers. Retail and small business is also rapidly contracting due to high cost of utilities. If this power shortage continues small businesses and marginal farmers may be eliminated soon causing huge socio-economic problems.

The nation is also bearing the burden of huge social cost due to lack of electricity and energy shortages. Frequent load-shedding in the unbearable hot summer is creating severe health problems like sunstroke, dehydration and other mental and physical disease. Combined economic and social costs of shortages of energy and frequent load shedding may run into trillion of rupees. This huge national loss need to be overcome as early as possible through short-term and long-term planning for the energy sector. It is estimated that Pakistan would need $ 14.5 billion investment in the energy sector in the next 10 years, to accelerate energy availability. However, for this all viable sources need to be utilised including coal and renewable. As per a recent statement of the Prime Minister, Pakistan has immense potential of renewable energy sources including 350,000 MW of Wind Power potential alone. Even if half of this Wind Power potential is utilised in the next 10 years Pakistan’s electricity shortages could be effectively met. To improve electricity supply under the existing set-up a scientific method of monitoring of line losses and power theft should be introduced. Bad elements present in the power system need to be stemmed out and punished in public as deterrence to others. Power losses need to be brought down to single digit otherwise the nation will continue to suffer and the economy will continue to incur losses.

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