No end in sight for energy crisis in Pakistan
09 August, 2012
ISLAMABAD: India may claim the world's biggest blackout, but in neighbouring Pakistan an endemic energy crisis blamed on years of mismanagement cripples the economy and makes millions of lives a daily misery.
Six weeks after the new prime minister in Islamabad promised the shortage would be his top priority, blackouts have reached a peak – reportedly up to 16 hours a day in urban areas and as much as 22 hours a day in the rural areas.
But with political posturing becoming more acute as the weak coalition stutters towards general elections, there is no quick end in sight.
Unprecedented power failures blacked out over half of India for two days last week, affecting more than 600 million people when three national grids collapsed.
But in Pakistan, shortages day in day out highlight chronic under-investment in infrastructure, long-term planning sacrificed to short-term expediency, lack of leadership, cronyism and corruption.
For ordinary people it is almost unbearable, particularly during the holy month of Ramazan with temperatures over 50 degrees Celsius.
Peak demand for electricity in the summer is around 18,000 megawatts, with a third of that coming from air-conditioning, but power companies only manage to supply 13,000 to 14,000 MW.
Angry protests and riots erupt every few days and the central bank has warned the energy shortages have effectively put a ceiling on economic growth.
The government's Planning Commission says power cuts shaved three to four percent off GDP in the financial year 2010-11, with industry bearing the brunt.
At the heart of the problem is the "circular debt", which the commission says stood at $4.4 billion in 2011-12.
The dual effect of the government setting low electricity prices and customers failing to pay for it means state utilities lose money, and cannot pay private power generating companies, which in turn cannot pay the oil and gas suppliers, who cut off the supply.
"It's a crisis of management, a crisis which has been born out of indecisiveness, born out of procrastination, not taking the decisions required at the right time," said Shahid Sattar, the Planning Commission's member for energy.
He dates the problem to the rule of Pervez Musharraf, when a massive boom in demand was not matched by investment in new power stations.
In mid-July, a Rs 12 billion bailout led to a noticeable let-up in the blackouts, but since then cuts have been as bad as ever.
Major projects such as the $12 billion Diamer Bhasha Dam, which is expected to generate 4,500MW, will not come online for another five or six years. The rivers and valleys of the north offer more than 50,000MW of untapped hydroelectric potential, but Sattar says power generated from it could be unreliable and cannot guarantee year-round supply.
Coal reserves have been found in the Thar desert, but the quality is uncertain and international donors are unwilling to pump money into such an environmentally damaging form of energy.
The government is keen to develop nuclear power as it tries to wean itself off expensive imported hydrocarbons – the country spends 7.5 percent of GDP on buying fuel, according to the Planning Commission. There are currently three nuclear plants generating a total of 740MW of power and there are plans to expand this to 8,800MW by 2030.
Efforts to reform publicly-owned generating and distribution companies have met fierce resistance – an attempt to replace the CEOs of power companies last year ended in failure after industrial action.
With Pakistan's 180 million population growing rapidly and demand rising by around 1,500MW every year, a daunting battle lies ahead.