Power crisis and regional angle

By Hussain Mohi-ud-Din Qadri

The unabated spate of load-shedding throughout Pakistan has made life difficult to live in
this sizzling summer. The unending energy crisis with power outages for more than 15
hours on daily basis has also dealt a severe blow to the national economy. Resultantly,
business units and factories are getting shut down and layoffs of the workers are reported
to be running in hundreds of thousands with grave implications for already burgeoning
unemployment and poverty. According to a careful estimate, the difference between
demand and supply is above five thousand megawatt, which is likely to increase as the
weather gets even hotter in the months of June and July.

The monster of load-shedding first raised its head in 2007 and the national power scene
has been becoming uglier with every passing year. There have been minor fluctuations
and readjustments between demand and supply due to weather and water factors but the
crisis on the whole has remained consistent in its lethality and ugliness. The criticality of
situation warranted urgent policy response at the highest level but the same was not
forthcoming, thanks to red-tapism and perennial malaise afflicting our decision-making
processes.

The questions arise in the background of severity of the crisis: has Pakistan in reality has
been deprived of treasure of energy? Do we have no alternative system to produce
electricity in the country? Can we establish energy market, the biggest in the region
through collaboration with neighbouring India and other countries?

These are the questions whose answers should be in the affirmative, which should not be
less than a glad tiding for the people hit hard by crises of different nature. Resort to
empty promises, a favourite pastime of the government, would not help. It is about time
that the government made practical strategies to resolve the energy crisis on the war
footing basis without any further delay.

Geographically Pakistan is located in a region where neighbouring country, India, is

emerging as an economic giant. Despite massive use of energy to meet the growing
demands of economic development, there is no load-shedding in India. Among other
countries of the region, Bangladesh is the only country whose local reservoirs of power
are more than that of Pakistan. Economically speaking, India is ahead of Pakistan and
Bangladesh but in terms of being self-sufficient in power, even Bangladesh is far ahead
of Pakistan. Islamabad stands at number three in the field of power generation. Despite
this power generation potential, the country suffers from the worst bouts of power crisis
courtesy internal and external factors. If Pakistan, India, Sri Lanka, Bangladesh and other
countries of the region launch power generation initiatives jointly, they cannot only
strengthen their diplomatic and economic ties but also earn precious foreign exchange by
exporting the surplus electricity. These countries are home to vast natural sources of
energy.

All countries of South Asia can launch a joint project of power grid. Nepal and Bhutan
are two countries blessed with maximum of natural gas, which is used more than
electricity. On the other hand, there are issues in regard to planning of natural resources
and installation of power lines to ensure flow of electricity in these countries of the
region. Despite this, when we look at the natural resources in these countries, it becomes
certain that only these countries forming the energy bloc would stand to benefit in the
future energy scenario. However, they would have to take steps to attract the attention of
international investors. If these countries succeed to formulate a joint strategy, it would
not only help them overcome their energy crunch, but also establish a trade bloc in South
Asia. A brief detail of some of the models is given here below to become self-sufficient
in the power sector:

According to an analysis undertaken in the countries of South Asia, it has become known
that if they formulate long-term policy of natural resources, they can save electricity from
6% to 13%. South African countries had undertaken this experiment first of all by which
the countries of the region were able to save up to 100 billion dollars. If the South Asian
countries take a leaf from the book of their African counterparts, there is no reason why
they do not become self-sufficient in energy resources. Implementation of this model
would also promote the intra-regional trade besides offering solution to the power crisis.
Pakistan should be a strong proponent of this model given its huge energy deficit and
demand. A long-term policy will need to be worked out spanning over 10 to 12 years.
The broad contours of policy would include power agreements, long-term policy, and
cooperation in the field of engineering etc. The government of Pakistan has already
formulated a ten year plan but it is not in sync with the ground realities. There is a
difference between resources and planning.

By acting upon this model named as South Asian Power Pool, Pakistan, India and other
regional countries can become success stories in the conservation and self-sufficiency of
natural resources. The major benefits accruing from this model are the way out of present
power crisis and enhancement of regional trade through striking of preferential trade
agreements. Import of hydropower from India, Bhutan and Nepal can provide us with a
big push to go ahead with this plan. Last but not the least, the South Asian countries can
ink a regional agreement known as South Asian Regional Energy Trade (SARET) based
on revolutionary steps to enhance energy trade in the region.

However, in order to ease out the situation, urgent measures need to be taken. This
includes the equal distribution of load-shedding throughout Pakistan without any
exception. The issues of non-payment to IPPs and circular debt need to be sorted out as a
matter of priority to generate electricity according to full installed capacity. The matter of
import of electricity from Iran should be dealt with on priority basis besides working out
workable strategy to cut down line losses, which are the major source of wastage of
electricity in the country.

To conclude, it can be said that energy crunch is both regional and global issue and
regional efforts need to be made to overcome this deficit. Time is long past when issues
of urgent nature were kept pending due to political expediency. Pakistan, a country hit
hard by power crisis, needs to reach out to Iran, Turkey and other central Asian countries
for import of electricity on urgent basis to ease things out. Time to act is now.

The writer is a PhD candidate in Economics at an

Australian University