Politics and Pakistan’s Energy Crisis

Pakistan’s ensuing energy crisis is adding into already tense political milieu in the country. PTI formed provincial government in KPK after February 8th general elections.

Pakistan’s ensuing energy crisis is adding into already tense political milieu in the country. PTI formed provincial government in KPK after February 8th general elections. The province has been in deep economic crisis already due to its prolonged duel with Islamabad over NFC share, power cuts, and loadshedding.

During the previous month KP Chief Minister took matter into his own hand when he entered in a power grid station in DI Khan from where people had complained for 22 hours daily loadshedding.  PTI leaders in the other parts of the province carried out similar exercise in grid stations in their respective cities and this created a considerably unworkable situation for WAPDA which is a federal institution responsible for water and energy production and management across the country. Some FIRs were lodged against PTI local leaders but fortunately the situation was resolved through dialog and consultation between the province and center. It was announced on 27th May in a joint press release by CM KP and the representatives of federal government. According to the announcement, both parties overcame differences and agreed on less power cuts for KP, settling outstanding debts, and to resolve the challenge of line losses in KP. The situation has improved considerably since then but these incidents have left behind many questions, about the political approach of various political parties towards country’s decade old energy crisis, which needs to be answered!

Most obvious question in this regard remains that how a country with a potential of 40,000 – 70,000-megawatt hydro power potential landed in this crisis in the first place? Short answer is popular decisions to get quick results to sustain political capital. These popular decisions though fulfilled the growing demand of electricity for the time being but put Pakistan’s energy sector in a very dangerous trajectory.

Pakistan’s current energy crisis has its roots in 1990’s when the state decided to introduce Independent Power Producers (IPPs) who were allowed to produce electricity burning imported fossil fuels. Before 1994, hydro power was dominant source of electricity generation. Projects like Mangla and Tarbela ensured country’s electricity needs. Initially, it was told that it will be a temporary solution till a national consensus is secured over large hydropower projects on which Sindh and KPK had some technical concerns on water availability in Indus River system. Unfortunately, instead of resolving the concerns of smaller provinces or finding alternative for mega hydro projects, successive governments afterwards continued this trend of quick fixes for loadshedding through IPPs and consequently hydro power that was once dominant source of electricity in country’s power mix was replaced by expensive imported oil-based electricity generation.

During the last decade, while construction of Dia Mir Basha and Dasu hydro projects began Pakistan’s energy crisis morphed into an existential crisis i.e. circular payment crisis. This crisis was created during the PMLN’s last government from 2013-18 when new agreements with IPPs were signed once again to quickly fix the growing demand of electricity without losing political capital and clauses like “capacity surcharge” were introduced. Under this crisis, government of Pakistan will pay IPPs an agreed amount from foreign exchequer (e.g. in US Dollars) regardless the amount of electricity bought. Electricity bill to IPPs will be paid separately. These terms and conditions caused seriously payment crisis in energy sector (first in electricity and then in gas) and it forced the governments to increase the per unit price of electricity which created yet another crisis for Pakistani exporters who had to compete in the international markets against vendors who, in their countries, enjoy subsidized electricity prices which translates into lower cost of manufacturing. They offer goods and services at much lower prices making Pakistani exports to lose.

 As Pakistan is grappling with these cascading crises stemming out of poor energy planning during the last three decades issues like growing population, industrialization, line losses, power theft, and extremely poor efficiency of DISCOs and GENCOs and confusing policy towards IPPs are other pressing issues regarding energy sector where political parties are not paying any attention.

All political parties must refrain from using energy issue to settle scores. Energy sector holds strategic value for the homeland as it not only holds the key for prosperity and progress of future generation but also ensures their very survival. There must be a national consensus on energy security of the country and it must be treated something above political ambitions just like our strategic weapon program.

Merely fulfilling the demand of required number of Megawatts by expensive non-renewable resources like fossil fuel is not energy planning or energy security instead. This must serve as the biggest lesson learnt during the last three decades. Hydro and nuclear energy options must be exploited to their maximum potential as they can guarantee cheaper electricity for people and industries but also ensure complete Return on Investment (ROI). Diamir Basha and Dasu must not be the only big dams in the country. WAPDA has completed feasibility studies on many more similar projects. These must be initiated as soon as currently under-construction hydro powerplant get completed. IPPs running on fossil fuel must be banned in the country. Fresh investment in energy sector must be allowed only in hydro, solar or wind power plants. It is high time that political leadership sit together and contemplate on these suggestions at war footings as energy demand is rising by each passing day and taking politically motivated popular steps is only going to usher new perils for future generations and the state.  

Noureen Akhtar
Noureen Akhtar
Noureen Akhtar is a Ph.D. Scholar (SPIR-QAU) and has worked on various public policy issues as a Policy Consultant in the National Security Division (NSD), Prime Minister Office (PMO). Currently, she works in Islamabad Policy Research Institution (IPRI) as a Policy/ Research Consultant and Editor at Stratheia. Her work has been published in local and International publications. She can be reached at akhtarnoureen26[at]gmail.com. She Tweets @NoureenAkhtar16