DELITESCENT 5,579 MW IN PAKISTAN

National Electric Power Regulatory Authority (NEPRA) is mandated to ensure that the interests of the investor and the customer are protected through judicious decisions based on transparent commercial principals and that the sector moves towards a competitive environment. NEPRA publishes “State of Industry Report” every year since year 2006, to share the energy sector data, views on performance of power sector and NEPRA’s contribution to improve the state of affairs of sector. However, either no analysis of this data is made by its financial and technical gurus or NEPRA is not entirely concerned about the interests of its consumers.

Everyone in the ministry of water and power is talking about shortage of 5,000 Megawatts of installed capacity in the country, ensuring that they are working hard to add more power projects to cope with this shortfall. However, probably none is aware of the fact that more than 5,500 Megawatts are already available in the system which is spoiled by the poor management of the office holders responsible for delivery of produced energy to end consumers. None is aware of the fact that only in year 2013-14, we have lost PKR 317 billion due to inefficiency and poor management, which caused PKR 15,000 overbilling on average, to every electricity consumer in the country. Moreover the average cost of electricity charged to each consumer i.e. PKR 13/KWh can be reduced to PKR 11/KWh, just by improving the efficiency of transmission and distribution network of electricity.

The claims above are not made in air and are calculated by the data published for public by NEPRA. The “State of Industry Report 2014” can be downloaded from http://nepra.org.pk/industryreports.htm. As per the report the total installed capacity of the country during year 2013-14 was 24,375 MW and the total energy generated 105,996 million kilowatt hours. Following is the detail of how and how much of this energy is delivered to final consumers.

Based on data shown above, it’s evident that system losses 32,739 million kilowatt hours which is 31% of the total energy produced on first hand. The system losses are unavoidable part of transmission and distribution network, however as per World Bank data, the average transmission and distribution losses are up to 8% during the last 5 years. The losses calculated above are average of the whole country which, if further broken down show that some Discos are losing more than 45% of the energy produced.

If we could reduce the system losses to world average i.e. 8% of total generation, we will be able to deliver and collect the bills for 97,516 million kilowatt hours. Most of the Discos are still profitable even in the presence of such losses and therefore the cost of electricity can be reduced by over supply of electricity as follows;

In current scenario, end consumer is charged PKR. 13/ KWh which is causing overbilling of PKR 1,250 per month to him due to inefficiencies of the system. As a whole 316.5 billion Rupees, excluding General Sales Tax are overcharged during the year from the consumers of electricity in country. If we include the impact of General Sales Tax, the total loss transferred to consumers summed above than 370 billion Rupees. Calculations are shown below.

The total energy generated in the country during year 2013-14 was 105,996 million kilowatt hours and it was generated with an installed capacity of 24,375 Megawatt, which shows that average plant utilization factor was 49.61%. Applying the same utilization factor, an installed capacity of 5,579 MW to generate 24,259 million kilowatt hours lost above standards due to inefficiency of the transmission and distribution network.

If we can eradicate the inadequacies in our network system, we can eliminate the current demand/ supply gap without any additional investment. Government should take measures to decrease these losses as speedy as possible and should release the burden of overbilling from the poor consumer. Based on statistics above, it is evident that consumers who pay their bills on time are punished by charging them with the amount unrecoverable from unfaithful consumers and departments. The more the inefficiency of authorities, the more the burden transferred to end consumer policy is unfair and must be addressed by ministry and NEPRA.