thenews.com.

pk

Cutting losses
Naila Saleh
6-8 minutes

Pakistan’s energy sector has been facing potential losses and

distortions in the distribution sector for years now, costing the
national exchequer billions annually. In 2019 alone, DISCOs posted
a loss of Rs171 billion due to less recovery of pending bills and
another Rs38 billion due to technical losses.
On average, nearly 20 percent of the electricity transmitted to the
distribution system is lost the effects of which are borne by end
consumers. Due to these losses as well as reliance on imported
fuels, Pakistan’s power generation costs are disproportionately
high. These losses have also been significantly contributing to
circular debt.
Despite surplus energy, power cuts are widespread, especially in
high-loss feeders. While the country has long been seeking a
strategy to minimise these losses, these decade-old problems in
relation to technical and financial losses in the power sector as well
as the energy access gap continue; traditional intervention solutions
have been at the root of the ongoing unsustainable trajectory.
What can be done to improve distribution performance? As the
local context differs from region to region, a major discourse in the
specific case of Pakistan is how solar PV penetration in high-loss
configurations offers an ‘irresistible’ and ‘necessary’ alternative to
improve energy access (electrifying the last mile and improving
reliable access to energy) and address the longstanding technical
and inter-linked financial losses in the power sector. These
applications can potentially defer transformer and transmission
line upgrades, extend equipment maintenance intervals, reduce
electrical line losses, and improve distribution system reliability.
So, a logically compelling, economically viable and action-oriented
framework for RE uptake in Pakistan could be fostering solar PV
penetration in high-loss DISCOs. This, however, needs a realistic
action plan based on significant stakeholder support, alignment of
national and provincial electricity and energy policies and planning,
a facilitative and enabling environment, and consolidated changes
at each stage of the energy value chain.
The growth in decentralised PV has now unleashed myriad benefits
– particularly for developing countries with failing centralised
utility models. It offers most fertile space for leapfrogging
renewables in the context of Pakistan, where the prevailing energy
access gap has created an instinctive self-desire for prosumption
and already distilled a momentum for alternate energy systems.
Frustrated with decade-old injustices associated with the
centralised energy sector, many residents have switched to
decentralised modes of energy generation. Although these
decentralised configurations are largely undocumented, some
statistics do highlight its magnitude.
In a study, the International Finance Corporation has indicated that
an estimated $2.3 billion is spent annually on alternative lighting
alone in Pakistan. Another study indicates that more than 68
percent of the end-users rely on alternative back-up energy systems
(mostly UPS and fossil-fuel-run generators). So, reliance tends to be
more skewed towards other systems, and high carbon back-up
appliances have become mainstream technologies in the country.
A great share of energy consumption in the country originates from
the residential sector. Physical landscape – free rooftop space
available in the household sector – further align to drive solar PV
applications. Solar PV generation is also one of the world’s most
promising technologies and an emerging sustainable solution for
reducing losses. Generation close to consumption offers insulation
from the substantial transmission and distribution losses which
characterise the power sector of Pakistan. All this warrants
attention towards an optimal strategy and country-based solutions
to strategically sited DG uptake, which could contribute to the
versatility of energy sources, emission abatement and energy
security. It particularly provides three key major advantages:
encouraging renewable energy uptake, reducing distribution losses
and providing uninterrupted supply to end-users.
However, despite the strong suitability of distributed renewable
energy (DRE) systems in the context of case-country, it remains an
overlooked aspect in the national energy expansion plan. The
potential in this sector remains untapped due to lack of necessary
policy and institutional framework and strong inertia from DISCOs.
Among other factors, the high upfront cost of technology,
awareness gap, financial impediments, policy and regulatory design
faults, absence of facilitative organisation models, and overall
misalignments in policy, planning, and coordination have been
restricting its uptake.
In terms of reducing losses, the general principle directs that the
losses increase with an increase in the distance between generation
facilities and load centres. A well-chosen distributed generation
facility can decrease technical losses up to 15 percent. In parallel,
distributed generation is also a useful tool for the liberalisation of
energy markets. With the liberalisation of power and energy
markets, the reliability in energy supply and cost-benefit analysis is
assured. So, loss minimisation, reliability, sustainable energy
provision, and clean and cheap energy mechanism – all could be
aligned with the solar photovoltaic based distributed generation in
regions with high losses, interruption of power supply and high
consumption tariffs.
It is hence an opportune time to recommend a roadmap for
targeted solar photovoltaic (PV) applications in those feeders of
DISCOs that are experiencing excessive transmission losses. These
benefits will not materialise without a strategic approach to new
market regulations and innovative business models that supports
targeted PV uptake in high-loss zones. The relevant authorities
should anchor a facilitative organisation model around these
decentralised solutions – and on a priority basis.
The writer is a researcher based at the Policy Research Institute for
Equitable Development and Technical University, Berlin. She
tweets @NSaleh91