 Lenin said" socialism is equal to soviet(worker) pwoer plus electrification"

 2.3% of GDP is lost every year because of power shortages- ADB

 The cost of power generation in the country has escalalted by almost 40% - ADB
 The absence of enery is the main constraint for economic growth in Pakistan
 Abid Burki" the ongoign enery crisis has crippled Pakistan;s industry and economy"
 Economist and govt blame non-payment of bills as the main reason for the slow down

OVERVIEW OF CURRENT ENERGY

 INSTALLED CAPACITY= 37261MW (due to CPEC it has increased) (ECONOMIC SURVET OF

PAKISTAN)
 Independent Power Producers= 17551MW
 Demand= 28672MW (State of Industry report 2020 NEPRA)
 Average per-capita Consumption= 529 kwh/unit (State of Industry report 2020 NEPRA)
 Circular Debt= 2.327 Trillion

ISSUES;

GENERATION ISSUE; UNSTABLE ENERGY MIX-

 WE ARE PRODUCING ENERGY FROM EXPENSIVE RESOURCES- Thermal (oil etc imported)= 58.4 %
Current account deficit- devalue of the currency: Economic Surevy; dollar going out
 In 1980s; around 60% energy was produced from the hydro; thermal 40% -
 Around 40% of the world enery is produced through the coal but we not utilized it effectively
and banned it due to environmental issues

Poor performance of Generation Companies (GENCOs)

 their production has reduced to 1/3rd due to mismanagement

Transmission losses=

 18-20%- HIGHEST IN THE WORLD according to (STATE OF

 INDUSTRY REPORT 2020 NEPRA)
 China=5%, USA=6%, Malaysia 4%

Transmission Constraints

 Capability 22000MW only- Economic Survey 20-21

Consumer Related issues-

 Unstable Related Tarrif= 14-15rs, sold on 11, putting burden on govt

 Circular debt; 2.37 Trillion; 40-45 billion per month adding
 Poor Recovery; 80% State of Industry 20% deficit -- increasing circular debt also

Governance Issues;

 In 1990s WAPDA was responsible for all- from generation to distribution-- Now all
disintegrated= governance issues; red-tapism; now around 20 Organizations are dealing with it.
Failure to Create demand

 in USA 12,997 PER CAPITA UNIT; Pak 529 per capital- 2020 economic survey--- due to little
industrialization --- rise in prices

Private Power Policy- 1994;

 4.5 BILLION US DOLLAR INVESTMENT CAME; but we did not make policy to purchase the
energy-- they kept producing--- take or pay policy; capacity payments; we also did not make
mandatory for them to produce energy from the resources available (indigenous resources) in
the country
 1994 PRIVATE POWER POLICY- "DEAL OF THE DECADE"
 BACKGROUND- USSR disintegrated and the mantra of the world was that let market decide
everything; and everything will be fine.
 Bring the market in; take the govt out; It was the solution applied around the world
 US SECRETARY OF ENERGY, HAZEL O'LEARY described it as the " best energy policy in the world"
 US congress lauded O'Leary's mission: " Enerygy Secretary Hazel O'leary has just returened from
a highly successful mission to Pakistan, which has opened new doors to American business
leaders and may represent as well as important turning point in our diplomatic relations with
Pakistan"
 O'Leary was accompanied by 80 American business executives primarily from the energy secotor
(oil) resulting in the signing of 16 contracts worth nearly 4b$
 Gold Rush for Energy Sector;
 Independent Power Producers rushed Pakistan to invest;
 deal was that WAPDA will buy energy at us cent 6.5 per KWH
 Investors were to be provided a dollar based internal rate of return of 15%- 18% over the 25-30
years period of the power purchase agreement
 IPPS to be paid every month in two parts: Capacity payment and energy payment
 Capacity Payment; jitna generate karen gya uska 80% app daien gay!
 Energy payment; fuel ki payment b wapda; if pakistan ki currency devalue hoti phir b 1994 kay
dollar kay rate kay mutabik payment hoge; if dollar devalue hoga, payment phir b 1994!!! means
if rupees devalue; oil bill high. if dollar devalues; no issue

Solutions;

 rectifying the generation energy mix- hydropower

 Power theft and transmission losses; involving private sector in it
 Demand creation-- going for industrialization
 Rationalization- private sector policy
 Devolution of money collection to the union council level