Anjum Nisar says energy efficiency, conservation key measures to mitigate risks
Islamabad
The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has stressed the need for overhauling the power sector, through some drastic measures as the total cost of inefficiencies in the power sector is estimated at a whopping Rs9.4 trillion during the last 15 years.
FPCCI former president and BMP Chairman Mian Anjum Nisar stated that in present scenario the energy efficiency and conservation are key measures used by countries across the globe to mitigate associated risks. However, in the case of Pakistan, both energy efficiency and conservation were generally treated as alien concepts.
Referring to a report, he said that the stock of circular debt has surpassed Rs 2.3 trillion level, while the government budgetary support has reached Rs 4.9 trillion, besides borrowing cost of budgetary support is computed at Rs 2.4 trillion during this period.
He said that Pakistan, being a net importer of energy resources, was facing serious supply-side challenges, as the global price of crude oil and imported coal had witnessed an increase of 32 percent and 103 respectively only in the last nine months, leading to a significant threat to country’s energy security.
Mian Anjum Nisar said that the sector needs to be deregulated in letter and spirit, as nothing can work unless the DISCOs are truly empowered and allowed to act independently.
He pointed out that the power sector has been suffering from miss-governance, lack of DISCOs’ competence and missing coordination between the generation and distribution systems.
The sector alone can drag the economy down to an abyss unless it is resolved. And for that to happen, nothing short of deregulation and privatization will work, as successive governments have used the energy sector for their political gains by taking decisions that have resulted in unabated rise of circular debt.
Quoting the figure, he said that energy consumption for FY 2020-21 stood at 60.2 million tons of oil equivalent, registering an increase of more than 15 percent over the previous year.
This situation was becoming unsustainable for the country and warranted a concerted effort, at the national level, for implementation of energy efficiency and conservation measures, across the energy value chain. So, the government will have to review the situation holistically with a mandate to consider and recommend measures to be taken for conservation of energy.
He noted that there was an urgent need for up-gradation of energy efficiency and conservation standards and strict enforcement, besides replacement of inefficient appliances and consumer awareness for responsible use of energy were other key areas which should be identified for action as a national priority.
He estimated that a dollar outflow of around $ 1.150 billion could be potentially saved annually through implementation of efficiency and conservation measures.
He said that enforcement of administrative measures like hybrid work model, closure of commercial markets at 8pm and alternate switching of streetlights are must as this will result in saving to the tune of 568 million dollars annually through fuel and electricity savings.
In the same way switching to LED lights from traditional incandescent bulbs will enable annual savings of $ 103 million, as approximately 2.65 million fans out of total annual production of 7 million, are inefficient and cause a loss of around 0.68 billion units annually.
He said that ban on production of inefficient fans shall enable savings of around $ 69 million annually while existing installed water geysers consume around 105 million MMBTUS of gas annually which can be reduced by 25 percent through installation of conical baffles. Accordingly, installation of conical baffles in the existing water geysers should be progressively ensured to enable annual saving of around $ 419 million through gas conservation annually.
Pointing out electricity connections of over 300,000 primary and secondary schools, he suggested that school solarization could result in substantial savings. He pointed out that in Sindh, the line losses ran as high as 9 percent over and above the percentage allowed by Nepra. He informed that theft and line losses should be addressed through advanced metering and cabling.
Pakistan’s economy has been under adverse external conditions, due to spillovers from the war in Ukraine, and domestic challenges, including from accommodative policies that resulted in uneven and unbalanced growth.
Steadfast implementation of corrective policies and reforms remain essential to regain macroeconomic stability, address imbalances and lay the foundation for inclusive and sustainable growth.
Efforts to strengthen the viability of the energy sector and reduce unsustainable losses are also essential. Further efforts to reduce poverty and protect the most vulnerable by enhancing targeted transfers are important, especially in the current high inflation environment.
The FPCCI former President said that the government is not ready yet to undertake structural reforms related to circular debt and management of state owned enterprises (SOEs). Moreover, reliance on indirect taxes for meeting revenue goals is also a major issue meaning thereby that government should improve its taxation system if it wants to create a business friendly environment.
We need a comprehensive plan to revamp or privatize SOEs as a significant portion of our revenue is directed towards these loss-making entities whereas the same can be used for developmental projects to facilitate businesses and public at large. Such projects will not only improve our infrastructure but also help to generate sufficient revenue to invest in the social sector.
