Using smart technological, managerial techniques: Rs550bn T&D losses can be reduced to half in only 6 months: expert

ISLAMABAD: The whopping Rs550 billion system losses could be reduced to half in just 6 months by using smart technological and managerial techniques that will help reduce the electricity tariff and provide relief to consumers.

The capacity charges payments of Rs2,010 billion to be paid by consumers in FY24 could also be tackled by strictly adhering to the Economic Merit Order, generating electricity through efficient power plants and increasing the demand for electricity, says Engineer Arshad H Abbasi, an eminent energy expert.

Talking to The News, Engineer Arshad H Abbasi said that after the Pakistani government admitted that it was powerless to stop the electricity prices, there was widespread public unrest challenging the national sovereignty. The main reason behind the electricity hike are unprecedented T& D losses, which are major components of the circular debt.

The T&D losses have increased to Rs550 billion, while consumers paid Rs1,300 billion in 2023 as Capacity Charges Payments, which are now estimated to reach Rs2,010 billion in 2024.

To address the grave issue, he sent a brief report to former prime minister Imran Khan in October 2021 and readdressed it again to his successor former prime minister Shehbaz Sharif in June 2022, said Abbasi.

“And to reduce the T&D losses by almost half, I again wrote an open letter to former premier Shehbaz Sharif and personally met one of his advisers.”

“I explained that the government took every measure to reduce T&D losses including promulgation of a law in the year 2016. The law was amended to ensure severe punishment for power theft. Under the law, the defaulter’s property could be confiscated and auctioned to recover the outstanding bills. Even in the presence of this law, the government failed to reduce T&D losses,” said Abbasi.

He explained that only by using smart technological and managerial techniques, the T&D losses could be reduced by 50 percent without any investment.

Abbasi disclosed that he himself mapped the T&D losses sub-division-wise of all DISCOs and shared in detail mapping with the bureaucracy. But it was in vain because it turned deaf ears to his advice and as a result the T&D losses are now touching the figure of Rs550 billion.

He also made an attempt to make the T&D losses to almost 4 percent according to world standards by using smart gird in December 2017 by inviting a Chinese firm but the-then prime minister refused the option for the latest technology.

“Smart grids are electricity networks that use digital technologies, sensors and software to better match the supply and demand of electricity in real-time while minimizing costs and maintaining the stability and reliability of the grid. India, using this smart gird technology, has reduced the T&D losses substantially.”

According to Engineer Arshad H. Abbasi, if the government is genuinely committed to lowering the cost of electricity tariffs for the general public and to making electricity affordable for businesses, the capacity charges can also be significantly reduced. This will enable Pakistani products to compete in the global market. However, it depends on the seriousness of the government and other national security-related institutions. “In the past, I had wasted my time and resources but the PM office did not respond,” Abbasi said.

He advised the government to first start the cleansing of the Ministry of Energy before revamping the power sector as the actors, who were part of this great national challenge, are now again trying to become a part of the solution.

In another comment, he claimed that the electricity and energy sectors could not be modernized or revamped in the absence of any efficient accountability structure.

Abbasi also pointed out the Pakistan authorities had poorly negotiated CPEC energy projects with China, due to which the capacity charges payments have emerged as a monster for electricity consumers.

He argued that while approving these projects, the Planning Commission, power ministry, and National Electricity Power Regulatory Authority (Nepra) never bothered to look into the EPC (Engineering, Procurement, and Construction) costs of CPEC energy projects. He also emphasized the importance of creating a secretariat for energy security.