Power in abundance, yet not in use

ISLAMABAD: The government Wednesday disclosed that power consumption in Pakistan had grown by a mere 0.5 percent annually over the past six years — a puzzling figure given the steady addition of new generation capacity. Despite this stagnation in demand, consumers are still on the hook for capacity charges, paying for underutilized infrastructure.

According to the data presented at a public hearing organized by Nepra, there has been no significant change in the electricity demand between 2018 and 2024. In July 2018, the total energy supply was 13,740 MW, compared to 14,918 MW in July 2024 — a difference of just 178 MW, or roughly 3 percent over six years. The Nepra noted that this 0.5 percent growth did not align with the country’s GDP or population growth.

The hearing was convened to consider a petition filed by the Central Power Purchase Agency (CPPA), which sought Nepra’s approval to refund Rs0.3142 per unit to consumers as part of a fuel charges adjustment (FCA) for July 2024. If approved, the consumers of Ex-Wapda distribution companies (XWDiscos) could receive a total benefit of Rs4.5 billion, with the relief appearing in their September bills, according to a CPPA official. The regulator reserved its judgment and will announce it at a later date.

During the hearing, Nepra also requested data on how much new generation capacity had been added to the system in the last six years. It was noted that the consumers were not only paying multi-billion-rupee capacity charges to power generators but also for transmission projects facing constraints in transmitting electricity from South to North Pakistan which has been underutilized since its installation. This 660kV HVDC Matiari-Lahore transmission line is capable of transmitting up to 4,000MW from South to North Pakistan, but due to constraints, it is significantly underutilized. An entrepreneur from Karachi highlighted that since the high-voltage direct current (HVDC) transmission line could not transmit beyond a certain limit, the unutilised capacity in the South could be channelled to K-Electric, which generated more expensive power due to its inefficient plants.

This has led to the operation of expensive furnace oil and imported RLNG-based power plants, while more economical generators in the south remain idle. As a result, the consumers are burdened with high electricity costs. These views were expressed during a public hearing on a petition filed by power distribution companies. Pakistan has faced transmission issues for several years, but efforts have largely focused on power generation projects rather than resolving the transmission bottlenecks. Commentators questioned why the government was adding more power capacity when the demand was lower than the installed capacity, ultimately leading the consumers to pay for unused capacity.

Nepra Sindh Member Rafiq Shaikh expressed concern over the rising electricity bills, stating that they have now exceeded some consumers’ rent. “In such a situation, our heads bow in shame,” he said. A National Transmission and Dispatch Company (NTDC) official noted that the consumers use an average of 12,000 to 13,000 MW of electricity but were being charged capacity payments for 40,000 MW.

Rafiq Shaikh questioned how much more relief could be provided if the system constraints were removed, and what the cost of removing these constraints would be to the consumers. The NTDC officials were unable to provide answers, prompting Nepra to express displeasure. It was also revealed that 4,500 MW of electricity could not be transmitted from South to North due to system constraints. Shaikh urged the NTDC to analyze the situation to determine responsibility.

Nepra Khyber Pakhtunkhwa Member Maqsood Anwer remarked that he had been hearing about constraints on the High-Voltage Direct Current (HDVC) line for four years. “My term as a member is ending, but there is still no solution to this problem,” Anwer said.

With more power capacity set to come online in the coming years, questions arise about who will bear the cost of capacity payments when the consumers are already under pressure from the existing charges. Concerns were also raised about the 969-MW Neelum-Jhelum hydropower project, which has been non-functional due to structural faults despite expenditure of hundreds of billions of rupees. Commentators asked why contractors were not being held accountable for these faults, noting the absence of warranties and guarantees, which had led to ongoing issues and additional costs for repairs and maintenance.