Pakistan: Electricity demand to surge by 48 percent in the next decade, need to build power plants

Business Sunday 30/July/2023 10:14 AM
Pakistan: Electricity demand to surge by 48 percent in the next decade, need to build power plants

Islamabad: Following the soaring demand of electricity, Pakistan may need to build power plants within respective deadlines and bring in additional cheaper power sources, according to a study, reported The News International.

The study highlighted that Pakistan's electricity demand will increase by 48 per cent in the next decade from 154 terawatt-hours in fiscal year 2022 to 228 terawatt-hours in fiscal year 2031.

“To meet the escalating demand for electricity, Pakistan must construct and connect additional power to the national grid.Moreover, the existing power plants pose a financial burden due to their high operational costs, necessitating their displacement with cheaper power sources,” the latest study 'Powering Pakistan' conducted by the Policy Research Institute for Equitable Development (PRIED) and Renewables First said.

The report further emphasised that the Indicative Generation Capacity Expansion Plan (IGCEP)

Along with pointing out the need of power plants that must be built, the Indicative Generation Capacity Expansion Plan (IGCEP) also outlines their respective timelines, the report added, according to The News International.

The IGCEP is a comprehensive planning document approved by the National Electric Power Regularity Authority (NEPRA) and is prepared annually by the National Transmission Despatch Company (NTDC).

The latest approved IGCEP noted that approximately 30GW of new power plants will be built and integrated into the national grid over the next decade.

However, the initiative will demand an investment of around USD 40 billion, reported The News International.

The study further mentioned that IGCEP imposes some unpredictable and unexplained constraints on candidate RE projects that lead to a lower share of wind and solar technologies in the national grid.

According to The News International, the report said that Pakistan has been facing the risk of constructing expensive and inefficient power plants worth billions of dollars. The burden of such careless decisions will fall on the shoulders of people of Pakistan and these people will then have to pay these costs in the upcoming years.

The lack of transparency in the power planning process not only results in expensive fuel cost for electricity generation, but also contributes to the ongoing problem of increasing circular debt. Moreover, the power plants have been built without proper planning since decades now, the report added.

Furthermore, the report pointed out that Pakistan is now burdened with costly plants and commitments which people have been struggling to pay for, The News International reported.

Pakistanis paid Rs 41 billion for partial load adjustment charges in 2022, resulting from the underutilisation of thermal power plants (with only 46 percent utilization) and Rs 721 billion in capacity payments, the report said. (