Due to a shortage of US dollars, the government has made the decision to reduce furnace oil imports for electricity generation in Pakistan. As a result, citizens are expected to endure 3-5 hours of load-shedding during the peak summer season.
The country is currently facing an energy shortfall of approximately 4,000MW, leading to power outages lasting 2-3 hours, according to an Energy Ministry official. To address this issue, the National Economic Council (NEC) meeting, chaired by Prime Minister Shehbaz Sharif, decided to close commercial markets at 8 PM in the upcoming fiscal year as a means of conserving electricity. However, implementing this decision may face opposition from traders.
It is worth noting that Pakistan’s total generation capacity is 44,000MW, while the consumption stands at 21,500MW. Additionally, electricity customers have already paid nearly Rs. 900 billion in capacity charges, and this amount is expected to increase to Rs. 1,400 billion in 2023-24 due to a rise in the tariff structure for capacity payments.
Furthermore, the country is experiencing an increase in line and recovery losses, which result in additional losses with increased generation. The utilization of hydropower is also not optimized, as its full capacity of 9,400MW is not being utilized, with the current average generation being close to 4,000MW. Issues such as water releases and construction at Tarbela dam have led to a loss of approximately 1,410MW of electricity.
Similarly, the non-operational Neelum-Jehlum Hydropower Project has resulted in a shortage of 969MW. Challenges in construction and changes in water flows based on provinces have also contributed to the low electricity generation from Tarbela dam.
Presently, powerhouses are operating at only 13-64 percent of their capacity. The Energy Ministry official stated that despite the installed capacity of over 17,000MW in Independent Power Projects, they are currently generating only 7,700MW, operating at 45 percent capacity due to the prevailing liquidity crunch.