By Syed Marwan Shah ISLAMABAD, April 12 (INP-WealthPK): Pakistan continuously faces transmission and distribution losses, as in 2021 the amount of electricity lost through transmission and distribution was 21,746GWh, excluding K-Electric. In 2021, the financial cost of the transmission and distribution losses resulting from the breach of National Electric Power Regulatory Authority (NEPRA) targets reached Rs82.6 billion. The power distribution companies (DISCOs) lack the motivation to augment their efficiency and minimise losses due to the government bailouts to keep them afloat, weak regulation by the regulator, and mismanagement of the DISCOs, said Tuaha Adil, a Research Economist at PRIME Institute, Islamabad. Although the transmission and distribution losses have decreased in 2021 compared to 2020, some DISCOs like Hyderabad Electric Supply Company (HESCO), Peshawar Electric Supply Company (PESCO), Sukkur Electric Power Company (SEPCO), and Quetta Electric Supply Company (QESCO) are still experiencing huge losses. “The main reason behind the inability of the government to curtail transmission and distribution losses is the inadequate attention paid to the upgradation of infrastructure, and more focus on the generation,” Tuaha Adil said. He added that in 2021 the financial cost of the transmission and distribution losses was Rs82.6 billion, and the amount of electricity lost was 21,746GWh, excluding K-Electric. To cover the losses, the government has to pay subsidies, raise the base price or increase tariffs, while the ultimate burden of the inefficiency is borne by the end consumers. According to WealthPK research, the total installed generation capacity of the country was 39,772MW in 2021, compared to 38,719MW in 2020.  In 2021, the public sector power plants contributed 20,820MW, while private sector power plants contributed 18,925MW. The research economist informed that the country’s total power consumption in the peak summer season reaches around 26,000MW. The generation and consumption trends illustrate that the country has surplus generation capacity, but remains unutilised due to inadequate transmission and distribution infrastructure.

Solutions to the transmission and distribution losses

Pakistan has achieved surplus generation capacity, so the focus should be directed to the transmission and distribution segment of the power sector. “The resolution of the power sector woes comprises interventions at the policy and technical levels,” said Tuaha Adil. Privatization of DISCOs: The government lacks the resources to upgrade infrastructure on its own; therefore, the inclusion of private sector is imperative, which could be achieved through privatization of DISCOs. The revenues generated from the privatization then could be utilized for the upgradation of infrastructure. Mechanism for tariff determination: Currently, tariffs are determined based on NEPRA’s set targets of recovery, which are unrealistic and not reflective of the actual cost as acknowledged in the National Electricity Policy 2021. Therefore, recovery targets should be determined while considering ground realities with the inputs of DISCOs.

·       Technical reforms

  Tuaha Adil said technical reforms are vitally important to address transmission and distribution losses which may be suggested as under: Firstly, GIS Indexing and Network Mapping – GIS is envisaged as a tool for the development of consumer and electrical network databases, used by various applications like customer information systems, asset management, billing system, customer services, energy audit, and load flow studies. This involves conducting a GPS survey of consumer households, connected electrical feeders, and distribution transformers. All the consumers are then indexed and given a unique electrical address, making it possible to segregate consumers for energy audit and accounting purposes. Secondly, automated meter reading (AMR) foresees energy management to overcome the problems of manual readings. The preparation of an electrical network database, consumer indexing, and documentation is the first step towards effective AMR and correct energy accounting. Thirdly, energy audit and accounting anticipate that the AMR can be used to correctly identify the areas of low voltage, overloading, and causes of high energy losses. The AMR contributes to accountability and operational efficiency. Lastly, human resource development – the focus on capacity building of DISCOs employees and regulators should be the utmost priority of the government. Training of the entire staff along with mandatory workshops on the successful practices should be done on regular basis to keep them abreast of the developments in the technology.