Pakistan: Electricity crisis and circular debt

The electricity crisis being faced in the country is devastating for the economic survival as well as for the well being of the population. Not to speak of new ventures, existing factories and businesses are being shut down due to non availability of electricity which is rendering thousands of people out of job.

The national debt is galloping and the unrest in the population is mounting as there is no solution in sight. The signals for the looming crisis were visible for the last several years, but unfortunately no positive steps have so far been taken to rectify the situation.

The main cause of electricity crisis is the extremely high cost of generation primarily due to the faulty fuel mix being used to produce electricity. At present the total generation installed capacity is 21,000 MW. The peak demand is 15,000 MW, but the production is only 9,000-10,000 MW, resulting in 10-12 hours of load shedding. The root cause of the faulty fuel mix is the use of furnace oil as the main fuel to produce thermal electricity.

The months of January to May have very low hydropower available since reservoirs are empty and snow melt will not, start till June. The Tarbela reservoir receives about 95 percent of its water through snow melt. Read More