The Power Crisis
By Ahmad Faruqui, PhD
Dansville , CA
Pakistan is awash in a series of power crises but the one that carries the Orwellian name of load shedding trumps them all. Everyday – even on Pakistan Day –millions are without power for up to ten hours. In rural areas, power cuts last even longer.
Only the landed aristocracy and the nouveau riche with their back-up generators are not inconvenienced. The bourgeoisie subsist on uninterrupted power supplies but these only keep the computers on for a few hours, along with a few lights and fans. The proletariat, already fatigued by innumerable other crises, seem resigned to baking in 120 degree temperatures as the summer approaches.
But disquiet is building in the streets. Marx may have been wrong on a number of things but he was dead right on the damning consequences of letting class struggle fester.
The managing director of PEPCO is on record as saying that power cuts would end by December 2009. In any other country, he would be gone by now. In fact, given the magnitude of the costs being imposed on the economy, the parliamentary opposition would have successfully carried a motion of no-confidence against the prime minister.
To quell the public outcry, public statements are being issued daily. One quantified the power shortfall at 5,000 MW, caused by excessive load growth and drought conditions. Another said that load shedding would end in a fortnight. A third said that load shedding would be cut in the near future.
Load shedding, designed only to deal with extreme circumstances in most countries, has become the norm in Pakistan . Why?
Neither the government nor the utilities have diagnosed the problem. Is it a problem of insufficient generation capacity? If so, is it primarily a shortage of peaking generation capacity or base load generation capacity? Or is it primarily an energy shortage, caused by a shortage of fuels? Is it caused by excessive growth in demand?
No economist has bothered to estimate the cost of load shedding. That’s a pity because that might put the bureaucrats to shame and prod them into action.
Load shedding is not a new phenomenon. As noted in a report put out last year by the Consulate General of Switzerland on Pakistan’s Power Sector, it dates back to 1974. I recall visiting the WAPDA House twice in the 1980s and the 1990s. I proposed reforming the metering and pricing of power. Such a market-based approach to balancing demand and supply would be superior to load shedding.
Both times the response was the same. “None of those solutions would work in Pakistan. People don’t pay their bills. We can’t reform the tariffs because the people will simply bribe the meter readers. We can’t install the smart meters because we don’t have the money.” The excuses seemed to flow effortlessly from the tongue, unlike the electrons in the nation’s power lines.
The problem is not intractable. It can be solved. What it requires is careful long-range planning to ensure that power only goes out once in ten years, not ten hours in every single day.
Why is no one doing anything to fix a problem that goes back decades and that has become institutionalized in the national psyche? Maybe the problem persists because of apathy in the ruling class. The high and mighty live in mansions that are powered by layers of uninterruptible power supplies and on-site generators.
Is it because of corruption? A recent article in the Los Angeles Times spoke of the diabolical actions of the water mafia in Pakistan. Is there also a power mafia?
Or is it simply a case of gross incompetence and faulty planning? Building a few more power plants will not solve this problem. The problem is much deeper and complex. It will require the deployment of the smart grid.
In the US, the smart grid is projected to yield benefits that are valued at $500 billion over the next four decades. These benefits would include wiser use of energy which would reduce the need to burn expensive fuels, provide better balancing of demand and supply in real-time conditions thereby eliminating the need to build expensive peaking generators, improve system reliability, reduce dependence on imported fuels and lower pollution.
Today, four percent of US peak demand can be managed in real-time conditions to avoid black-outs. This number is projected to rise to nine percent over the next decade. The benefits of this incremental impact of five percent are estimated to be $35 billion. With the advent of smart pricing plans, the impact may rise to 20 percent.
In Europe, smart meters are being rolled out. Italy has found that smart meters are the best way to eliminate power theft. Every meter in the UK will be a smart meter by 2020, creating opportunities to save energy and protect the environment. Even France, which derives 80 percent of its power from nuclear plants, is deploying smart meters. If these smart meters were to be accompanied by smart prices, the benefits would amount to 53 billion Euros.
During the past decade, smart grid pilots involving almost 20,000 statistically representative customers have been carried out in the West. These have shown that electricity prices are the best way to balance demand and supply. When faced with higher prices during hours when the power system is critical, and when if nothing else was done load shedding would have to be implemented, customers lower peak load by 10 to 15 percent. If equipped with smart in-home controllers, they reduce load by 20 to 35 percent.
The smart grid is not just a concept that applies only to the rich countries. It is being actively considered by countries such as China, Columbia, Korea and Singapore all of which are hosting major international events this spring to explore its transformational powers.
Changing out the existing grid and introducing digital solid-state sensors and meters and appliances will require a sizeable investment. But for Pakistan such an investment is a necessity and not a luxury. The costs of not moving forward with the smart grid are dwarfed by the cost of load shedding.
The Strategic Dialogue in Washington concluded with a statement saying the two countries are seeking a “stable, enduring partnership.” The US has pledged to rebuild three aging power plants that date back to the early sixties but it needs to do more. Understandably, nuclear plants are not an option on the table. But building a smart grid should be.
ahmadfaruqui@gmail.com
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