Targeted Investments, Digitization Indispensable for Power Security: Experts

Digitization is the future and it must be tailored toward addressing the lack of electricity transmission infrastructure to ensure price affordability and accessibility to consumers.

Targeted investments and digital transformation must go hand-in-hand with effective resource management, thoughtful policy development, governance reforms as well as innovation in system planning, highlighted experts during a hybrid seminar titled “Powering Progress: Investments and Digitization to Overcome Pakistan’s Power Sector Challenges,” held at the Institute of Policy Studies (IPS), Islamabad.

The session was chaired by Former Federal Secretary Water Ministry Ashfaq Mahmood and was addressed by IPS Chairman Khalid Rahman, IPS Steering Committee for Energy, Water & Climate Change Chairman Mirza Hamid Hassan, NEPRA Registrar Mazhar Iqbal Ranjha, K-Electric CMCO Sadia Dada, former GM of NTDC Salahuddin Rifai, and other eminent energy experts associated with IPS.

Energy dependency is a major issue and Pakistan needs to escape the vicious cycle through out-of-the-box thinking and win-win solutions at policy and practice level, said Khalid Rahman in his opening remarks.

The power sector must be focused on overcoming the energy trilemma revolving around the availability, accessibility, and affordability of electricity, said Sadia Dada. For that, the power industry must integrate new solutions and ensure targeted investments, she added.

While drawing on the modeling of the power system undertaken by K-Electric (KE), she said that since privatization the company has made a targeted investment of Rs. 474 billion– six times more than its profit – across its value chain that has resulted in doubling its customer base from 1.8 million to 3.4 million, increasing its energy supplies from 2,200 MW to 3,380 MW, and reducing its transmission and distribution (T&D) losses from 34.2 percent to 15.3 percent which surpasses the target set by NEPRA for the year.

She further added that keeping in view the rising power demand in its serving territory, K-Electric plans to invest additional 484 billion rupees for the next seven years, which would add 2,172 MW in its generation capacity, including 1,182 MW of renewables. Through its investment plan for 2030, KE aims to introduce more innovations in its distribution segment, such as Advanced Distribution Management System, mobile workforce management, Geographical Information Systems (GIS), and Advance Analytics & Artificial Intelligence that would translate into improved customer experience through faster resolution, fewer interruptions, and enhanced capacity.

Salahuddin Rifai highlighted that technology and digitization ideas have often been wrongly tackled by the power sector. Consequently, all the costs and expenses are borne by consumers, making the affordability goal futile. He stressed a consumer-oriented power sector and optimization of cost. Also, as effective use of resources and ideas requires energy experts’ input, a professional board must be developed to advise the government in planning, he added.

To establish greater power security in Pakistan, there is a need to systematize wholly with an improved approach, said Mazhar Ranjha. Case studies on different aspects, including tariff indexation, investments, planning, digital transformation, etc. must be done to derive workable solutions.

Mirza Hamid said that a major reason for the burden on consumers is because of the obsolete and less efficient power transmission system; therefore, power transmission must be made an investment priority area, along with energy transition and digitization.

In his concluding remarks, Ashfaq Mahmood stressed that power investment, policy planning, and digitization must be oriented towards the transmission, and not generation, to ensure price affordability as well as accessibility to customers. Moreover, a financing plan and investment strategy must be made to overcome the issues.