Efforts to lower electricity prices are being vigorously pursued by the government. In recent statements, Federal Minister for Energy Awais Leghari outlined the various steps being taken to address the situation.
The focus of the government’s strategy includes tackling issues related to Independent Power Producers (IPPs) and the theft of electricity by Distribution Companies (DISCOs). Discussions have also been initiated with Chinese companies to explore potential solutions. “Our goal is to reduce power tariffs while considering all relevant factors,” Leghari commented.
Additionally, reform plans and an energy vision have been presented to the National Energy Administration of China. A crucial part of these negotiations is the re-profiling of a significant debt amounting to $8.5 to $9 billion. This adjustment is anticipated to lower electricity prices and boost demand.
Furthermore, the finance minister, along with other officials, is actively engaging with Chinese bankers to attract investments into Pakistan’s power sector. One of the key components of the proposed reforms involves transitioning from imported coal to local coal for electricity generation. This shift is expected to considerably decrease the cost per unit of electricity.
The government is evaluating the conversion of four coal plants, including the Jamshoro plant, to use local coal. This move aims to bring down electricity costs from approximately 24 rupees per unit to around 8 rupees per unit.
Efforts are also underway to phase out outdated furnace oil plants, which were established under policies from 1994 and 2002. This initiative could potentially lead to an annual financial benefit of approximately 80 billion rupees.
Despite these efforts, challenges such as the devaluation of the rupee and high-interest rates continue to affect the power sector, particularly with regard to capacity charges.
