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Energy policy: role for provinces

THIS is apropos media reports regarding preparation of a new energy policy by the incumbent government. The policy will be finalised after consultation with provincial governments.

Pakistan has been blessed with vast energy resources which have not been properly exploited. It is good that the government is working on preparation of a new energy policy. The job is not easy. The following roadmap is suggested:

Provincial governments have very important role in energy mattes and, therefore, should be associated with the energy policy from the very beginning. The principles, on which the policy would be formulated, should be agreed first. The principles should cover areas such as electricity fuel mix, use of gas for generating electricity, priorities of hydro-power and renewables, affordable tariff of electricity and gas, rationale of national transmission grid, revision in the existing energy policies, accelerating local exploration for gas and oil, import of electricity and gas, financing of energy infrastructure, energy conservation, etc.

These principles should be released to the public for views.

Energy is a vast field. Proper detailed policies are needed for each sub-sector such as power generation, gas and oil exploration, fair tariff determination, exploring reasons for theft of electricity and gas and bringing institutional improvements to discourage such deplorable practices, as passing of more laws will not fully help.

Existing policies on various sub-sectors should be reviewed in the light of agreed principles. Energy measuring and energy trade practices need major scrutiny and overhaul.

Meters are important. The government has to ensure that at every stage meter reading is correct. The end-consumers have to be protected. Proper energy trade is the key to keeping tariffs within affordable limits.

Like other services, energy service has to be introduced by the government. Officials at various levels should be engaged while specialisation in various disciplines be developed professionally. Legal, finance, accounting, administration, etc., are all important.

Lack of international-level expertise in various matters may cost the nation enormously. We should remember that inefficiency, a lapse or an error has an economic cost and is eventually reflected in the rise in consumer tariff.

The following are some specific suggestions:

Power cuts, coupled with shortages of gas and water, cause economic damage and create law and order problems for the provincial governments. Solutions would come more naturally if there is a better understanding of the dynamics of energy and technologies, construction/management of energy projects, appropriate energy policies and engaging large numbers of committed and trained professionals.

In order to own and develop provincial energy resources in accordance with the 18th Amendment, the provincial governments have to embark on capacity building in energy matters/projects on the same lines as is at present existing at the federal level.

The IMF and other international financial institutions would be expecting better performance from the provincial governments. With increased responsibilities the provincial governments are expected to be institutionally as strong as the federal government and various offices operating under the auspices of energy – related ministries.

The provincial governments shall have to revise their earlier position vis – à – vis the federal government in the formulating of energy policies, determination of tariffs, specifying the project priorities, the role of various institutions, including regulators.

The provincial governments already have a sort of institutional setup for dealing with matters pertaining to gas, electricity, canal/river water used for electricity generation etc.

They have been involved in policy formulation at the federal level and in clearing energy projects though they lack the expertise in matters handled entirely at the federal level.

After the 18th Amendment, they now have greater authority over energy matters for which they could have started taking appropriate measures for institutional capacity – building.

Having worked on institutional building in an energy finance department, I feel that measures that could be taken up by provincial governments include taking stock of the existing manpower, data, reports, documents, policies, etc., vis-à-vis the discharge of responsibilities devolved under the 18th Amendment.

These also include establishing core teams, level of existing production, demand – supply gas for electricity and gas tariff structure, etc.

Renewable energy is an area where provincial governments can contribute the most and reduce the sufferings of the people as a result of loadshedding.

Biogas plants, particularly in rural areas, can produce gas for cooking, lighting and fertiliser for crops. The growing of trees, apart from environmental benefits, can provide raw material for biogas plants and power generation plants based on biogas.

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