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Reducing T&D losses should be highest priority

The new government should plug the power sector’s “leaky bucket” by reducing transmission and distribution (T&D) losses, which account for 3,750MW of electricity at peak load, Pakistan Engineers Energy Forum (PEEF) Chairman Mohsin Syed told The News here on Tuesday.

The PEEF chairman said additional sources of power generation or the rehabilitation of already installed plants will not provide tangible results unless loopholes in the power sector are plugged. “The ever-increasing cost of transmission and distribution losses is being recovered from customers or being added to the circular debt,” he said.

He requested the new government to set up a taskforce solely to manage efficiency in the power sector, while emphasising how the T&D losses were the root cause of the energy crisis. He said the taskforce should identify the losses at various stages, recommend alternatives and make improvements in the T&D system to ensure visible and permanent changes in the power sector.

Mohsin Syed said these losses account for around 25 per cent of the energy generated by state-owned power distribution companies (Discos). “If we manage to eliminate T&D losses significantly, we can save about 2000MW of 3750MW of such power,” Syed said, adding that the saved electricity could be diverted to efficient feeders to reward those who regularly pay their bills.

Approximately 50 percent of the aggregate distribution losses of Discos are non-technical, with underlying reasons such as administrative problems, billing, theft, and pilferage of energy, said Syed, referring to a study conducted by USAID on Pakistan’s power sector. “All these problems are associated with management,” he said, adding that efficient and prudent managerial steps could significantly curtail such menaces.

Furthermore, when it came to the technical losses incurred by Discos, which ranged 8 percent to 15 percent, Syed suggested improvements in T&D technology such as investments in network upgrades, installation of smart grid through automation, low-tension capacitors and laying underground distribution lines.

Reducing the average T&D losses for all Discos by only 1% in FY11would have resulted in savings of over Rs7 billion alone in power purchase costs, provided enough power to serve an additional 2.6 million residential consumers and reduced power outages by 110MW, said Syed while citing the USAID study.

He went on to add that, according to the USAID study, if relatively efficient Discos including Lahore Electric Supply Company (LESCO), Gujranwala Electric Power Company (GEPCO), Faisalabad Electric Supply Company (FESCO), and Islamabad Electric Supply Company (IESCO) keep their losses below 10 percent while Multan Electric Power Company (MEPCO), PESCO, HESCO (including SEPCO), and QESCO bring down their T&D losses to 15 percent, the revenue of all Discos would increase by approximately Rs50 billion in a year.

In the long-term, Syed said, the T&D losses need to be brought into alignment with international standards of about 7 percent of total generation. “At 7 percent, system losses would be reduced by about 10.3 billion kilowatt-hours (kWh) and save about Rs75.3 billion annually.”

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