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The solution to power woes

Pakistan’s current energy crisis remains one of the country’s most pressing – and immediate concerns. Citizens suffer from continuous power cuts and inflated electricity bills – and there is little hope that the government’s futile efforts in this regard will bear any concrete fruit. Power theft, unpaid and for underpaid bills continue to contribute to the energy crises, along with more macro factors such as underproduction. In fact, most energy sector experts agree, there are many contributing factors to Pakistan’s power woes, ranging from poor capacity and demand assessment to imperfect development planning, inconsistent policies and a tendency to favour short term fixes for political expediency.

According to statistics from the Pakistan Electric Power Company (PEPCO), 15 percent of electricity produced is lost due to power theft. The methods for indulging in power theft are many: for instance, tampering with electricity meters has become a common domestic method to avoid payment of correctly-assessed bills. Often, lower level electrical company staff – such as collection agents or meter reading officers – is bribed to adjust the reading in the consumer’s favour. In addition to adding to the existing issues, these commonly used scams shift the monetary load to either bill-paying customers or the public exchequer. Another major issue faced by more honest citizens – those who pay their bills in full – is the problem of inflated electricity bill. Various media outlets have reported public protests against alleged inaccuracies in meter readings that result in high electricity bills.

However, despite much public outcry, there appears to have been little concrete progress made by the government in resolving the many issues faced by the power sector. One possible reason may be the fact that these scams are done manually; as such, one way to resolve many of the challenges faced by the power sector and utility companies is to minimise human intervention. One internationally-acclaimed solution has been the implementation of Smart Grid systems, whereby the whole process – from end to end – is automated.

Allow me to elaborate. There are three major segments in the electricity supply system: Generation, Transmission, and Distribution. And while all three have been severely affected over the past three decades, the distribution systems run by the distribution companies (Discos) appear to be the root cause, with over 30 percent losses amounting to over Rs 500 billion annually. Admittedly, there is a dire need for substantial investment in power generation transmission, and distribution. However, there is simultaneously an urgent need to induct technology into the power management infrastructure, as well as the financial and operational aspects of the entire sector. Considering the government is unable to allocate appropriate funds on any such initiative, Smart Grid is an affordable and appropriate solution. We at Info Tech recently undertook some independent market research which revealed that an investment of less than Rs 20 billion per annum on Smart Grid technology initiatives could substantially reduce power and theft, say, from Rs 500 billion to less than Rs 150 billion a year.

Smart grids are a global initiative being adopted various power utilities across the world, including some of the very advanced economies as well as by developing economies. Korea has been a leader in Smart Grid adoption, and Japan is one country which took the lead following the 2011 Tsunami. Smart Grids are a technology framework applied across all streams of the power industry, starting from Sales, Distribution, Automated Metering, Revenue Assurance, Network Fault Management & Isolation, Smart Transmission Routing, Capacity Planning & Management, all the way up to Generation Planning. Similar technology framework applies on gas and water utilities network, in order to reduce losses and to bring operational and fiscal efficiency.

Pakistan’s power sector landscape, with extraordinary theft and technical losses, has an urgent need for implementing Smart Grids. The entire process of implementing a Smart Grid system would take multiple phases. The first phase would include AMI, (Automated Metering Infrastructure), integrated with Billing and Revenue Systems through MDM (Meter Data Management), whereas NMS (Network Management Systems) Analytics, Fault Detection and Isolation Management Systems could also be implemented in parallel to improve efficiency and reduce outages.

Another major challenge is that the Discos lack basic operational capacity to adopt and run Smart Grids. However, these challenges can be addressed through an “Outsourced” model whereby Smart Grid technology partners can bring investment, as well as operational capacity to ensure a smooth and uninterrupted implementation of the programme.

The Pakistani power crisis is perhaps the most crucial and damaging concern the country currently faces. The impact of power shortages is felt not only by citizens everyday but there is a real, economic loss incurred; not only due to inefficiencies in the system, but also the shutdowns of businesses and factories unable to produce their own power. As such, it is essential to the country’s economic survival that we devise proper, long-term and sustainable strategies to resolve the crises. Implementing Smart Grid systems would be a permanent solution, if done correctly. There are already several companies in Pakistan which have taken productive steps in this regard. The government must formulate policies to empower these companies to implement smart technologies on an urgent basis in order to overcome the pressing issue of power outages and help bring the country back onto the prosperity track.

(The writer is the President and CEO of Info Tech Group, he was also until recently the Chairman of P@SHA (Pakistan Software Houses Association)

Naseer A Akhtar, "The solution to power woes," Business recorder. 2014-02-10.
Keywords: Social sciences , Social issues , Social needs , Energy crisis , Power crisis , Economic issues , Social development , Electricity bills , PEPCO , Pakistan