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Category: Climate Change

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We need a new approach to Karachi’s electricity woes

What happened to Karachi warrants serious reflection. The urban flooding wiping out Karachi’s entire electric power infrastructure should in no way become an acceptable norm. The ensuing power outages have come with heavy economic costs and the entire system collapsing is a stark reminder that Karachi remains susceptible to large scale electric system shocks that needs a new approach and a novel governance model.

Japan provides an excellent example

Japan provides an excellent reminder and a way forward. Back in 2011, the fatal earthquake and tsunami resulted in large-scale blackouts and loss of lives. As per the estimates, the city suffered the loss of 1,100 and nearly 75 percent of the city’s homes were gone. After the tsunami, the Government set up the “National Resilience Program”, which would fund the reconstruction of the cities affected by the disaster and would focus on building back-up capabilities in the event of another natural disaster. The entire focus shifted from large scale monopolistic distribution to small scale distributed generation. Later, Reuters reported that in the city of Higashi Matsushima, a ‘silent’ revolution has happened with more and more municipalities setting up distributed energy systems to reduce reliance on the main grid and securing supplies indigenously during natural disasters.

Karachi’s fragile grid remains vulnerable to wide shocks

In Karachi, K-Electric’s fragile grid is not a new news. But what is now abundantly clear is that the weak grid poses a national security risk that needs a course correction. Evidence show that fragile energy systems are vulnerable to a wide range of shocks – including natural ones that can be responsible for a large number of disruptions. Though limited data availability makes it difficult to quantify the link between power outages and torrential rains in Karachi, K-Electric’s power systems woes are compounded by aging equipment, lack of maintenance, rapid expansion of the city, and insufficient generation that all contribute as factors that reduce the reliability of service in general and increase grid vulnerabilities in particular.

The higher susceptibility means that infrequent events (such as rains) would have large, disruptive impacts. In Karachi, the rains have damaged infrastructure, grid stations and power distribution networks. In the aftermath of a strong shock, now even a mild storm event would significantly increase the incidence of power outage. As Schweikert et al outlined in 2019 that during a natural hazard, three main types of incidents can lead to system breakdowns: transmission and distribution grid failure, generation plant failure, and fuel and maintenance supply chain failures. Unfortunately, KE remains vulnerable to all three.

Also, consider the ripple effect of grid disturbances. Electricity outages can affect supply chains and ports, which in turn can affect fuel supply availability. If the port infrastructure is damaged, plant operations are generally reduced or shut down completely. In Puerto Rico, for instance, following Hurricanes Irma and Maria, port closures resulted in an estimated loss of 1.2 million barrels per day over 11 days that directly affected the major generation stations. The interdependency other way round is also strong. Due to power outages, infrastructures such as ports, pipelines, oil terminals, storage tanks and filling stations can hardly function. A weak infrastructure results in a vicious cycle that is hard to break.

Repercussions of a weak transmission and distribution infrastructure has been catastrophic

In Karachi, T&D failures are responsible for most outages. Transmission is generally more resilient than distribution and can withstand natural disasters. The real problem lies with the distribution sector. Most of the KE’s distribution sector has not been able to cope with torrential heats and rains with outages of 36 hours and longer reported during the last week. Many parts of the city have not been fixed as yet. Restoring electricity has become a bigger problem as different substations have completely submerged in the rain. When substation components are not properly anchored, rains can cause substantial damages. For instance, it is reported that tall components of electrical substations are susceptible to damages with floating water having the potential to damage expensive components and resulting in far-reaching service interruptions.

In Karachi, the cost of economic disruptions has also reached disproportionate levels. Firms and households are forced to spend an additional sum on self-generation electricity to cope with outages, often backing up between UPS and diesel generators. For households, the impact of power outages can result in additional sums spent on cooling and heating (which in turn may have health implications if fuels are below electricity standards). Outages also affect economic activities and income, children’s educational outcomes, social and leisure activities, and regular household tasks, such as cooking and cleaning. It is time to rethink service delivery and take bold steps.

To aid service delivery, think of ending the distribution monopoly

It is time to rethink KE’s distribution monopoly. The world has moved away from monopolies to competitive markets and in the process, has improved service delivery manifolds. The historical Public Utilities Regulatory Policies Act (PURPA) of 1978 in the United States has already provided a guiding path. Before PURPA, energy companies were classified as natural monopolies, and for this reason, were established as vertically integrated. Utilities became protected as monopolies because it was thought that a single company could produce power more efficiently and economically as one company than as several. But PURPA changed all that by adding a series of provisions that enabled non-utility operators to participate and break previous monopoly function. The results have been staggering. The average cost of power has come down, service delivery has improved, and market forces have led to competition, enabling innovation and modernization.

What is now clear is that Karachi’s weak grid managed in a monopolistic fashion is beyond unsustainable and is in need of a similar like overhaul as PURPA. The reasons are straightforward. Natural monopolies should only exist when cheaper alternatives can’t be provided by multiple, competing firm. In Karachi’s case, this is not the case. The behemoth natural monopoly has not been agile enough to prevent losses or augur confidence in its services, showing recurrently that it can no longer bear the burden of a sprawling city. If consumer delivery is any important, the answer should now lie in multiple utilities coordinating for their respective territories, managing small systems, preparing and mitigating threats in advance and leaving the room for innovation to improve utility sales and returns.

The lack of competition in electricity distribution business has proved the death knell of reforms. Unlike in Pakistan’s telecommunication sector where consumers have the choice to choose between multiple service providers, where all compete for the same market share, the power consumers, especially households and commercial consumers of Karachi, have been left to the mercy of a single distributor who secures all the rights. The monopoly of the power distributor then implies that it has no incentive to ensure quality power to consumers or improve efficiency let alone charge market competitive tariffs. NEPRA which is to decide upon tariff generally has little choice but to often allow monopoly distribution companies a pass-through tariff in the absence of any clear, competitive benchmark emerging from market forces.

What is also clear that it is not legally difficult to restructure this model. The power sector has been on this transition before when it witnessed cheaper and smaller electric generating technologies and competition from independent power producers (IPPs) to erode the utility natural monopoly in generation. In much the same way, continued capabilities emerging from technological advances in distributed resources and smaller utilities can create widespread competitive alternatives to monopolistic electric utility service. If and when that happens, the distribution natural monopoly should fade, as a simple matter of economics. This does not mean the distribution system or the grid itself will disappear or that it will no longer provide for critical value to consumers. But new regulatory paradigms and business models should emerge to ensure and enhance the benefits the grid can continue to deliver. And that will only benefit the consumers of Karachi.

The Drivers of Climate Change in Pakistan

Drivers of climate change in Pakistan

There is a consensus in Pakistan on the need to act on climate diplomacy. But the search continues as how to best tackle the issue of climate change and play it as an effective tool to make the right pitch for increased climate change adaption and mitigation funding opportunities. There is an urgent need for everyone to understand that climate change threatens us all and the 2005 earthquake and floods in 2010 and 2011 gave a stark reminder that the only solution to building a climate resilient environment is through a more proactive engagement with all stakeholders. While the multi-lateral institutions such as the Asian Development Bank and the World Bank continue to play their part, it is important that the most important stakeholder – the Government of Pakistan should take charge and lead the efforts – along with other potential partners such as NGOs, private sector, aid workers, diplomats, municipal authorities, and military.

Government – Capacity building

In a fragile country like Pakistan, there are multiple risks emanating from climate change. For instance, the complete governance breakdown – which happened last in the situation of floods and earthquake is a case in point. For multiple regions, the first responders were the local NGOs and the military institutions instead of the civil disaster risk management institutions. The Government needs to play its part by not just creating a state-owned enterprise (SOE) on disaster risk management but by disseminating the understanding of the impact of climate change in everyday life. In today’s times, when partisan politics often takes the center stage, it remains a challenge for any government to build a meaningful dialogue on the need to prepare a comprehensive national climate change narrative. Only by presenting climate-sensitive solutions, the overall degree of instability can be ameliorated, and associated risks can be better managed.

The second step is to translate that narrative in legislative actions and policies. The Government of Pakistan has already taken some important steps in that direction – particularly setting up of the Ministry of Climate Change, formulation of Climate Change Policy and an implementation framework through an Act. However, more needs to be done now. Specially, a more proactive approach is necessary which will ensure sectoral policy making, particularly climate considerations being adapted in core areas of energy, water policy, disaster risk management and agriculture.

As a last step, the Government needs to lead climate agenda into actionable opportunities which will have people see with their own eyes the potential impact of environmental regeneration. The Government can launch a series of pilot projects to show people that rivers, forests, and grazing lands could all be revived – building the faith needed to achieve engagement for a lasting impact. In this regard, the billion tree tsunami at KPK government stands out – as it shadows the Provincial Government’s commitment not only to make policies but to bring environment on the forefront of the national dialogue.

Private Sector – Bring that data!

The private sector can play a huge role – especially with the emerging technologies that are on the offing. Big data is one such technology that can be used to measure, disseminate and then take actionable steps to make sense of climate change and tools to counter environmentally-destructive practices. With increasingly fast processing capacities, we can get big data to talk to each other and provide us with a bigger picture – deciphering just how changes to the natural environment can impact communities, regions, and nations. Once we know the data, we can connect the evidence and policy between defense, diplomatic and development communities and ensure targeted interventions are undertaken to optimize community benefits.

Globally, such transition has already started to occur. For instance, Resource Watch is bringing together over 300 quality data sets – around 50 of which are being updated in near real-time – and in partnership with NASA, Google, the UN, and the World Bank, among others. The platform will be going to map how biophysical change such as climate change, soil degradation, and water scarcity can impact the socioeconomics such as food security and health along with the ways in which it can exacerbate political marginalization, exclusion, and regional migration. Government and corporates can play their part in funding and channelizing such initiatives and private sector can build upon environmental data sets to benefit the wider national environmental practices.

Multilateral partners

Multilateral partners such as the Asian Development Bank, the World Bank and the UNDP continue to support the Government in different developmental interventions. However, the most important thing that can be done for climate diplomacy is to ensure a good knowledge-base for actors to draw on. The research and insight are important and in order to do this, adequate resources need to be provided to properly map the risks that climate change poses and ensure that the findings of those researches reach those in a position to use the information. Once a threat is hypothesized, one can create a response. From the response, one can develop an action plan. This can then be directed at the Ministry of Energy and Ministry of Climate Change on what they each have to do, individually and collectively – forming a mechanism for cooperation.

Military as agent of change

Last, the Pakistani military has always been on the front line of the disaster management and they can play a crucial important role as first responders to environmental disasters in Pakistan, managing large relief and rehabilitation efforts. Training the military on environmental management and in recognizing early warning signs can further improve their ability to react and pre-empt disasters and ensure that disaster risk management practices are optimized to benefit the people who need them the most.