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Category: electricity


National Electricity Plan – A critical view of development phase

Pakistan’s power sector has long been the central concern for the governments as they come and go, creating issues from load shedding to mass burden on the country’s circular debt in the form of capacity payments. However, for past 30 years numerous efforts have been made to essentially resolve the problems in this sector and today we stand at the midst of ballooning capacity payments, historic increment in unit cost of electricity, continuous high loss in DISCO with poor performance and loadshedding – that still exist even when peak demand is almost 10000 MW less than the total generation capacity. The abysmal picture makes one think about the effectivity of the strategy of those efforts and several questions pop up in our mind regarding the success of those efforts. For a starter, there is an astonishing similarity in all these efforts – They were all plans/decisions that were never fully or efficiently implemented. For instance, the unbundling of WAPDA in 1992 still hasn’t been realized almost 30 years later with DISCOs still performing the distribution and sale business together. Similarly, the unbundling of gas utilities (SNGPL and SSGC) is still being resisted by the government. More recently, few initiatives including IGCEP, ARE Policy, CTBCM, and National Electricity Policy are among the policies and plans to restart the efforts against resolving power sector issues. The National Electricity Plan (NEP) is now being developed to achieve the objectives of National Electricity Policy, for which public and private sector stakeholder consultations were held last month. Based on earlier experience and observations, such plans need to be analyzed critically, to evolve a plan that is not only good, but also an executable one.

National Electricity Policy and Plan is being developed under the direction of Section 14A of NEPRA Act which stated the “Federal Government shall, from time to time, with the approval of the Council of Common Interests (CCI), prepare and prescribe a national electricity policy for development of the power market”. The consultative session of the plan focused on key areas for the development of the NE plan which are discussed in detailed below:

Objective Identification:

The objectives of the NE plan are bifurcated into two broad categories; i) Physical domain of electricity value chain that potentially include Sustainability, Energy Equity, and Energy Security, ii) Structural and Institutional domain focused on developing an enabling environment for physical domain interventions. These include Governance & Stakeholder interaction, Market Environment, and Research Development & Indigenization. The complete list of potential objectives have also been mapped out as shown.

Although, the list of objectives is very comprehensive, a more closer and critical look on the potential objectives shows room for better classification and priority listing of these objectives. Some of the issues in regard to current list of objectives include:

  1. Transmission losses are one of the major pain point of our power system incurring huge losses to national exchequer. This calls for a separate objective for increasing Grid efficiency, as oppose to clubbing it with Accelerated Energy Efficiency and Conservation, which is more focused on user-end energy efficiency practices – everything in ambit of NEECA.
  2. Resilience which is an objective mentioned in Security of Supply should bifurcated and broken down into sub-objectives: i) Climate Change Resilience ii) Resilience from Cyber and Terrorist Attacks. The action items for both objectives would be very different.
  3. An objective mentioned in Governance & Stakeholder Interaction is Digitization which does not perfectly fit here. Digitization is rather an outcome of the objectives which should be included in the action plan as it is way through which efficiency can be achieved.
  4. One of the most significant revision needed in these objectives is the clarification of efficient market structure. What do we mean by efficient market structure since most of the experts believe it to be a complete open market and deregulation? Federal Gov have different view on that. Objectives should be very clear in terms of what is expected, while efficient market is a subjective term. It should be set as centralization/decentralization, or privatization/not etc.
  5. Although, certain objections were raised in consultative session regarding incorporation of decarbonization in NEP objectives, it still needs to be at least among medium priority areas because: i) It would definitely drive a lot of decision making in longer terms (15 years) , so should be incorporated in NEP as well, ii) With renewables going cheaper with trend, the economical barrier for renewables being cheaper than thermal power production is expected to be broken in upcoming years.
  6. Even though the objectives of NEP are weighted in next steps, in terms of presenting these objectives, the priority objectives must be highlighted like Universal Access, Affordable Supply, Efficient Market Structure, Energy efficiency and Conservation.

Weighing and Scoring:

Once the objectives are set, the NE Plan is set to weigh and score each of the objective in order to attain fundamental balance in attainment of policy goals. Three methods of scoring proposed for the plan include Equal weights, Participatory, and use of statistical models. Out of three methods, equal weights is least recommended as there are few objectives that are much more important than others and deserve more resources committed towards it. Statistical analysis could be used but it requires heavy research to find out which model would be perfect to represent the weightage that each objective should have. Using solely a participatory model would be inefficient as it would include decisions that are biased. As suggested by some of the stakeholders in consultative session, using a hybrid model of statistical and participatory analysis could be beneficial. However, it will pose a difficulty as the decision makers would not have enough knowledge to interpret the data and provide an insightful view regarding the weightage of the plan’s objectives and actions. Ideally, a more comprehensive exercise should be done to develop statistical model in close coordination with all stakeholders. Such a model should be sensitive to the needs of the provinces, in addition to special adjustments that should be made accordingly which are acceptable to all stakeholders. Summing up, the base of the approach should be a statistical model, and then further modifications should be added that are sensitive to regional issues.

Monitoring, Reporting and Accountability:

Once the objectives are weighted, the plan will focus on development of proper monitoring and accountability framework to ensure the compliance of decisions with plan while also evaluating the success of plan towards overall objectives of NEP. The plan sets out the framework for Accountability, Monitoring and Reporting while keeping in view the local cultural context and best practices. However, there are key issues in executing a robust framework for this plan due which mainly arise due to market structure of our power sector. For instance, Performance measurement of individual compliance of electricity supply side entities or DISCOs cannot be done unless those organizations are completely autonomous in their decision-making processes. These entities are so heavily regulated that they cannot be held liable for any risk and potential constraints that are caused, as they themselves do not operate by with independence. However, resolving this issue is not simple either in a country where it takes more than 10 years to simply create the boards of DISCOs followed by corporatization. So, keeping in view the legal, social and cultural hinderances towards making DISCOs anonymous and realizing the extensive time that could be taken in streamlining their businesses, there should be assumptions with key action item of relevant entity and organization that shall jot down the external environment that needs to exist in order for the entity to complete the objective. For instance, if adoption of digital ERP system is one of the action items for DISCOs (like TESCO) for bringing efficiency, then it should be bound by assumptions that all federal government payable/receivables are settled. Otherwise, it may hinder the capacity of the organizations to uptake interventions for completing the action item.


Khyber Pakhtunkhwa Energy Sector – A Primer

The energy sector of Khyber Pakhtunkhwa is centered around the development and operations of Hydro Power projects. With most IPPs in Pakistan located in Punjab and Sindh due to port and logistic access, KP has an abundance of hydel resources with an aggregated capacity of 30,000 MW. To facilitate public and private sector investment in the sector, the Sarhad Hydel Development Organization was inaugurated by the government, which was later renamed as the Provincial Electricity Development Organization (PEDO) in 2014 to act as an investment arm for power development projects. KP has also shown the most promise on the upstream exploration. Post-18th amendment, GoKP established Khyber Pakhtunkhwa Oil & Gas Company Limited (KPOGCL) with the mandate of commissioning oil and gas upstream activities and ensuring private sector participation and investment in the E&P industry. The energy sector in the KP is fourth in contribution to KP’s economy after services, agriculture, and industry sector and contributes roughly 7-8% of provincial GDP. It also retains the potential to be a provider of future FDI in the province and employment opportunities to vastly remote rural areas of the region. Overall, the energy sector in the KP contributes to 11 percent in the employment rate of the province. Renewable energy has become an emerging sector with most of the employment taking place in trades related to micro hydel energy trades in Swat and Chitral, which have high potential for the production of cheap electricity through micro hydel power plants. In terms of RE, solar holds the second most potential besides hydel. The prolonged and unresolved power shortage in the country, particularly in the rural area of KP and FATA, has given a surge to solar energy deployment and has the potential to ramp up off-take.

Besides community hydel projects, the GoKP has shown interest in the mobilization of large and medium-sized hydel projects. It has adopted the federal Alternative and Renewable Energy Policy 2006 for all renewable energy projects except hydropower. For hydropower potential, the PEDO has issued the Khyber Pakhtunkhwa Hydropower Policy 2016. The provincial government has developed a ten-year action plan to develop hydropower projects in the province through public funds and private-sector investments. There are differences between the rural policy and the federal policy of 2006. The latter assigns grid interconnection responsibility to NTDC while the provincial rural requires the project developer to construct the transmission line and embed the tariff’s cost. The strategy envisaged a mix of public spending, corporate funding, and public-private partnership to mobilize investments.

Additionally, the large projects, such as SK Hydro, Azad Pattan, and Chakothi Hattian have seen private sector engagement with installed capacities of 870 MW, 640 MW, and 500 MW respectively, primarily with the aid of Chinese investments. Nonetheless, issues persist that hinder the growth and investments in the energy sector. High transmission and distribution losses in PESCO / TESCO circles and weak operational structures have spiralled the power sector under high technical and commercial losses. Additionally, the monopolistic structure of the electricity market alongside high inefficiencies means that there is little incentive for the private sector to mobilize investments on its own. Also, sub-standard customer service, along with red tape, make it a challenging industry to attract private investments.

Some issues persist in renewable energy and oil and gas sectors also. For large and medium hydel, PEDO has demonstrated little capacity to initiate, design, and close projects. Overall, technical capabilities remain weak and require strengthening. Other challenges also abound. For instance, to reach full capacity, PEDO needs to initiate detailed designs and feasibilities on the Chitral river. Further, extensive delays have been observed in project management such as the due implementation of hydro projects which leads to increased costs on both financial and economic fronts, a case in point is that in PEDOs 40 years history, it has only been able to install 120 MW of public sector projects). On the hydrocarbons front, the GoKP needs to liaise with federal agencies to improve the regulatory framework to incentivize exploration. If streamlined, such processes can greatly simplify due diligence and compliance procedures and facilitate investment opportunities by local and international E&P firms. A technology-driven approach also needs to be part of the new hydrocarbon strategy, such as availability of hydrocarbons prospects and seismic data to investors who can access data through secure online platforms. Additionally, seismic studies need to be carried out for unexplored areas to improve upon hydrocarbon prospectivity data. On energy efficiency, there appears to be a lack of a coherent strategy to foster energy efficiency and conservation efforts. There is a need to improve upon a transaction off-take model that can facilitate energy efficiency investments, such as a guarantee fund through first loss guarantees in coordination with IFIs, Pakistan Credit Guarantee Company, lenders etc. Moreover, capacity building through education and training remains a major bottleneck along with compliance, following the enactment of national EEC laws.

To counter the issues, present and further enrich the business environment in the KP province, GOVERNMENT has been presented with specific entry points for their intervention that can streamline the process. This process then, in turn, could speed up the projects that are in the pipeline in different energy streams and ultimately bring in more projects that could catalyse the economic development in the province. For instance, there exists an opportunity in the ARE policy 2020 to auction new RE projects on a competitive bidding process. This would require capacity building at PEDO to incorporate changes that would be introduced in the ARE policy 2020. PEDO would also need to deepen its’ understanding of the transaction design and implementation process, including project management, evaluation of technical and financial feasibilities and risk-return parameters. GOVERNMENT could also help in providing transaction support in preparing and evaluating concessions under the tripartite agreement, which can be done by deploying specific consultants specialized in the domain. Support around specific transactions could assist PEDO in procuring the right concessionaires for new hydel projects and build capacities for future purchases. In turn, this will improve GoKP’s ability to invite financially and technically sound concessionaires to ensure projects continuity over its’ proposed life, hence realizing Value for Money (VFM) for the government. It is suggested that GOVERNMENT deploys specislized transaction consultants to assist PEDO and help them in designing the optimal framework.

One of the most significant ways that Government can help GoKP is to build upon the wheeling regulations and coordinate a market between generators (publicly owned, such as PEDO) and Bulk Power Consumers (BPC) for industrial off-take of power. Some projects can be facilitated for wheeling such as Malakand HPP (81MW) that can be offered to industries through strike price (which would still be substantially lower than what they are paying to CPPA(G)). If these projects are successfully executed, they can pave the potential for a homegrown, competitive power model for GoKP, realizing efficiencies for the entire province. Government can facilitate such transactions under wheeling arrangements. It can build upon projects for a competitive market off-take that would consequently reduce their reliance on federal institutions while augmenting revenues for the province through indigenous hydel development offerings. Also, GoKP can coordinate for the establishment of a new transmission company. Under the NEPRA Act amendment, provincial governments can now set up their own provincial transmission companies, such as the one established in Sindh called the Sindh Transmission and Dispatch Company (STDC). With the setting up of this company, GoKP can evacuate power by relying on its agency (instead of NTDC) while promoting projects under both public and private sector. At the same time, maintaining a viable transaction structure and bid security package would allow investors to utilize the opportunity (most likely under a tripartite arrangement).

Another entry point suggested in this report is around waste to energy. There is a strong political will to execute waste to energy projects, and they have the potential to bring about a socio-economic revolution in KP. Further, such projects have a strong link with climate change, are capable of generating employment opportunities, and can directly impact health improvement indicators and sub-surface water. With rapid urbanization in Peshawar and Mardan, one of the most daunting issues is the mounting waste problem that affects public health, pollutes the environment, and threatens to drown some poverty-stricken areas in toxicity. It is estimated that solid waste is growing in Peshawar and the adjacent regions at an annual rate of 2.4%. GoKP can carry out specific pre-feasibility studies, identifying densely polluted areas in major cities and targeting an optimal point that would be suitable to place a waste to energy plant that could benefit the population. Additionally, a Model Concession Agreement (MCA) and a bid security package for a transaction that could be implemented in the Public-Private Partnership (PPP) domain could start from a pilot transaction and if successful, can be replicated throughout with more substantial stimulus. This exercise could involve several stakeholders such as the Ministry of Climate Change, Global Environment Facility (GEF) for assistance on financial and technical fronts.

Another area that GoKP can target is the completion of feasibility analysis of the Chitral River that is a conglomeration of around 36 tributaries originating from the same number of separated valleys in the district. It is the largest river in KP, but the capacity for hydraulic power generation remains severely limited. To be fully implemented, site and feasibility assessments of projects need to be undertaken. GoKP can help prepare transaction opportunities and a transaction structure for possible locations in the Chitral River. The transaction opportunities include developing a well-defined pre-feasibility study in the area and identifying key factors that could help in harnessing energy. Adding on to the site surveys, GoKP can help the government formulate models and analysis on the Chitral River and the surrounding area through preliminary designs in the first stage, leading to detailed plans. Consequently, legal and financial feasibilities could be firmed up in case investors are interested in specific sites and locations.

For KP’s energy growth, there is a clear need for a well-coordinated demand-side management strategy that can help take prudent supply-side decisions and related infrastructure. With the demand for intersectional developments, such as transmission and grid investment, the need for a cohesive strategy becomes much more significant. To KP, this exercise will mean better preparation, evident not only at the provincial level but also with the federation for a successful evacuation, tariff, and regulatory regime. GoKP can conduct a comprehensive, long-term (10-year) energy demand-side assessment of KP, identifying which sectors are expected to consume energy (such as tourism, hospitality, marble, SEZs, transport).  Furthermore, a calculation of how much could be saved from energy efficiency and conservation, and how much new generation stimulus would be needed. A holistic plan that balances supply-demand scenarios for KP would optimize public sector finances without imposing excessive direct and contingent liabilities. Moreover, capacity building to create awareness regarding the demand side management poses another entry point. Educating the masses about the EEC laws and projects’ adherence to these laws is also required.

As identified, for hydrocarbons off-take, GoKP can be best positioned to organize regulatory dialogues that can best present interests for KP in liaison with the federal agencies. Enhancing the capacity of DGPC / provincial government and making existing regulations more investor-friendly through quick, compliance-based decisions and in line with international standards is a priority. This can be achieved on an on-going basis to ensure that regional priorities are well-matched with federal legislation. There is a need to have a sound regulatory and policy framework to improve the existing investment framework. The policy and organisational context will eventually drive the demand for GoKP to bolster the capacity to address longer-term structural challenges while responding to immediate-term priorities. Also, a sound regulatory structure will provide for more equitable, evidence-informed policymaking, and lead to effective, value-based governance that engages stakeholders in the policymaking process inclusively and openly. Moreover, GOVERNMENT can also facilitate discussions on the unbundling of natural gas, lead discussions forward and devise a framework that can pave the way for operational and institutional efficiencies, which would enable both federal and GoKP to design a new competitive and operationally efficient landscape.

GoKP can also work on fostering energy efficiency transactions, especially in industrial and building sector. There are two impediments generally faced for industrial and building energy efficiency financing; i) high transaction costs and ii) performance risk. GoKP can play an active role in the development of a framework that can overcome both the impediments to catalyze a road to success. For instance, the provincial energy department can attempt a few pilot projects by overcoming the disproportionately high transaction costs that the transactions face. To address this barrier, GoKP can work with financial institutions, such as lenders, IFIs, Pakistan Credit Guarantee Company Limited in making energy improvements easier for KP energy consumers, and to develop low-risk and cost-effective energy efficiency measure packages that can achieve up to 20% energy savings for one specific small industrial unit. The team can choose to focus the pilot project efforts on small commercial office buildings with GOVERNMENT providing transaction support, allowing building owners who meet a specified criterion to obtain funding with minimal paperwork and without lengthy bureaucratic processes.

Lastly, there are positive energy nexuses that can accrue from various interventions that GoKP can capitalize. For instance, one of the fundamental challenges that KP faces is meeting the growing demand for food, water, and energy for a rapidly growing population. First, GoKP can focus on providing 30MW power to the Chashma Right Bank Lift Canal Project, which has been approved by the Executive Committee of the National Economic Council to irrigate approximately 286,140 acres of land in the southern districts of the province. If executed, this can free up space and provide an area for plantation of the crops that could mitigate the provincial government’s burden to import food and declare self-sustenance. This along would be a milestone and can result in significant improvement in food security, climate change mitigation efforts, and employment opportunities to the indigenous population of the province. Second, GoKP can also plan and execute transaction design for a potential HPP near the Tang on the Tochi river, which can boost the energy required for the surrounding areas, i.e., North Waziristan in the north and D.I Khan in the south. If executed, this would catalyse the development pathway in the NMD areas – providing them with cheap and affordable electricity for economic and social upliftment.


RF Insights: Five Key Takeaways of Pakistan’s New Integrated Generation and Capacity Expansion Plan (IGCEP)

The Integrated Generation and Capacity Expansion Plan (IGCEP) 2020-47 is a policy document prepared by the NTDC that lays out how the future generation capacity expansion should take place on the principle of the least cost generation. As per the IGCEP released, a total of 148,074 megawatts of electricity will be added to the national grid by 2047. This would include 45,929MW hydel-based electricity, 32,697 MW local coal-based energy, 27,090 MW based on re-gasified liquefied natural gas, 26,522MW solar, 9,241MW wind, 3,300MW nuclear, 1,620MW based on imported coal, 1,000MW from across the border and 655MW bagasse-based. To synthesize the results, NTDC would first use a load forecast that would be placed under PC 4.2 of Planning Code of the Grid Code. The load forecast would be followed by the generation plan (IGCEP) that would be reviewed and approved by NEPRA and placed under PC 4. This would then be followed by a Transmission Systems Expansion Plan (TSEP) and finally, the transmission investment plan which would fall under PC 4.1 and PC 4.2 respectively.

The report on the IGCEP presents the results of the most recent expansion planning studies conducted by the Load Forecasting and Generation Planning (LF&GP) Power System Planning (PSP), National Transmission and Dispatch Company (NTDC) following the criteria set out in the Grid Code. To do this, NTDC used PLEXOS, a generation planning software, to optimize projects incorporated. The annual updating of the IGCEP is also a regulatory requirement on the part of the NTDC, that consequently needs to be validated by NEPRA. To maintain the higher degree of transparency and to make this report detailed, various aspects have been included by NTDC, such as stakeholders who exchanged input data, the currency of input data for the IGCEP, the software tools used along with their requirements and limitations, generation planning process, etc. Nonetheless, as a first of its exercise, there is more that needs to be done to align IGCEP and embed it as a long-term planning option in Pakistan’s power sector. From the hearing that occurred on 15th July 2020 at NEPRA, Resources Future would like to highlight give key takeaways of what transpired in the hearing and some of the suggested way forward.

IGCEP should practically be decided via market forces

Considering Pakistan’s diverse stakeholders involved through various provinces and conflicting political ideologies, there will always be differences as to which generation options under IGCEP should be adapted at the country level. All over the world, generation expansion planning is a function of market forces with investors taking risks and returns as where they see best to invest. Why this cannot be done in Pakistan? The answer is still a closed sector, guarded by single buyer model that leads to an IGCEP going to be determined by a single entity, NTDC. As it transpired in NEPRA hearing, no one participant agreed on the results and there were conflicting propositions as to the best generation model of deployment. The long-term strategic focus should be to open up the market, reset sector direction and let market decide where and how and under which fuel they want to invest in coming years.

Britain is an excellent example. Since market de-regulation, the cost of energy in the UK has been set by the market. Power Purchase Agreements (PPA) are still in vogue but the purchaser is no longer a Government and could be anyone; a utility, trader or a corporate. However, where the Government decides to give a technology impetus, they do so by announcing a strike price and organizing auctions. For example, the UK Government announced a strike price of £ 180/MWh for geothermal projects, £ 39.65/MWh for offshore wind and £ 92.50/MWh for nuclear Hinkley project. Pakistan’s long-term should be the same – introduce competition, let the market decide where and how best to invest and focus on regulatory framework which enables long-term private investments.

IGCEP should be comprehensively peer-reviewed

One of the key issues pointed out in the hearing was the basis of several assumptions taken by the NTDC to incorporate under PLEXOS (the software planning tool used by the NTDC). This resulted in various outcomes that were not favorable to the provinces, which they consequently objected. For instance, Punjab believed that NTDC did not incorporate enough solar projects, even for projects which have been issued LOIs. KP believed their hydel potential has been missed out. Similarly, Sindh pointed out that out of 78 projects having a capacity of 11,000 MW in their pipeline, only a few were included. And, Balochistan and AJK mentioned that specific LOIs regarding their projects had not been incorporated in the design. NTDC, on the other hand, believed that they strategized projects using different categories, such as if a project is a “classified project”, they would be sent straight to the generation planning tool. Similarly, projects which came under CPEC, or those under construction, or those who have achieved financial close or agreed upon G2G projects have been prioritized. The plants and projects that did not fall under these prescribed categories were not considered by NTDC.

There were differing views on the set of assumptions and the only way to reconcile those differences is to build credibility around the entire planning process and make it transparent and peer reviewed. For most part, IGCEP has a theoretical foundation now, that needs to be validated independently by experts. The empirical revalidation and a comprehensive peer-review would make it a more coherent and strategic initiative, backed by evidence. A credible peer-review identifying and laying out critical assumptions is needed to provide an answer whether recent adoption of strategic planning via IGCEP could significantly improve the performance of the sector? Will IGCEP planning increase the amount of sector effectiveness in terms of choosing better generation options? Would the exercise lead to decreasing costs? These questions can only be answered through empirical assessments, backed by sound data, results widely available to stakeholders and a comprehensive validation through an independent third-party peer-review process.

Take into account negative externalities 

We all know Garett Hardin and the Tragedy of Commons. It’s been repeated under several public hearings that full cost of energy is not often reflected through least cost optimization models. The world understands the negative externalities that accrue due to coal power plants, especially Lignite ones and IGCEP has given it a lot of weight, especially the Thar Coal. We have an example of Germany that transitioned itself out of the lignite and positioned itself to be a world leader in the renewable energy. On the other hand, the IGCEP has planned 32,697 MW Thar coal generation that would compete for the same scarce resources with human population such as the availability of clean water and out flora and fauna. In calculating least cost generation, it would be important to include the cost of negative externalities by drawing upon the tragedy of the common’s principle. Only accounting for least cost generation by considering ‘cost’ while ignoring the price of shared-resource system can deplete and spoil the value of shared resources.

Hydel power needs more attention

IGCEP 2047 has taken hydropower and nuclear working life as 50 years and 70 years, respectively. Working life is a key variable in the economic evaluation of different generating technologies. Hydropower has the longest working life of all generation technologies. Some 80% of hydropower cost is civil works and hydraulic steel structures having a life in excess of 100 years; remaining 20% cost comprises generation plant i.e. turbine/generators. In Pakistan too, the hydel power has shown promise for an extended life. For instance, Mangla HPP which was built with a design life of 100 years in 1960, has been in operation for 55 years. With Mangla raising completed in 2009, it is expected that the 100-year design life will extend further. Further, new strategic hydro power projects (such as Diamer Basha and other large HPPs) will also be needed to replace previous strategic projects for flood control, water storage and cheap power generation. Any IGCEP need to overlook ‘least cost’ only to see far more deep, longer-term strategic interests of the country.

The problem with Pakistan’s IGCEP continues to be inclusion of both the commercial and strategic projects under one plan. As outlined earlier, for any stable direction, the country needs to open up the sector, let investors decide on the commercial and financial viability of projects and pursue them independently under multi-buyer model. Governments can push for selective strategic projects only – as and when they like but not for the entire generation stimulus. 

A longer timeframe muddles the results

The sector has been marred by inefficacies and lack of sustained, coordinated energy planning. Given the background on the sector, it was quite clear that the stakeholders never really believed in a plan that spanned for 27 years – a horizon far too stretched. Stakeholders believed that a tenure of a 27 years extended plan was a risk as there are various economic and political changes at play. Sindh government opined that owing to the tenure of the Federal Government being not more than five years; it would be best if the plan would be kept at 5-10 years’ timeframe to mitigate most of the issues faced and prove to be fruitful for all the stakeholders involved. NTDC, on the other hand, argued that although the complete plan spans to the year 2047, the plan is to be revised yearly to incorporate changes accordingly with the first phase of the plan to be extended to ten years. NTDC believed that the stakeholders’ primary focus on the timeline should be on the first ten years, which could then be stretched later given the circumstances.

We too, believe that there is a distinction to be made between policy and technology and associated time horizons between the both. It often becomes a crisis when longer tenor policy directions often fail to account for future technologies or just simply predict how the future would look like. A single software like PLEXOS cannot predict societal or behavior changes that will occur twenty years down the road. Today, it’s all changing fast; technology is literally creating the world we all live in, and policymakers have not been able to keep up, especially in Pakistan. Getting it wrong, especially for a larger planning tool like IGCEP, can be increasingly dangerous. Surviving the future will depend in bringing technologists and policymakers together, but more importantly leaving the business decisions to the market and not to the government.

Consider what can transpire to our energy future and outcomes basing our assumptions primarily on a software for an end to end country level planning. The software may have the potential to aid human decision-making, eventually replacing notoriously subjective human processes with something fairer, more consistent, faster and more scalable IGCEP of the future. But it also has the potential to entrench bias and codify inequity, and to act in ways that are unexplainable and undesirable, just what the provinces have highlighted. In short, how can we avoid the pitfalls of long-term planning while the horizons of those operating the technology may remain short-term? The answer requires a strong coordination among institutions, iteratively evolving policy tools as per technological advances and opening up the market for risk return led private sector investments.