Fact Check – Power Load shedding in 2018

There is a lot of talk whether the load shedding has ended in 2018. The Government claims that the quantum of load shedding has substantially reduced on a year on year basis and over the last five years period. However, with an objective analysis, it can be ascertained if the quantum of load shedding has declined or not. Since the monthly electricity generation numbers are available on NEPRA’s website – Resources Future has run a quick reality check.

Load shedding status: 2013 – 2016:

The government believes that they have reduced the load shedding since 2013 which was more than 12 hours of load shedding in rural areas and 8 hours in urban areas. However, it is interesting to note the actual surplus/deficit numbers reported by the NEPRA for last five years. The actual reported numbers are as follows:

Surplus/Deficit in Demand and Supply – NTDC system

Source: NEPRA, State of the Industry Report 2016

Going by with above numbers, the total power generation deficit has increased from 4,227 MW to 5,298 MW. This means that the overall quantum of load shedding must have increased from prior years since overall deficit in the system has shown an increasing trend. Going by the above reported statistics, the actual load shedding may not have declined up till 2016.

Load shedding status in 2017

The above numbers till 2016 implies that there must have been little improvement in actual load shedding numbers. But what about the last two years –2017 and 2018. The consolidated numbers of actual electricity generation are not available yet from the regulator and other reporting agencies. However, Resources Future has ascertained the actual electricity generation figures for the last two years based on the NEPRA’s monthly fuel price adjustment data. The consolidated 2017 numbers are as follows:

For 2016, NEPRA reported a comparable figure of 100,114 GWh of actual electricity generation. Compared to 2016, the 2017 numbers show a 7% increase in electricity generation – not enough to eliminate load shedding completely. This implies that on year on year basis, after accounting for an increase in peak demand, the actual surplus/deficit must have remained a north of 5,700 MW and above – and almost at the same levels as of 2013 – contradicting the reduced load shedding claims of the Ministry of Energy (Water and Power Division).

Load shedding status in 2018:

To analyze the load shedding claims in 2018, the monthly fuel price adjustment numbers have been consolidated. Till date, from July 2017 to February 2018 generation numbers are tabulated below as compared to monthly numbers from the same period of FY2017.

In absolute terms, there is an increase in electricity generation from 68,621 GWh in FY2017 to 76,378 Gwh in FY2018 – an 11.3% increase. If the same 11.3% increase continues, the country would be able to make 119,167 Gwh at the end of FY2018 – highest in its history. However, does that mean that it will be able to reduce the absolute quantum of load shedding? Again, just as it happened in FY2017, the 11% increase is electricity generation in FY2018 is not large enough to ameliorate the load shedding gap completely – as this still leaves a gap of more than 4,000 MW of average electricity generation to be fulfilled.

Net electricity generation addition:

In a snapshot, the total increases in electricity generation in the last five years has been as follows:

The CAGR increase in generation is 6.05% – not large enough to eliminate the load shedding, assuming the demand also grows by 5-7% per annum.

What may have gone wrong:

All the power sector projects that the government expected will be online before their term has unfortunately not been completed fully. For instance, the much awaited Neelum Jhelum power plan of 969 MW was expected online much before but so far only generates 60 MW. The three RLNG power plants of 3,600 MW are still in the testing phase and has not come online fully. Second, the circular debt has surfaced up again – albeit in a bigger proportion today. The large outstanding circular debt of Rs. 1,000 billion as of April 2018 (including PHPL) has constrained fuel supplies and has impeded continuous electricity generation. Last, the generation addition projects continue to face evacuation issues. While generating electricity has been the focus, the transmission bottlenecks has not allowed the electricity to be evacuated to distribution networks – causing the load shedding to stay as a permanent feature of Pakistan’s power sector.