Pakistan Institute of Development Economics



Private Power Generation—Opportunities and Challenges

Author: N. A. Zuberi

POWER INDUSTRY DYNAMICS The concept of modern world is imperfect without electricity. The development of modern gadgets in past two decades has made human living as reflection of a science fiction movie. The fiction like living’s axis in fact is electricity and without electricity every thing comes to a grinding halt. Though this picture is portrait of the developed world, yet everyone would agree that wherever electricity has reached, it has transformed everything into power reliant. Whether it is Pakistan or any third world country, the industry; the commerce; the banking system; the methods of teaching in educational institutions; hospitals; control systems of civil aviation and civic traffic systems; and the domestic living, everything revolves around electricity. Whenever there is any break in electricity supply, output of every segment of society drops down to its lowest ebb. Many segments such as process industry and hospitals require highly reliable power supply systems. Truly, electricity is no more a luxury available to rich only; it has now become a basic need. However, scientists have not yet fully succeed in overcoming the challenges posed by the dynamics of electricity. First of all their failure to store electricity on commercial scale has made it necessary to keep generating electricity all the time. However, managing the generation quantum to meet the varying intra-day and inter-day power demand at places which are hundreds of miles apart require dedicated and sophisticated transmission and distribution infrastructure. The problem accentuated in countries like Pakistan where the generation capacity reduces in winter due to lower availability of its hydro power plants and lower availability of gas for thermal generation plants. The transmission cum distribution infrastructure as well as installation cum operations of power generating plants is very capital intensive. Hence it is very difficult for the governments and / or power utilities to develop the generation capacity and the transmission cum distribution network all by itself.

N. A. Zuberi