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Power demand drops after industry closure

LAHORE: The countrywide demand for electricity has dropped by about 17 per cent as the industry (more than 1,300 industrial units if the Lahore Chamber of Commerce and Industry is to be believed) has pulled down shutters in Punjab due to gas shortage.

Power demand drops after industry closureOn Monday, the demand dropped to an unusually low figure of 11,031MW from 13,265MW on Thursday, representing a drop of 2,234MW, or 16.84 per cent, within three days.

An official of the Pakistan Electric Power Company (Pepco) said that given the historical trends, the demand should be over 13,000MW during the first half of December.

However, it touched that figure only once in the last fortnight, on Thursday. Before that day, it was hovering around 12,000MW before dropping to 11,000MW on Monday, he said.

Another official said: “Pepco does not know how to react to the situation; as a utility, perennially short of electricity, it can only be happy, but a mass closure of industry would hurt everyone in the country.”

“The current wave of industrial closure, triggered by gas shortage, might be responsible for 1,000MW reduction in demand,” said another official.

But he added that there was a general decreasing trend in demand as a host of factors had slowed down economic growth.

General liquidity crunch, which substantially slashed running finance for business, increasing bank interest rate and hike in electricity tariff has affected the industry.

All these factors put together have reduced the size of production and trade and decreased power demand in the country, he said.

The reduction in demand is saving Pepco some money, as it took the hydel component to almost 50 per cent of total generation, correspondingly reducing dependence on expensive thermal generation. But it was also affecting income cycle, which is necessary to stop circular debt from cumulating, he said.

Akbar Shaikh, an industrialist, termed the situation alarming and said: “One normally expects the industry to switch over to electricity in case of gas shortage, but it does not seem to be the case here. It only goes to prove that power rates have gone beyond the business reach of the industrialist.

“That is precisely why the industrialists are closing their operation in the absence of gas rather than shifting to electricity.”

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