Govt Hammering Out Long-term Energy Policy To Provide Cheap Electricity To Masses: Energy Minister

Govt hammering out long-term energy policy to provide cheap electricity to masses: Energy Minister

Federal Minister for Energy Omar Ayub Khan on Thursday said the government was hammering out a long-term energy policy to provide cheap electricity to the masses

FAISALABAD, (UrduPoint / Pakistan Point News - 18th Feb, 2021 ) :Federal Minister for Energy Omar Ayub Khan on Thursday said the government was hammering out a long-term energy policy to provide cheap electricity to the masses.

Under this plan for the first time in the history of Pakistan, comprehensive energy needs and its modalities were being determined up to 2040, he added.

He was addressing the business community in Faisalabad Chamber of Commerce & Industry (FCCI).

He said that under the prevailing system government had monopolized the energy sector and it was the only legitimate buyer of energy produced by different sectors. He said the government was contemplating to allow private sector to purchase electricity in bulk up to 18 percent of its total generation. He said that developed countries had spent at least 8 years to introduce this system. "However, we will take only 15-18 months to bring this system into place," he added.

The Minister termed the "energy mix formula" of previous government as a total fraud and said that under this system 70 percent of total resources were spent on import of concerned items. He also criticized the capacity payment formula for the IPPs and said that under it Rs.85 billion was paid in 2013 which had now jumped to Rs.865 billion and would become Rs.1445 billion in 2023.

Omar Ayub Khan said the present government was adopting a transparent and merit basis system to redress the discrepancies in this system. In this connection an agreement had been inked between government and IPPs which would save Rs.800 billion per annum while its total value would cross Rs.4000 billion, he added.

He said that the price of per unit electricity generated through solar was 20-24 rupees during the tenure of previous government. However, now it had nosedived to 6.5 rupees.

He also stressed the need to promote use of unlimited resources of renewable energy and said the government had received 15 bids for the exploration of new gas reserves. He said that the success percentage of drilling in Pakistan was 33 percent and working on these projects would also attract a sizable foreign direct investment in addition to enhancing domestic energy resources. He said, "Work on offshore drilling is also under consideration which would also enhance our domestic production of oil and gas." The Federal Minister said that two LNG terminals were being developed in private sector while the government planned to meet 80 percent of electricity needs through indigenous resources. He said that solar energy would generate 2000 megawatt while it would jump to 8000 megawatt in 2025 and 18000 to 20,000 megawatt in 2030.

"It will create a new market of Rs.20 billion which will have a trickledown effect on our economy," he added.

He said that many European countries were interested in manufacturing wind turbine or their assembly plants in Pakistan which could also be exported to central Asian states and Africa. He said, "The size of this market was under assessed while its size is much higher than our expectations." The Federal Minister said the government was introducing net metering system to pave way for the generation of solar, wind and other renewable energy resources. Under this system the power producers would have no need to get NOC from the NEPRA, he added.

About textile sector, he opined that it could double its production by saving 1.5 to 2 percent electricity. He also assured to resolve the issue of inducting FCCI President in FESCO board of Management and writing off of markup of sick units on their electricity bills.

He said the government had so far invested Rs.47 billion on the up-gradation of distribution and transmission lines of electricity. He also assured that duration of energy policy would be brought in consonance with the duration of textile policy.

He termed SME sector as backbone of national economy and said that he was fully aware of liquidity problems confronted by small units. He said that banks generally demanded collateral to lend loan to these units which was a major problem for them. He said that a proposal was under consideration to link loaning with cash based lending instead of collateral.

Faizullah Kamoka, Chairman NA Standing Committee on Finance said that he would request Finance Minister Abdul Hafeez Shaikh to visit Faisalabad and resolve finance related issues immediate after election of the Senate.

Earlier, FCCI President Engineer Hafiz Ehtesham Javed welcomed the federal minister and appreciated positive reforms introduced by the present government. He said the government had provided electricity and gas on regionally competitive rates to textile sector which had yielded positive results in the form of enhanced exports in addition to creating thousands of new jobs for unemployed youth.

Later, FCCI memento was also presented to Federal Minister for Energy Omar Ayub Khan while Federal Parliamentary Secretary for Railways Mian Farrukh Habib, Provincial Ministers Khiyal Kastro and Ajmal Cheema, MNA Asim Nazeer, MPAs Shakeel Shahid and Adil Parvaiz Gujjar were also present on the occasion.