Role of IPPs in Energy Sector of Pakistan, Comparison with Different Countries and Policies to Ensure Positive Role /

Abstract

Country is facing severe shortfall of electricity since three decades so to minimize this issue private investors were welcomed in power sector back in 1990‟s after the formation of „Power Policy 1994‟. After starting operations of IPPs in 1997, there was a tremendous increase in generation capacity and it was enhanced to 74% just in 5 years. Electricity was totally sold to WAPDA under 25 years PPA (Power Purchase Agreement). Until now there are almost 30 IPPs in operation and contributing nearly 37% in Country‟s electricity generation. Presently all IPPs are thermal and most are consuming RFO (Residual Fuel Oil), few are Diesel based and rest are using Natural Gas. In this research a comparison of Pakistan with three countries India, Taiwan and Indonesia is made and share of IPPs in these countries is investigated. On the basis of this comparison, few policy recommendations are proposed for exclusion of power cut from country. At this time there should be very indulgent policies regarding private investments in Pakistan. Coal fuel must be promoted as bordering countries are consuming around 60% coal fuel in their electricity generation. Similarly, renewables especially Wind Power should be fostered in Electricity Sector. GENCOs (Government owned generation companies) are running at very low efficiencies, there is need for policy revivals for GENCOs to minimize fuel consumption and for better efficiencies.