Energy Crisis & High Prices in Pakistan I IPPs, Capacity Payments & Overbilling
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- Опубліковано 7 вер 2024
- In Pakistan, the energy sector’s vitality is essential to the nation’s economic pulse, yet it is ensnared in a web of governance and sustainability issues and inefficiencies.
The full servicing of our obligations to IPPs looks increasingly unlikely. The issues include currency mismatch (earnings of IPPs denominated in dollars while revenues of the system are in rupees), negotiated rates on generous terms (e.g. committed returns of 15% in dollar terms and income tax exemptions for the entire period of the contract), and sovereign guarantees covering even market risk. The so-called ‘circular debt’ is the outcome of these structural issues that have made the economy uncompetitive and hence a huge constraint to growth and its sustainability. The situation has been worsened by poor policy design and ‘other considerations’ resulting in installed generation capacity today being close to 15,000 MW, more than the demand, partly also owing to inadequate carrying capability of the transmission infrastructure and distribution systems. This has given rise to a requirement of Rs. 2 trillion in 2023/24 for capacity payments of which Rs. 1.3 trillion will just be for the plants lying idle; with the share of capacity payment in the base tariff per unit now Rs. 24 billion (including all entities generating energy- thermal, solar, wind, nuclear, government owned, etc.)
In the intricate dance between policy formulation and economic stability, the narrative of local investors and consumers emerges as a poignant tale of uncertainty and disillusionment.
#Pakistan #IPPs #CapacityPayments #ElectricityBills #EnergyTariffs #Taxes #IncomeTax #Inflation #PowerPlants #PIDE #Podcast #ThinkTank #Economy #Debate
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Very nice conversation. As Pakistanis, we all have to think seriously
Thank you Mahboob Iqbal, your feedback is our energy. Stay tuned @PIDEOfficial
You can give us feedback on our other content as well.
Hafiz Naeem-ur-Rehman and his party Jamaat-e-Islami have stood against IPPs with all their strength. Jamaat-e-Islami is also guiding people on mentioned points and demanding reforms.
Excellent interview. This lady is top notch has cleared the IPP issue well. IPPs are small part of the problem. It is an issue of energy inefficiencies and incompetence.
Thanks to Hafiz naeem for highlighting IPP's issue.
بہترین معلومات،جماعت اسلامی اور حافظ نعیم الرحمان نے اس اشو پر بھرپور آواز اٹھائی ہے
A thoughtful critical analysis...clearly articulated....always a pleasure to listen to her..
اس پر مزید معلوماتی پروگرام کی ضرورت ہے۔
Noted, will record more debates and Podcast in details. stay tuned. You can watch our other webinars and seminars on this topic, available at @PIDEOfficial
Why you are not saying that all are corrupt n made 2# money as bribe
Power plant operates at 70 % of its installed capacity n occasionally at 85%+ as per requirement.Plz study tech details.NEPRA is incompetent n corrupt
Nadeem ul Haq n team should study in detail or seek help from experts.These are all circumferential this us being discussed
Jinnah : "WORK , WORK AND WORK"
ESTABLISHMENT : " CORRUPTION,CORRUPTION AND CORRUPTION"
Hello. It's really good to see the learned scholars from PIDE discussing the pressing issue of high electricity prices and how this links to the IPPs. It's all good, but I'd still request that certain important terms like "capacity payments" should be clearly explained during the discussion for the benefit of regular listeners.
The host briefly talked about the meaning of the term "capacity payments", but to be honest I almost lost interest in the talk despite my curiosity about the topic because the very basic idea of "capacity payments" isn't clear to me.
Despite the criticism which is given in good faith, I would want to watch more future discussions from PIDE because I feel all of us can immensely benefit from the deep insights that PIDE staff has developed over their lifetimes.
My best wishes for the success of your channel.
Noted all your points, PIDE as a nation's think tank has discussed & debated almost all economic, social, political and policy issues, available at @PIDEOfficial
Thanks for the feedback about this one, your points will be shared with the discussants.
Sad to hear about IPPs😢, our institutes ........
Madam Afia ❤ Energy expert
Good highlights and discussion!
حافظ نعيم الرحمان تاريخ ساز شخصيت
تاريخ پاکستان ميں پہلی بار حافظ نعيم الرحمان خان کی صورت ميں قومی سطح کا ايسا ليڈر نصيب ہوا ہے جو ووٹ اور مال بنانے کے لئے نہيں بلکہ اپنے رب کی رضا کے لئے عوام کو انکا حق دلانے کے لئے چوروں ڈاکوؤں کے بہت بڑے اور طاقت ور گروہ کے سامنے ڈٹ کر کھڑا ہو گيا ہے ۔ اے ميرے اللہ تو ان کی اور ان کے جانثاروں کی حفاظت فرما اور انکے تمام نيک مقاصد کو اپنے رحم و محربانی سے پورا فرما ان کے راستے ميں حائل تمام شيطانی قوتوں کو شکست سے دوچار فرما ۔ آمين
ان محکموں اور سياستدانوں کی ہر پراجيکٹ ميں حصہ داری ہوتی ہے اور حصے دار اتنے زيادہ ہوتے ہيں کہ پلانٹ کے ريٹ کئی کناہ ہو جاتے ہيں باقی آپنے غلط فرمايا کہ ہم چاہتے ہيں کہ سب فری مل جاے ۔ ہم چاہتے ہيں کہ جو نجلی ہم استعمال کريں اسکے چارجز ليں ناجائز ٹيکسسز کيوں ديں
Pakistan’s Transmission Capacity is 22,000 MW that is one reason we cannot raise the denominator. There is a bottle neck that we need to solve.
Main reason for electricity prices hike is electricity theft... Only
Please do a podcast on K-Electric as well. Why it is inefficient to provide its designated services.
Will definitely record one on K-electric, For now you can read our Research Reports about K-Electric and other such companies, content available at PIDE Website www.pide.org.pk
IPPs show profits in excess of 17% given by the government due to their capital structure: 20% equity and 80% debt. The debt was sourced on concessional rates backed by sovereign guarantees. When you have dominant debt percentage, return on equity is amplified
Thought provoking
How pity! Having 45kMW of energy supply excess of demand, we are still paying huge bills just because of the inefficiencies and incompetencies of these highly educated bureaucrats.
Really good discussion
Thank you PIDE
The most expensive IPP's as of right now are from China? As I believe renegotiation is not accepted by Chinese power plants, if yes/no do we have any documentation on this?
Very nicely explained
Forensic Audit of The All IPPs and their Owner's Money Trail
Corruption = Incompetency ....!!! NO WAY
1. It is not a problem with 23 or 24 IPPs, but almost all 106 plants are producing trouble, for community at large. Problem is: GoP cannot pay their debt, and cannot close them, it has to extend their contracts, for further periods.
2. You say, it is because of the incapable bureaucracy that had not been able to understand the incoming future problems. That is not the case, the fact is that almost all governments from 1996 to date, had been involved in receiving kickbacks and corruption.
With well to do people embracing solarization prices of electricity will go further up.
Hafiz Naeem fighting well against ipps
thank you sir , for this vlog !
On the top of this situation, we are adopting a new trend of solar paneling. So what would be the situation than?? Everyone is installing it and still we are paying these companies for larger capacity to consumption ratio. How state will manage these??
Did we think Pakistan and UAE Investment environment is the same? . There is a wrong perception spread against capacity payments. If we do not purchase electricity, how do they pay their running costs such as employees' salaries? .Anchor questioned about deep countryside coal plant. He is not keeping in mind the transmission cost of electricity from the port area to the deep countryside.
Establishment put all blame on politicians everytime.
Do more corruption zardari sharif you are free and blessed
Good one.
Politicians and ipps combinly sharing every unit charges in electricity bills.
Because of delayed uproar Govt will go for Forensic audit but from EY or Furgosn and give some timely and nominal relief. The team in power is expert in it.
@@RabNawaz-yt4kk so you mean ke forensic audit bhi sirf dikhaway ka ho gah? 🤭
@@amanulhaq9130 I believe so. Because I have a sufficient background on it. You can adjudge govt fairness policy on any issue.
I don’t think the PIDE Researcher has done a fair extent of research. She must know that x% guaranteed ROI is in dollar terms and it is only done on the basis of feasibility study. Secondly, she must know that IPPs are contracted to provide the base load and not peak load.
She has no idea about why IPPs will accept only take or pay contracts and why capacity payments have to be made
Main problem of our economy!
Dear Sir, can you investigate, why IPPs came in Pakistan, what was the gap between demand and supply in 90s, why foreign loan Agencies refuses to provide soft loan on easy terms in early 90s in power sector. If you start with this, I think it will be helpful to get common understanding of the issue of power sector. What were the risks of investment in Pakistan due to Geopolitical unrest in our region especially , India , Agfaistan , Iran matters, terrorism etc. The Increase in power consumption per Capita has been an indicator of developing nation , why it fails in Pakistan. Knowledge of half truth will not solve the issue, total picture of the situation is very important to find out the root cause of the problem.Moreover, kindly present the case under like with like situation especially when we discuss about price comparison. All IPPs should be gone through under forensic audit, it seems a fair demand. Can you provide information how currently, situation being handled by Nepra. Could we install a power plant in local currency? In 1990, dollar rate was less than 25 Rs. Per dollar and now it is above 280 Rs. Per dollar. Your valuable comments will be awaited. Thanks in advance and good luck for your future endeavors.
Dear Ars Khan, noted your points for the next session on Energy
Thanks
Nuclear power plants another major issue is most expensive to operate.
Whatever you discuss, the government has no intention to solve the issue. Otherwise if they are interested, it could be solved in minutes.
Imports from China account for 30% of total. We should just charge 100% customs duty on all made in China products. It's ok to pay off IPP debt with China money.
Then solar is last option?
more than 10,000 mega watts to hum bhej rahy hn apky mulk Pakistan mn electricity
less than Rs002/- unit mn
its not even our cost of production but still we manage to do that for you people
ab hum rates and other issues ko revise kr rahy hn in azad states of jammu & Kashmir
aap apni govt se baat krein ky vo ye zulm pe zulm .. . ..
apka wapda aur other distribution system chor hai
khair kon chor nhn apky mulk mn
siwae .. .
This is not the matter of incompetency but instead is a big corruption of PMLN and PPP.
Very sad state of affairs economically in Pakistan.
Say all were done on money earning basis by shareefs n zardaris n cortupt officers
Corruption , corruption, corruption, corruption .................
NEPRA kis ke under ata he?sab leen deen ka muamla he
آئی پیپیزملک اورعوام کےخلاف قابض حکمرانوں کی طرف سےاندرونی سازش ھے_
Everytime the lady was trying to make a very imp point...baba g interrupted her...plz let the guest speak...couple of extremely imp pts were missed related to contracts bec of this..
یہ پاکستان کے خلاف انٹرنیشنل سازش ہے اندرونی غداروں کی مدد سے.
Madam didnt give detail about when were the contracts renewed and by who ?
Nawaz was , is and will be a curse for Pakistan!
How can this be called "incompetence"?
Can any officer be this stupid?
Some people are obviously abusing their powers to make tons of money!
Dubai is duty free, Pakistan grabs atleast 50% duty on import of power plant n its parts. There are atleast 3,4 other factors as well.
Half of dubai is justified. Plz learn it completely
Commission mafia loot rahe
IPP en khandano or edaro ki hien jo homakran hien
Hamari government chor hai
Iska matlab Pakistani ko Akala hi nahi , Dhafar hai
corruption is blessed from powerful
🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣
آپ نے بدنیتی پر مبنی معاہدوں کا ذکر کیوں نہیں کیا جن میں پلانٹ سو میگاواٹ کا دکھایا گیا ہے جبکہ اصل میں پچاس میگاواٹ کا بھی نہیں ہے۔ ایسوں کے ساتھ نہ صرف معاہدے ختم کئے جا سکتے ہیں بلکہ کھائے گئے پیسے بھی واپس لئے جا سکتے ہیں۔ آپ کی باتیں جانبدار ہیں
Why we pay uniform quarterly adjustment
Why we pay fuel charges
Why we pay additional PHL charges
Why we pay surcharges
Why we pay electricity duty
Why we pay sales tax
Why we pay tvl fees.
Jaga taxes looting and leaving london