THIS is with reference to the report `Inconsistent energy policies hit economy` (March 19), which quoted the Hyderabad Chamber of Small Traders and Small Industry (HCSTSI) president as castigating the government`s power policy. The criticism was actually a direct indictment of the energy sector`s mismanagement over the years, exposing myopic, flawed, irrationaland inconsistent policies that have led to the current dismal state of the entire power sector that is plagued by several challenges.

The inefficiency of the power sector has cost the government Rs1,190 billion, amounting to about one per cent of the estimated gross domestic product (GDP), in the 2024-25 fiscal.

A review of the energy policies and power sector programmes from 1980 onwards points out the critical planning failures. Initially, to cater to the supplydemand gap arising out of persistent economic growth, industrial expansion and population rise, the government wasted much time on developing consensus on the Kalabagh dam instead of advancing other hydroelectric power projects whose feasibility reports were ready.

Then, it laid the roots of present power crisis through hastily concluded agreements with independent power producers (IPPs) in the mid-1990s that were backed by sovereign guarantees, and had features like a fixed rate of return under a take-or-pay model, while the payments were indexed to the dollars. The terms and conditions and contractual obligations suited the IPPs, which were allowed electricity generation through imported oil and coal, creating an unsustainable model.

Instead of learning a critical lesson, the policymakers continued with the same policies and the government procuredvery expensive power plants from China under the China-Pakistan Economic Corridor (CPEC) umbrella without first carrying outthe necessary due diligence.

Interestingly, the government ignored the power sector structural reforms to address the sector`s inefficiencies and complex web of challenges. Thus, the assertion of many to reconsider the IPPs cannot be disputed. The proposal certainly holds weight.

Similarly, the current policy shift of 63pc reduction in buyback prices for net-metering users who supply excess solar-generated power to the national grid, as pointed outin the report,is unlikely to resolve the long-standing power woes.

Rather, it will de-incentivise the net consumers from investing in a solar energy system. Besides, it will discourage potential new customers from adopting renewable solar technology. The government`s rationale that the move will reduce the burden on grid consumers and facilitate capacity payments seems far-fetched.

The government should shift its focus to a more holistic approach towards the energy sector rather than solely focussing on reducing the buyback rates. This can only be achieved through radical and comprehensive reforms based on a vision and long-term planning that address critical challenges, such as institutional weaknesses, inadequate transmission capacity, inefficient distribution companies (Discos), an improper energy mix, theft, and poorrecovery rates.

Focussed efforts on privatising and modernising the generation, transmission and distribution of power, coupled with investments in smart grid technology and advanced net-metering systems, are essential for enhancing energy efficiency.

Shahid Ali Abbasi Karachi