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Deadweight

Thursday, Jun 13, 2024

Capacity charges guarantee payments to power producers regardless of whether the energy they produce is actually used or not. Pakistan’s power production capacity is far higher than its energy demand, leading to a high capacity charges burden. Why is the government allowing this waste of funds?

It seems like the government and the independent power plants get money for doing nothing. If Nepra, DISCOs or the energy ministry cannot rectify this duplicity then who can? Why is Pakistan contracting IPPs for power production that can never be used?

Engr Shahryar Khan Baseer

Islamabad