Solarization cannot be blocked forever

The price of storage the only barrier to wholesale flight from the grid

Prime Minister Shehbaz Sharif has stressed the need for the introduction of electric vehicles, saying this would help conserve foreign exchange reserves amid the recent regional situation and the rising global oil prices. He was speaking at a ceremony to mark the provision of eco-smart electric vehicles to the Islamabad Traffic Police. Of course, when making such an argument, the government should also ensure that it is not importing oil or LNG to generate the electricity that is to be used by EVs. However, there are a number of power stations using indigenous coal. At the same time, the Prime Minister should do more to ensure that government departments move over to solar power. The distribution companies will object, because the government is a very good customer. However, the government, especially the provincial governments, are bad to settling their bills, with the result that all DISCOs have got huge receivables from the government. Governments are quarrelsome customers, and cumulatively, these receivables are disputed, with the governments exercising an option that other consumers do not have, which is not to pay. Another problem for DISCOs if government offices privatize is that they would not consume power at night.

A report in this week’s issue of this newspaper’s Profit magazine shows why prices have increased for solar panels even though net metering rates have been decreased. It also points out that the increase in the rate has only made it more likely that consumers will invest in storage batteries. Again, it will be economic imperatives driving the consumer. Sufficient storage means that consumers will be able to go completely off the grid. So far, that has not happened,but the DISCOs seem to be making no preparation for that. Net metering has also  been facing difficulties due to distribution problems. DISCOs should realize that for the first time, consumers are themselves responsible for generation. If the economics of storage allows them to get off the grid, they will be independent of distribution as well.

The Competition Commission of Pakistan report mentioning distribution bottlenecks as a problem, also identified investment and opacity as problems. The government should look especially to the distribution network, which is a barrier to EVs. This crisis should encourage consumers to opt for EVs, because fuel prices are not going to get better. In factr, they are likely to get worse.