The prolonged shutdown of Pakistan’s 969 MW Neelum Jhelum Hydropower Project, inoperative since May due to a severe rock burst fault, has deepened the country’s ongoing energy crisis. The suspension of operations not only costs the national exchequer millions of rupees each day but also deprives consumers of access to affordable hydroelectric power. As a result, the need for a resolution has become critical, impacting both Pakistan’s energy infrastructure and economy.
Energy Deficiency and Its National Impact
Pakistan’s energy landscape heavily relies on its hydroelectric resources, and the Neelum Jhelum Hydropower Project has been a key player in providing affordable electricity to the national grid. The project’s unexpected closure has increased pressure on the country’s already strained power resources, which heavily depend on more expensive fuel-based sources in the absence of sufficient hydroelectric power. Consequently, the gap between energy demand and supply is widening, pushing the national grid to source power from costly alternatives that raise the cost of electricity production and hurt the economy.
The project’s suspension means a significant reduction in cheap electricity supply, leaving consumers more vulnerable to fuel price adjustments. With rising inflation and high living costs, this burden has prompted the National Electric Power Regulatory Authority (NEPRA) to explore possibilities for reducing fuel charges for consumers. However, the question of who will bear the repair costs for the Neelum Jhelum project remains unanswered.
NEPRA’s Efforts to Mitigate Consumer Costs
In a public hearing on the issue, NEPRA highlighted the impact of the Neelum Jhelum project’s closure on electricity rates. They explored a potential Rs. 0.71 per unit reduction in fuel cost adjustment (FCA) charges for Distribution Companies (DISCOs) to offer some relief to consumers. While NEPRA reserved its decision on the FCA reduction, the authority’s Chairman expressed frustration over the lack of clarity from the Central Power Purchasing Agency (CPPA) regarding repair costs for the hydropower project. Despite requests, no concrete estimates for the repair costs were provided by the CPPA, sparking concerns over the delay and inefficiency in addressing the ongoing issue.
During the hearing, NEPRA Chairman also voiced concerns about the CPPA’s lack of a proactive approach, as they have yet to provide a timeline for the restoration of the project. The frustration stems from the lack of transparency, which is crucial for planning and budgeting future energy costs. Given the Neelum Jhelum project’s importance in Pakistan’s energy portfolio, a lack of action and clarity risks worsening the energy crisis, potentially impacting national power stability and economic growth.
Inquiry and Funding Decisions
In light of these delays, a committee appointed by the Prime Minister is currently investigating the rock burst incident. This inquiry is expected to uncover the causes of the structural damage, assess the responsibility, and recommend solutions. NEPRA has stressed that decisions regarding the funding for repairs will depend on the findings of the inquiry report. This step ensures that accountability is maintained, as the incident has raised concerns about the design and structural integrity of the Neelum Jhelum tunnel system, which has experienced issues previously.
The inquiry will play a critical role in determining the source and responsibility for funding the repairs. If the fault lies with any contractors or design flaws, the government may take steps to ensure that responsible parties contribute financially to the repair process. This approach seeks to prevent further burdens on public funds while ensuring timely restoration of the project.
Economic and Consumer Impact of Project Suspension
The indefinite suspension of the Neelum Jhelum Hydropower Project has not only highlighted Pakistan’s vulnerability to energy disruptions but also has exposed flaws in long-term planning for large-scale energy projects. For now, the absence of power from Neelum Jhelum is forcing reliance on costly thermal power generation. Thermal power costs are significantly higher than hydropower, and the shift has a direct impact on consumer electricity bills, causing financial strain for households and businesses.
While NEPRA’s proposed Rs. 0.71 reduction under FCA could offer temporary relief to consumers, it does not address the underlying need for more affordable and sustainable energy sources. The project’s shutdown is a setback for Pakistan’s renewable energy ambitions, as it demonstrates the limitations and risks involved in large-scale hydropower projects without adequate backup and safety protocols.
Looking Ahead: Resuming Operations and Strengthening Energy Security
The urgency of resuming operations at the Neelum Jhelum Hydropower Project cannot be overstated. As Pakistan moves forward with its inquiry, the government and energy regulatory bodies must work in coordination to expedite the repair process and ensure accountability for project management shortcomings. Establishing preventive measures against future disruptions is equally important, especially as Pakistan grapples with the challenges of an increasing energy demand.
In the long term, the government may consider diversifying its energy sources beyond hydropower, expanding investments in solar, wind, and other renewable energy options. Such diversification would not only create a more balanced energy portfolio but also reduce dependence on a single source and enhance energy security.
The Neelum Jhelum Hydropower Project’s closure underlines the importance of rigorous planning, transparency, and accountability in national infrastructure projects. The ongoing inquiry and NEPRA’s intervention are steps toward addressing these concerns, but the road to a sustainable solution requires urgent action, both in repairs and strategic planning.
As the energy crisis deepens, NEPRA’s decision on fuel cost adjustments and the government’s strategy for resuming the project will be critical in determining the immediate and long-term impact on Pakistan’s economy and energy security.
