Capacity payments to inflate power production cost, consumer bills

ISLAMABAD: The incoming government will be facing a daunting task as it will have to make capacity payments worth billions of rupees to power producers following construction of new plants, which will place an additional burden on electricity consumers.

The energy sector is a big drain on the budget and external account. It puts strain on the budget in the shape of subsidies, circular debt and losses suffered by public-sector power distribution companies.

Moreover, higher capacity payments to new power plants will massively increase the cost of generation.

Published in The Express Tribune, 15th August, 2018