“Private power producers in Pakistan should be driven to improve efficiency and raise output”, General Electric Power & Water CEO Azeez Mohammad stated in an interview with BR Research. At the Minds + Machines Conference in Dubai, he lamented the lack of incentive for private power producers to produce more electricity; more efficiently.
General Electric aims to generate up to $465 billion in economic value in the MENA region and Pakistan factors big in its plans. At an event organized by the company’s first regional head office, GE Chairman Jeff Immelt spoke of the convergence between physics and analytics, and about GEs plans for the Industrial Internet. At the core of its strategy, GEs strategy is to install software that drive efficiency and provide security, for myriad industries.
In the power sector, its collaboration with Sapphire Electric Company is a global case study for collaboration between a power producer and the digital industrial giant. Now GE has announced investments of $50 million in Pakistan, including a dedicated Technology & Digital Center and clean energy projects.
The need for enhanced efficiency in Pakistan is plain to see. The average efficiency level at which diesel power plants in Pakistan operate is about 20 percent. “Physics states 65 percent efficiency is possible” contends Mr. Muhammad and urges the government needs to see the value in improving the efficiency to raise output of power plants in the country.
Besides Sapphire Group, the likes of Engro Corporation, Saif Group and other private sector Gencos are working with GE towards similar goals. However, they point towards existing power purchase agreements which cap the amount of electricity they can supply to the national grid. Given the persistent gap in power demand and supply, these companies are hopeful that a review of the existing policy can bring more power in the national grid.
Company sources informed BR Research that in his visit to Pakistan, Jeff Immelt met with Prime Minister Nawaz Sharif in an effort to add urgency in power sector reforms. Its proposition includes access to finance for projects. For the government, whose rise to power was propelled by its promise to end the energy crisis; the impetus and the means for a fix to the crisis, appear ripe for action.
This article was originally published on November 05, 2015 in the Business Recorder (BR) research.
