Alternative Energy and Governance Issues

Urdu Bazaar is a much frequented book market in the central business district of Karachi. According to a survey organised by the authors, it has over 400 shops. Like other markets in the city, it is subject to long periods of load-shedding. The shopkeepers have installed generators and/or uninterrupted power supply (UPS) units. As an alternative to KESC supply, the generators are expensive to buy (average cost Rs 37,500) and expensive to operate (average cost Rs 5,882 per month). In addition, the noise and air pollution that they cause has, according to the shopkeepers, damaged their health and frayed their nerves. Also, their noise makes telephone communication and conversation with their customers almost impossible. Customers too do not wish to visit the shops while the generators are in operation. Since there is no space for placing generators within the shops, they are all placed in corridors and on the pavements. This causes difficulty in movement, and since they are all located next to each other, it increases noise pollution and makes it unbearable.

The UPS is a cheaper solution, both for purchase (average cost Rs 20,000) and operational costs (average cost Rs 1,000 for batteries per month). This does not include KESC electricity costs for charging the UPS.  However, the UPS does not store enough energy to service the long hours of load-shedding, especially since connections are switched off at night, and as such, recharging does not effectively take place. Also, pollution from the UPS batteries causes nausea and headaches.

Due to these considerations, 94 per cent of Urdu Bazaar shopkeepers wish to invest in some form of alternative energy. The solar option seemed attractive to them. So solar energy providing companies were contacted, they were introduced to the problem, and they presented their technical and financial proposals. The cheapest offer was Rs 98,000 for two energy savers, one fan and one telephone charging outlet. For two fans, four savers and one telephone point, the cost worked to Rs 149,000. We thought that these high costs would not be acceptable to the shopkeepers. However, they were willing to pay these costs, and some of them even more for a better service. Cheaper options were also presented for a mix of solar plus KESC connection arrangement. The shopkeepers insisted though, that before committing they would like the solar company to put up a demonstration unit. The solar company is willing to do this. Thus, finances and the technology are not issues.

However, the shopkeepers have five concerns and are not willing to invest unless these concerns are addressed. These concerns are one; the KESC is like a hungry wolf, thirsty for money. It would disconnect them from the grid to blackmail them once it saw that it was losing revenue. This would make things difficult for them during rainy days when the solar system would not be able to function effectively. They want a guarantee that the KESC will not disconnect them from the grid. Two; they want a guarantee that the government will not impose a tax on solar energy generation. They are further afraid, that since there is no continuity of policies, a future government might cancel such a commitment given by the present government. Three; they are also afraid that if they make such investments, the “bhatta mafia” will become active and extort money from them. They want a guarantee that they will be protected from this. Four; the company offering the alternative might just disappear as so many companies have in the past, and the guarantees they offer for quality, maintenance and operation, would become worthless. And five; they are afraid for the safety of their solar panels which will be placed on the roofs of the building in which their shops are located.

It is interesting to note that the constraints in providing alternative energy to Urdu Bazaar are not of a financial or technical nature, but are related to governance issues.