The Central Power Purchasing Agency (CPPA-G) has requested an extension for exemption from IFRS-9 accounting standards, citing growing concerns over potential credit losses due to unpaid power sector receivables. This exemption, set to expire soon, is critical for the CPPA-G to avoid the financial hit that would arise from the inability to clear massive receivables in the power sector.
The agency is grappling with large-scale receivables owed by various distribution companies and government entities. The CPPA-G fears that implementing the IFRS-9 standards—aimed at providing for expected credit losses—would severely impact its financial position. In its petition, the agency emphasized the risk of default and the urgent need for the government to address the ongoing circular debt crisis that continues to plague the power sector. Without resolution, the CPPA-G argues that meeting financial stability requirements could become increasingly difficult.
The CPPA-G has urged the government to take immediate action to clear the outstanding dues and provide much-needed financial relief to prevent long-term credit loss and financial instability in the sector.
Faraz-ur-Rehman Cautions Against Potential Policy Rate Hike Amid Inflation Worries
Faraz-ur-Rehman, former Chairman of the Korangi Association of Trade and Industry (KATI), has raised concerns regarding the government’s potential move to increase the State Bank of Pakistan’s (SBP) policy rate. This action would be in line with commitments made to the International Monetary Fund (IMF), should the country face renewed inflationary pressures or external financial challenges.
Referring to the IMF’s recent report, titled “2024 Article IV Consultation and Request for an Extended Arrangement under the Extended Fund Facility,” Faraz-ur-Rehman emphasized that the global lender advised Pakistan to remain cautious about reducing the policy rate unless there is clear evidence that core inflation is slowing and inflation expectations have stabilized.
Faraz-ur-Rehman warned that any rise in the SBP’s policy rate would have serious consequences for businesses and the economy, potentially slowing growth. He urged the government to prioritize inflation stabilization and the promotion of economic activity, warning that stringent measures could adversely affect both industries and consumers.
Assalamualaikum welcome to Engineering Review. We have with us. Dennis Knight, he’s president of ASHRAE. Thank you so much. Mr. Knight, you took time to talk to us. I would like to start that. How do you feel be in Pakistan You are for the first time you have been visiting Pakistan.
Dennis Knight:
This is the second or third time I’ve been to Pakistan. This is the second time I’ve been the HVAC and our trends. I visited chapters in Karachi, Lahore, Islamabad and made a little trip up to Muree one time. So pakistan’s not new to me. I enjoy coming. I enjoy visiting with my friends in the HVAC. Our industry.
Manzoor Sheikh:
So you are the person who can tell us what the change is coming in this sector in Pakistan.
Dennis Knight:
Oh, the change is coming. Not only here, it’s coming all over the world but especially in Pakistan. I mean your po is to grow. Your population growth over the next 20 years is going to be tremendous. You’re going to triple the number of tons of HVAC system as more and more people begin to well as we feel the effects of climate change and as more and more people get access to HVAC, you’re going to triple the size of this business. So it’s more important than ever that we get manufacturing brought to Pakistan. We get young people involved and we get to build a very large HVAC in our workforce in Pakistan.
Manzoor Sheikh:
This sector is huge. You know millions of companies are doing business, millions of engineers, millions of tacticians. I mean a lot of people are involved. You know the more huge is in sector, the more other challenges in the background of climate change. Yes, what do you think? Are we on the right direction?
Dennis Knight:
We are on the right direction, but we’ve got to change the way we talk about our industry. If we’re going to bring enough young people, you say there’s millions of people. If there’s millions.
Triple that make that three times that in just 26 years and we don’t have a lot of young people coming into the industry right. So we got to change the way we talk about our industry. We’ve got to talk about our industry, not about the technology and how to put things in. But we’ve got to talk to young people about the impact of our industry on climate change, on sustainability, on human health and well-being and why this is an important career and why a young person should should consider it as a career. You can do no matter what degree you have. No matter what discipline you’ve studied in there’s a place for you in HVAC&R and an ASHRAE In this industry, we need experts from every discipline.
Manzoor Sheikh:
Why is it so young people are not coming? What? What are the bottlenes?
Dennis Knight:
Well,Population is not growing as fast as our middle class, so our population, the number of people that we’re growing is not growing as fast as our industry and we’re all IT. Industry, the manufacturing industry, the engineering industry.
The private sector they’re all pulling from the same pool of people that graduate every year. And if we do not have a compelling message as to why some young person should choose this career, why they can come into this career, have passion, have purpose, have a family sustaining and upwardly mobile career path. We want at track them and they’ll go to other industries. So it’s very important that we talk about our industry and what we’re doing now and having an impact and how we since we consume 40 percent of or we our systems produce 40 percent of the world’s carbon emissions. How we are a vital player in reducing that.
Manzoor Sheikh:
Then I’ve been talking to just 5 ten minutes before you. I was talking to Sarah, you know, ask that whatever we are doing, you, there are many things that we have to do. But the thing is, is it enough that we are doing in the context of climate change so that mitigate the impacts of climate change?
Dennis Knight:
Well, we have to step up our game. We have to begin talking to our clients, convincing them that it’s important to convert from fossil fuels or by-materials that have low embedded carbon. And we’ve got to do that faster than we’re doing it now if we’re going to meet the targets we’ve set and and as we said last year you hit the challenges we’ve accepted, we have got to move forward faster if we’re going to eliminate carbon emissions by 2050.
Manzoor Sheikh:
Business is you know, from one respect is about profits, profit earning. You think it’s a greed of profits that is hindering and maybe one of the reason.
Dennis Knight:
Well, maybe I mean, maybe pushing for more and more profits and focusing on the bottom line is’t necessarily always the best solution for the environment. Best solution for the employees, best solution for the communities I think we’re going to see as the world of finance, the world of insurance and the consumers become more and more aware of how important having a low impact on the environment is in the decisions they made. The products they buy, the systems they buy, the more and more you see that i think you’ll see that profit. The bottom line for profit to be less important, maybe be than environmental and social justice.
Assalamualaikum welcome to Engineering review. We are in a HVACR exhibition here in Karachi and we have with us Miss Sarah She is at the moment treasure of ASHRAE. But the future president of this organization thank you so much for talking to us. HVACR is a huge sector. Millions of companies, billions of engineers, billions of technicians are involved. The more huge is this sector, the more are the challenges in the background of climate change. When you think about that, what comes in your mind?
Miss Sarah:
There’s a lot of work for a lot of people. So dennis’s theme this year our current president is all about empowering our workforce. And I think what we’re seeing here in Pakistan and in all over the world is that there’s a lot of opportunity in this building industry for everyone.
Manzoor Sheikh:
Well, we talk about opportunities right. I mean there are a lot of commitments at a global level that we have to you know take drastic efforts so that we can mitigate the impacts of climate change. What do you think? What’s the Role of ASHRAE.
Miss Sarah:
So I think Mr Faruk maboo’s talk this morning really summed it up for me, particularly in the challenges that Pakistan faces, particularly with the textile industries in the United States where I’m from in the northeast area of the country. We don’t have a lot of textile manufacturing, but we do like to wear our denim and so in the conversation this morning I learned that you know that creating denim, making denim is a huge consumption for water and I had no idea in the fact that so much water pollution is is here in Pakistan and I think ashore has a role to play as far as our designers and our technicians to find more sustainable solutions for this industry and for the other industries in Pakistan. Because as we said over over the next you know 15 to 20 years, the number of HVAC systems that are going to be required is going to at least double. And so you know again the opportunities here to train people and to you know, educate them as far as how to design these systems more sustainably. To look at some of the new technologies here that we have today on the trade show just to see what that future looks like.
Manzoor Sheikh:
Okay. I mean whatever we are doing at the moment. Right training and designing new technologies that help you out. You know the bit, get the impacts of all that climate change. If you make a comparison, maybe the things which are not getting better too much and the designing and our work and the efforts we are doing anything that you see. These two things have synchronized.
I mean, the more whatever we are doing. Yes, if you think it’s enough.
Miss Sarah:
It’s never really enough. I think we’re on the right path, but I think these things are going to take a little time. So you know, we are already seeing changes to our climate and we know that across the world that buildings account for 40 percent of like, our greenhouse gas emissions. So looking at any opportunity that we can to go with greener technologies to reduce our fossil fuel burning, we’ll make that difference now. How fast is it going to change? I don’t really know the answer to that. You know, we just had a major flood in the United States and and it was in an area of the country that isn’t prone to flooding. It wasn’t a coastal community, it was 300 miles from the coast. And so you know, we’re seeing this all over. It’s not. It’s not just happening in one country right. It’s happening across the globe. And so I think it has taken some time to get to the forefront of understanding what the climate crisis really means. But to understand that it is a global issue. It’s not just like I said isolated to one particular country. So I think the fact that.
Buildings take you know into account like I said 40 percent of our greenhouse gas emissions, we have the opportunity to make a huge difference in seeing what you know. Reducing the temperature, the global temperature rise and hopefully know can bring some of our climate issues back into check.
Researchers have developed a model that can be used to project what a nation’s energy storage needs would be if it were to shift entirely to renewable energy sources, moving away from fossil fuels for electric power generation. The model offers policymakers critical information for use when making near-term decisions and engaging in long-term energy system planning. The paper, “Modeling energy storage in long-term capacity expansion energy planning: an analysis of the Italian system,” is published in the Journal of Energy Storage. “We focused this study on Italy’s energy system because it has suffered significantly in recent years, due to difficulties obtaining affordable natural gas due to Russia’s invasion of Ukraine,” says Anderson de Queiroz, co-author of a paper on the work and an associate professor of civil, construction and environmental engineering at North Carolina State University. “That has raised questions about how Italy can make its energy system more robust. Our goal here was to develop a model that would allow us to determine what Italy’s energy storage needs would be if it moved completely away from fossil fuels and met its electricity demands with renewable resources.” Energy storage is a critical piece of this puzzle because renewable energy sources, such as solar or wind, don’t produce energy at the same rate all the time. For example, you need to be able to store energy generated by solar power so that you can use that energy at night, when the sun is not shining. To better understand an energy system’s energy storage needs, the researchers modified an existing optimization model called Temoa. Specifically, the researchers modified the model to account for how renewable energy production would change during different times of day and different times of the year. For example, there would be greater solar power production during summer when days are longer, but solar power would still drop overnight. The researchers also accounted for changes in energy consumption at different times of day and during different seasons. For example, energy consumption may go up during hot summer afternoons if people use air conditioners. Capturing these daily and seasonal fluctuations in renewable energy production and energy consumption allowed the researchers to create a more detailed model of the energy system, which allowed them to better answer questions about the system’s energy storage needs. How much renewable energy could be redirected to storage? How much energy storage would be needed to meet demands? “Our modified model makes clear that increasing energy storage capacity is critical for decarbonizing Italy’s power sector, but it also offers some detailed insights,” de Queiroz says. “For example, the model suggests that Italy needs to be able to store about 10% of its electricity generation in short-term energy storage devices.” The term “short-term energy storage” is somewhat confusing. It does not refer to how long a storage device can store energy. Rather, it refers to how long the device can sustain its maximum power output. For example, a one-hour 2-kilowatt device could release two kilowatts of power for one hour, whereas a three-hour 2-kilowatt device could release two kilowatts of power for three hours. Energy storage systems that can release the maximum power output for four hours or less are typically considered short-term energy storage devices. “Our projection related to short-term energy storage devices is driven both by the energy system’s energy storage needs and the fact that these devices are the most cost-effective way to meet those needs, based on recent cost projections and estimates,” de Queiroz says. But while this paper focuses on Italy, the modified model the researchers developed for this work can be used to project energy storage needs for any energy system. “As the world moves toward renewable power sources, we need to find ways to account for their variability,” says de Queiroz. “Energy storage devices give us the flexibility to adjust to fluctuations in energy production while also giving us the reliability we need to meet energy demands. And models like the one we’ve demonstrated here provide critical insights for policymakers regarding their long-term energy storage needs.”
