energy crisis in pakistan essay jwt

Essay on “Energy Crisis in Pakistan” for CSS, PMS, Judiciary Examinations

• August 30, 2021
• Essay for CSS PMS and Judiciary Exam

This is an essay on “Energy Crisis in Pakistan” for CSS, PMS, and Judiciary Examinations. The energy crisis is the largest single drain on Pakistan’s economy. This crisis stems from a fuel mix transformation initiated two decades ago when power generation came to rely more on imported furnace oil than hydropower. The current energy crisis began to manifest itself in earnest by late 2007. So here is a complete Essay on “Energy Crisis in Pakistan” for CSS, PMS.

Introduction

• Energy, demand for all fields
• Cheap ways of producing Energy

Causes of Energy Crisis

• Lack of dams
• Inability to explore coal: 6th largest coal reserves in the world
• Lack of renewable energy sources
• The problem of circular debt
• Losses in transmission and distribution
• Wastage of energy
• Domestic and household consumption
• Aging of the equipment
• High cost of fuel
• Economic loss
• Agricultural loss
• Closure of industries
• Unemployment
• Social issues

Energy Policy (2013-2018)

Suggestions

Alternative sources of Energy

Nuclear power

• Building of darns
• Long term dams
• Medium-term dams
• Short term dams

Exploit the coal reserves

Regional gas and oil pipelines

IPI project

TAPI project

Updating the system of transmission and distribution

Essay on “Energy Crisis in Pakistan” for CSS, PMS, Judiciary Examinations

Energy is the lifeline of a nation. The economic engine and the wheels of industry, agriculture, and business need the energy to move forward. Pakistan faces a major energy crisis in natural gas, power, and oil. Power outages usually last 10-12 hours a day in the cities and more in the rural areas. This has left the industries of Pakistan (mainly agricultural, secondary and tertiary sectors) stunned and so they are unable to fully operate.

This has a very negative impact on the economy of the country. The demand for energy in Pakistan is huge, and cannot be fulfilled by electricity production based on oil. It can only meet 20% of our requirement through native production and the remaining oil is imported from the Gulf States and other countries. No major oil, the field has been discovered in the last three decades. It is clear that other alternative production methods must be considered to meet the demand. Most likely one that is cheap, considering the initial setup cost, and costs attached.

The second method of production we use is thermal (i-e using coal to produce electricity). Pakistan has been blessed with wealthy mineral resources, but the sad part is that we are too ign0rant to explore them. We are sitting on gold mines and yet we do nothing about it. Balochistan, for instance, is rich in all sorts of minerals and could be exploited heavily. If we could solve the feudal problems of the provinces, and let the national and international companies explore the area, we might solve our fuel problems too. But this is a precious non-renewable resource, so we need better options.

Another major option is hydroelectric power generation. This is the cheapest and most feasible way of producing electricity for our country. Two major energy dams in Pakistan are Tarbela and Mangla. If only the proposed Kalabagh darn would be constructed, 80% of our energy needs would be fulfilled. The best option is to construct this dam and take advantage of the natural hydrography of Pakistan to the maximum possible extent.

Wind power and solar power generation are good alternatives as well. Their initial costs are low when compared to other methods, and are definitely in the best interests of our country.

Following are the Causes of the Energy Crisis in Pakistan.

In Pakistan, no major dam was constructed after the completion of Mangle and Terbela Dams early I980s. Though the demand for electricity was increasing many governments came and completed their terms but neither government built darns which is the cheapest source of the energy. Pakistan needs to make Kalabagh darn and Basha dams but due to politicization and lack of dedicated politicians, Pakistan is confronting with the problem of the energy crisis. Electricity from hydel cost us Rs. 2-4 rupees per unit.

Pakistan is blessed with a large amount of coal. No serious work is done to explore coal for power generation. This complains that the coal quality is inferior. However, ·ready-made solutions are available to burn any type of coal. The government is looking for the private sector to play its role. In our opinion, the government itself should come forward and install the power plants on the site of coal mines only.

The government is not producing electricity from renewable sources of energy such as wind, solar, tidal, biogas, etc. Though Pakistan has maximum summers suiting for solar energy there are huge taxes which are paid while purchasing this technology. Through solar, Pakistan can produce up to 1,00,000 MW of electricity. Besides, wind energy has the potential of producing 50,000 MW of electricity but Pakistan is not producing from this cheapest source.

If serious work is done then the total shortage can be met from the Hydro and wind power sectors. It is also suggested that small loans should be provided to consumers to install small hydro and solar cells for one family usage of electricity.

One of the main reasons for the serious shortfall in the generation of thermal electricity 1s the problem of the “circular debt” which the present government inherited from the previous regime. In 2007, the government did not compensate the power companies for the subsidy that was being provided to consumers. The power companies in turn could not pay the oil and gas companies, reducing their liquidity to import the furnace oil that was needed to generate electricity.

The interim government , before the elections, in fact, forced the commercial banks to lend Rs34bn to the oil companies whose credit limits were already exhausted. This problem of “circular debt” became more serious in the summer of 2008, as petroleum prices jumped from $100 to $147 a barrel. It is really surprising that this problem has become the main cause of increasing load-shedding but has not so far been addressed on a priority basis. In 2015 the circular debt reached Rs.600 billion.

Very heavy line losses in transmission and distribution because of old and poorly maintained transmission systems, estimated at over 20 percent compared to eight to ten percent in other countries. Large-scale theft of electricity is clearly revealed by the growing difference between units generated or purchased and those paid for.

Wastage of energy by the industry consumes 30 percent of total electricity due to less efficient systems and other practices. For example, the Chinese consume 30 percent less electricity in textile mills because they use water partially heated by solar panels in their boilers. Overuse of energy by the transport sector (consuming 28 percent of total energy) due to old and poorly tuned engines.

Domestic and household consumption which uses 45 percent of total electricity also depicts wasteful and unnecessary uses of lights, air-conditioners, and large-scale illuminations on different occasions. The problems outlined above reveal many structural flaws in our energy system. These include over-dependence on imported energy, inadequate political will, limited financial support and very weak implementation capacity.

One very important reason attributed to this energy shortage is the aging of the generating equipment which could not develop the electricity as per the design requirement. This is the responsibility to continuously updating the equipment and keeping a high standard of maintenance. we sincerely think serious thought should be given for general overhaul and maintenance of existing equipment to keep them in good working order.

So far energy conservation is concerned, newspapers pay lip service in seminars. No serious thought is being given to utilize the energy at the optimum level. A new culture needs to develop to conserve energy. Sometimes on government level illiteracy is blamed for the failure of the energy conservation program. this is not true. Maximum energy is consumed by the elite class which controls all the resources of knowledge and communication. But for their own luxury, they themselves ignore the problem. Government should seriously embark on an energy conservation program.

Following are the effects of the energy crisis in Pakistan.

Energy is pivotal for running all other resources and the crisis of energy directly influences all other sectors of the economy. The economic progress is hampered by a decline in agricultural productivity as well as by halting operations of industries. One important factor of lower GDP and inflation of commodity prices in recent years is attributed to shortfalls in energy supply. Pakistan is facing a high cost of production due to several factors like the energy crisis, the hike in electricity tariff, the increase in interest rate, devaluation of Pakistani rupee, increasing cost of inputs, political instability , removal of subsidy & internal dispute.

Above all factors increase the cost of production which decreases the exports. Exports receipts decrease from$ 10.2B to$ 9.6B. The global recession also hit badly the textile industry. Double-digit inflation also caused a decrease in production in the textile sector.

The agricultural productivity of Pakistan is decreasing due to the provision of energy for running tube wells, agricultural machinery, and the production of fertilizers and pesticides. Thus higher energy means higher agricultural productivity.

Nearly all Industrial units are run with energy and breakage in energy supply is having dire consequences on industrial growth. As a result of the decline in energy supply, industrial units are not only being opened but also the existing industrial units are gradually closing.

By the closure of industrial units and less agricultural productivity, new employment opportunities ceased to exist, and already employed manpower is shredded by the employers to increase their profit ratios. Thus energy crisis contributes to unemployment.

Pakistan’s textile industry is going through one of the toughest periods in decades. The global recession which has hit the global textile really hard is not the only cause for concern. Serious internal issues including the energy crisis affected Pakistan·s textile industry very badly. The high cost of production resulting from an instant rise in energy costs has been the primary cause of concern for the industry.

The depreciation of the Pakistani rupee during last year has significantly raised the cost of imported inputs. Furthermore, double-digit inflation and the high cost of financing have seriously affected the growth in the textile industry. Pakistan’s textile exports in turn have gone down during the last three years as exporters cannot effectively market their products since buyers are not visiting Pakistan due to adverse travel conditions and it is getting more and more difficult for the exporters to travel abroad. Pakistan’s textile industry is lacking in research &development.

The production capability is very low due to obsolete machinery and technology. This factor is primarily related to the domestic usage of energy (cooking, heating, and water provision). Load shedding causes unrest and frustration amongst the people and results in agitation against the government.

The government has finally formulated the much-awaited National Energy Policy 2013-18. Under the policy, power sector subsidy will be phased out by 2018, and load-shedding will be ended by 2017. It aims at generating surplus electricity in 2018, privatizing government-owned power plants and a few power distributing companies (Discos), bringing the double-digit cost of power generation to a single digit, and restructuring the water and power ministry.

National Electric Power Regulatory Authority (Nepra), Oil and Gas Regulatory Authority (OGRA), adjustment of outstanding dues owed by public and private organizations through federal adjusters, and formation of regional transmission and power trading system. The policy comprises seven points envisions a profitable, bankable, and investment-friendly power sector which meets the nation·s needs and boosts its economy in a sustainable and affordable manner while adhering to the most efficient generation, transmission, and distribution standards.

To achieve the long-term vision of the power sector and overcome its challenges, the government has set the following goals: Build a power generation capacity that can meet the country’s energy needs in a sustainable manner; create a culture of energy conservation and responsibility; ensure generation of inexpensive and affordable electricity for domestic, commercial and industrial use; minimize pilferage and adulteration in fuel supply; promote world-class efficiency in power generation; create a c.utting edge transmission network; minimize .financial losses across the systen1, and align the ministries involved in the energy sector and improve governance .

There are Various Methods to Solve the Energy Crisis in Pakistan.

Though wind, Pakistan has potentials of wind energy ranging from 10000 MW to 50000 MW, yet power generation through wind is in initial stages in Pakistan and currently 06 MW has been installed in the first phase in Jhampir through a Turkish company and 50 MW will be installed shortly. More wind power plants will be built in Jhampir, Gharo, Keti Bandar, and Bin Qasim Karachi.

Solar power involves using solar cells to convert sunlight into electricity, using sunlight hitting solar thermal panels to convert sunlight to heat water or air. Pakistan has the potential of more than 100,000 MW from solar energy. The building of solar power plants is underway in Kashmir, Punjab, Sindh, and Balochistan. However, private vendors are importing panels / solar water heaters for consumption in the market.

Alternative Energy Development Board (AEDB) is working for 20,000 solar water heaters in Gilgit Baltistan. Mobile companies have been asked by the government to shift the supply of energy to their transmission towers from petroleum to solar energy panels.

Biomass production involves using garbage or other renewable resources such as sugarcane, corn, or other vegetation to generate electricity. When garbage decomposes, methane is produced and captured in pipes and later burned to produce electricity. Vegetation and wood can be burned directly to generate energy, like fossil fuels, or processed· to form alcohols. Brazil has one of the largest renewable energy programs from biomass/biodiesel in the world, followed by the USA. Alternative Energy Development Board (AEDB) of Pakistan has planned to generate 10 MW of electricity from municipal waste in Karachi followed by similar projects in twenty cities of the country.

Tidal power can be extracted from Moon-gravity-powered tides by locating a water turbine in a tidal current. The turbine can turn an electrical generator, or a gas compressor, that can then store energy until needed. Coastal tides are a source of clean, free, renewable, and sustainable energy. Plans are underway in Pakistan to harness tidal energy; however, no implementation has been made so far.

Nuclear power stations use nuclear fission reactions to generate energy by the reaction of uranium inside a nuclear reactor. Pakistan has a small nuclear power program, with 425 MW capacity, but there are plans to increase this capacity substantially. Since Pakistan is outside the Nuclear Nonproliferation Treaty, it is excluded from trade in nuclear plants or materials, which hinders its development of civil nuclear energy. The remaining issues in the development of nuclear energy are an enrichment of uranium from U235 to U238, controlling chain reaction, and dumping of solid waste.

Pakistan has the potential for hydro resources to generate 41000 to 45000 MW, however, only 6555 MW is currently being generated by this important renewable resource. Four large hydropower dams namely Kalabagh 3600 MW, Bhasha 4500 MW, Bunji 5400 MW, and Dasu 3800 MW can be constructed to generate hydroelectricity. Similarly, many small to medium hydro plants can be installed on rivers and canals, etc.

The longer-term solution to the energy crisis will be to restore the hydro-thermal mix to 60:40 or at least 50:50 in the next five years. The Water Accord of 1991 had o~ened the way for constructing many dams to store water and generate electricity. But the continuing controversy over the KalabaghDam became a major obstacle. Surprisingly, even many smaller and non-controversial hydroelectric projects have been delayed without any justification.

The hydel projects in the pipeline include the following: Neelurn Jhelurn (969 MW), Tarbela Fourth Extension (960 MW), SukiKinari (840 MW), Munda Dam (700 MW), Khan Dubar (130 MW), Allai (126 MW), and Jinnah Hydroelectric power project (96 MW).

Pakistan has the world’s sixth-largest reserves of coal, after the recent discoveries in Thar. The total coal reserve in Pakistan is about 175 billion tons. The current coal production is only 3.5 million tons per year, which is mostly used for the brick and cement industry. Coal has typical problems, such as a high sulfur content (it produces sulfur dioxide, the source of acid rain), mineral matter content (leading to ash and pollution problems), carbon dioxide emission (contributing to global warming), and high moisture content.

However, technologies are available to minimize all of these. Conversion technologies are currently under development to convert coal into environmentally-friendly methanol and hydrogen gas to be used as a clean fuel. The US is working on a major initiative called future gen to produce “zero-emission” power plants of the future. Thar coal can be cleaned and the sulfur reduced so that it can be burnt in conventional coal power plants and also convened into gas. Coal gasification is a slightly more expensive process, but the gas from coal is a proven and cleaner technology. The Chinese had prepared a feasibility report in 2005 to produce 3,000 MW at 5.8 cents per unit, but the project could not move forward because they were offered only 5.3 cents.

There are also many possibilities of regional cooperation in building gas and oil pipelines. These include the Iran-Pakistan-India gas pipeline; the Turkmenistan-Afghanistan-Pakistan gas pipeline; an oil, gas, and electricity corridor from Gwadar to Western China, the import of 1,000 MW electricity from Ragun hydro station in Tajikistan for which an agreement was signed in March 1992 at the rate of 3.3 cents per unit.

The worldwide electricity production, as per the World Bank, is as follows; coal: 40 percent; gas 19 percent; nuclear 16 percent; hydro 16 percent; oil seven percent. Pakistan’s power production is gas 48 percent; hydro 33 percent; oil 16 percent; nuclear two percent, and coal 0.2 percent. There has been a global trend to shift away from oil because of its rising price expected to reach $100 a barrel by the end of this year depending on the international geopolitical situation.

Despite the lowest cost of hydroelectric power, there have been environmental, ecological, and geopolitical concerns over the building of large dams. The supply of natural gas in Pakistan has been depleting over the years, and the country is now looking at the option of imponing gas from Qatar and Central Asia. This leaves the possibility of exploring nuclear, coal, and other alternative energy sources.

Nuclear energy and coal form the lowest source of power production in Pakistan. On the other hand, the world average for nuclear energy is 16 percent and for coal 40 percent. Let us first consider these two potential sources of electric power production for Pakistan. The US obtains 20 percent of its electric power from; clear. energy with 104 reactors; France 78 percent with 59 reactors, Japan 24 percent with 54 re~tors, the UK 23 percent with 31 reactors, and so on. Even India has signed a civilian nuclear cooperation agreement with the United States to develop its nuclear capability for power generation and economic development . It has currently six reactors in operation with a capacity of 3750 MW, and another six with a capacity of 3,340 MW are under construction.

The new agreement will further boost the nuclear power generating capacity of India. Today, nuclear power plants have average capacities of 600-1,000 MW. Pakistan only produces two percent of its power through two reactors (Karachi and Chashrna at 137 MW and 300 MW respectively). Pakistan is a nuclear technologically advanced country with capabilities to produce fuel, yet falls behind most other countries, including India, in terms of nuclear power production. The US introduces 51 percent of its power using coal, Poland 96 percent, South Africa 94 percent, India 68 percent, Australia 77 percent, China 79 percent, Israel 77 percent, UK 35 percent, Japan 28 percent, while Pakistan produces only 0.2 percent of its power through coal.

In Pakistan, smaller windmills are now visible, such as the ones at Gharo, where SZABIST set up an experimental research station many years ago. The Sindh government has recently announced plans to build a 50 MW wind farm in the vicinity of the coastal region at Gharo. Solar power (photovoltaic or thermal) is another alternative energy source option that is generally considered feasible for tropical and equatorial countries. Even though the accepted standard is 1,000 W/m2 of peak power at sea level, an average solar panel (or photovoltaic – PV – panel), delivers an average of only 19- 56W/m2. Solar plants are generally used in cases where smaller amounts of power are required at remote locations. PV is also the most expensive of all options making it less attractive.

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Issue Brief on “Pakistan’s Energy Crisis: The Need for a Transition to Alternate Energy”

Like many other developing countries, Pakistan has been grappling with a severe energy crisis for several years. The demand for energy continues to surge due to population growth, urbanization, and industrialization, while the supply of conventional energy sources remains inadequate. This energy deficit has led to frequent power outages, hampering economic growth, disrupting daily life, and impeding technological progress. In this context, the adoption of alternative energy sources presents a compelling solution to address Pakistan’s energy crisis. [1] Pakistan’s energy crisis is a long-standing and multifaceted issue that has significantly impeded the country’s economic growth and development. Pakistan witnessed acute energy crisis during the summer months from May-August 2023. The electricity shortfall widened to 7,000 megawatts with demand rising to 28,200 megawatts, while the power supply was 21,200 megawatts. [2]

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What’s at Stake in Pakistan’s Power Crisis

By Noah Berman

February 6, 2023 3:00 pm (EST)

Worsening blackouts are the latest manifestation of Pakistan’s economic distress. A brewing debt crisis could plunge the country into financial chaos.

A wave of darkness engulfed Pakistan on January 24 as its aging power grid strained to meet the country's demand for electricity. The massive outage was the latest in a series of blackouts that have become a chronic symptom of Pakistan’s ailing and climate-vulnerable economy, under duress from devastating natural disasters, a colossal debt load, and the mounting risk of sovereign default. With Islamabad rushing to negotiate a bailout from the International Monetary Fund (IMF), experts fear the response will not be enough to avoid a crisis.

What caused the January power outages?

Local officials blamed a surge in voltage at a power station in Sindh Province that cascaded throughout the country, bringing down the grid and leaving more than two hundred million people without power for nearly a day. 

Such blackouts are becoming increasingly common. Analysts say the electricity grid, established prior to Pakistan’s 1947 independence and largely constructed in the 1960s, is suffering from a dangerous lack of maintenance and investment. Pakistan is also running low on the imported fossil fuels that power the grid, with prices skyrocketing since the Russian invasion of Ukraine began.

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“Given how rickety and dilapidated the electricity grid is, and the associated infrastructure, it doesn’t take all that much to deliver a catastrophic shock to the system,” says Michael Kugelman, a South Asia expert at the Wilson Center.

What’s at stake if the power outages continue?

Pakistan’s electricity woes have added to the country’s precarious financial dilemma, with the blackout inflicting an estimated $70 million loss to the country’s textile industry, its largest export sector by a wide margin. Meanwhile, Islamabad’s total national debt had soared to over $200 billion [PDF] by late 2022, amounting to roughly 90 percent of its gross domestic product (GDP), according to state bank statistics. A series of compounding factors have shaken Pakistan’s economy: double-digit inflation has made everyday goods such as food and fuel more expensive, and interest rate hikes by the U.S. Federal Reserve and other central banks have resulted in rapid devaluation of Pakistan’s currency, the rupee. Meanwhile, an estimated $40 billion in damage caused by last year’s catastrophic flooding , a budget deficit worsened by large government subsidies, and an unforgiving debt load have brought the country to the precipice of default. 

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Last week’s blackout aggravated this economic adversity. Extended power outages could also affect Pakistan’s agriculture industry and force the country to import more food, a troubling prospect given that the prices of staples such as grain and vegetable oil have soared in the past year. Though Pakistan has been a net importer of food for much of the past three decades , its reliance on food imports surged last summer, when floods destroyed millions of hectares of farmland.

“If these power outages and these broader electricity problems continue over time, you’re going to see major deleterious implications for the economy, both right away and further down the road,” Kugelman says.

What do Pakistan’s struggles mean for other countries?

An economic crisis in Pakistan could have implications for Islamabad’s close relationships with Washington and Beijing. Meanwhile, its growing climate disruptions could ring alarm bells for other vulnerable countries. 

Beijing has invested over $60 billion in the country via its Belt and Road Initiative (BRI), through both debt and equity financing; Pakistan has borrowed $30 billion from Chinese lenders. While China has already reduced its lending to Pakistan, analysts say a sustained crisis could make Beijing wary of investing more money in the country. And default in another BRI country—Sri Lanka and Ghana both defaulted in 2022—could resurface other lenders’ concerns about China’s notorious reluctance to take losses on its loans. Pakistan borrowed more from China than Sri Lanka or Ghana did, so another round of contentious debt negotiations could raise questions about Beijing’s leverage over countries that owe it money. A default could also give pause to other countries considering Chinese investment. 

“Chinese state banks have been acting like most commercial creditors—they seem determined to get their money back with interest as quickly as possible,” says CFR’s Brad Setser.

The United States has sought to bolster Pakistan as a stable partner in a region stricken by terrorism and violence, providing tens of billions of dollars in military aid and other assistance over the past two decades. With Pakistan and other climate-vulnerable countries suffering increasingly severe economic consequences from climate change, many experts say what’s needed now is aid tied to climate adaptation. However, some of them argue that the $200 million Washington has provided to Islamabad since summer 2022 barely registers in terms of Pakistan’s need. That paucity of aid could portend lackluster financial support from wealthy nations for climate adaptation policies in other low-income and climate-vulnerable countries.

Will an IMF bailout stave off an economic crisis?

Pakistan hopes to forestall default by unlocking a paused $1.1 billion disbursement from the International Monetary Fund, the world’s controversial financial firefighter . Islamabad has implemented a series of reforms aimed at complying with the lender’s conditions, including hiking fuel prices and instituting a market-based exchange rate for the rupee. The funding is part of a $7 billion bailout that Pakistan and the IMF agreed to in 2019, their fifth such deal in the past two decades.

What would be coming from the IMF would be a drop in the bucket.

IMF conditions have often proved unpopular in Pakistan, and Prime Minister Imran Khan imposed subsidies that derailed the country’s IMF program before he was ousted from office last year. With the rupee falling to an all time low, imports, especially fuel, have become much more expensive, and officials worry about how the country’s forty-six million poor people will survive the spike in prices.

But even Khan has now said the country has “no choice” but to negotiate with the IMF. To stay afloat, Pakistan has drained its foreign reserves: as of early February, the country’s remaining $3.7 billion in central bank reserves were enough for only three weeks of imports. Meanwhile, double-digit inflation has made looming debt payments increasingly out of reach.

Even so, some analysts say that the proposed bailout would be little more than a band-aid solution given the country’s massive debt burden and debilitating underinvestment in electricity and other infrastructure.

“If you’re looking at the scale of the financial needs within the electricity sector, and the broader energy sector, what would be coming from the IMF would be a drop in the bucket in terms of what’s needed more broadly,” Kugelman says.

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Energy Crisis in Pakistan Essay: A Looming Challenge

• October 18, 2023

Energy plays a fundamental role in any nation’s progress, and Pakistan is no exception. In recent decades, Pakistan has been grappling with a severe energy crisis that has had far-reaching consequences on its economy, society, and environment. This essay delves into the intricacies of the energy crisis in Pakistan, its root causes, and the profound impact it has on the nation. Moreover, it outlines potential solutions, examines case studies from around the world, and sheds light on the challenges that impede progress. By the end, we aim to provide a comprehensive understanding of the energy crisis in Pakistan and the steps needed to address it.

Causes of the Energy Crisis

Impact on the economy, society, and environment, the role of different energy sources, government policies and initiatives, effects on industries and manufacturing, impact on household and agriculture, unemployment and economic instability, energy affordability and access for the poor, air pollution and greenhouse gas emissions, water usage and contamination, ecological impact of energy projects, potential for renewable energy development, researched and statical data, improving energy efficiency and conservation, diversifying the energy mix, enhancing the energy infrastructure, reducing transmission and distribution losses, encouraging private sector involvement, promoting renewable energy sources, policy reforms and regulatory changes, examining successful energy initiatives in other countries, political challenges, economic constraints, technological limitations, public awareness and participation, anticipated improvements in pakistan’s energy sector, the role of innovation and technology, long-term energy sustainability goals, historical perspective on pakistan’s energy situation.

To comprehend the current energy crisis in Pakistan, it’s essential to trace its historical evolution. Over the years, Pakistan has faced a growing demand for energy, driven by its burgeoning population and industrialization. Initially, the country had a relatively stable energy sector. However, several factors contributed to the eventual crisis.

The energy crisis in Pakistan can be attributed to a multitude of factors:

• Insufficient Energy Production : One of the primary causes is the inability to generate an adequate amount of energy to meet the increasing demand. This stems from a lack of investment in the energy sector and outdated power generation facilities.
• Transmission and Distribution Losses : A significant portion of the energy generated is lost due to inefficient transmission and distribution systems. This not only exacerbates the crisis but also strains the economy.
• Dependence on Non-Renewable Energy Sources : Pakistan heavily relies on non-renewable energy sources, primarily fossil fuels, such as coal, natural gas, and oil. The dependence on these finite resources makes the energy sector vulnerable to price fluctuations and supply disruptions.
• Economic and Political Factors : Economic challenges, including circular debt in the energy sector, have impeded progress. Political factors, such as policy inconsistency and governance issues, have also played a detrimental role.

The energy crisis has far-reaching consequences:

• Economic Impact : Frequent power outages disrupt industrial operations and lead to financial losses. This hampers economic growth, foreign investment, and job creation.
• Social Implications : Households and agricultural activities suffer due to power cuts, impacting the quality of life. Access to reliable energy becomes a privilege, rather than a basic necessity.
• Environmental Consequences : Overreliance on fossil fuels results in air pollution and greenhouse gas emissions. Furthermore, energy projects often have adverse ecological effects.

The energy crisis in Pakistan is a complex issue with multifaceted causes and consequences. Addressing it requires a comprehensive understanding of the nation’s energy landscape.

Energy Demand and Supply Gap

As of the present day, Pakistan continues to grapple with a significant energy demand and supply gap. The rapidly growing population and increasing industrialization have driven up the need for electricity and other forms of energy. Unfortunately, the country’s energy production has not kept pace with this rising demand.

To understand the current energy scenario, it’s essential to examine the role of various energy sources:

• Fossil Fuels : Pakistan predominantly relies on fossil fuels for its energy needs. Coal, natural gas, and oil power a significant portion of the country’s energy grid. However, this dependence on non-renewable sources makes Pakistan vulnerable to international price fluctuations and supply disruptions.
• Renewable Energy : Although Pakistan has made strides in harnessing renewable energy sources such as hydro, wind, and solar power, their contribution to the overall energy mix remains relatively small. Embracing renewable energy is pivotal to achieving a more sustainable and diversified energy landscape.

The Pakistani government has taken several steps to address the energy crisis:

• Power Generation Projects : Various power generation projects have been initiated to increase the capacity and reduce the demand-supply gap. Investments in modern and efficient power plants have been made.
• Energy Conservation Measures : Efforts to promote energy conservation and efficiency include encouraging the use of energy-efficient appliances, improving building codes, and implementing energy-saving practices in industries.
• International Collaborations : Pakistan has sought international assistance and collaborations to bolster its energy sector. Agreements with other countries for the construction of power plants and infrastructure development have been established.

Despite these initiatives, the energy crisis persists, and comprehensive measures are required to bridge the gap between demand and supply.

Socioeconomic Consequences

we will explore the socioeconomic consequences of the energy crisis in Pakistan and its environmental implications, shedding light on the multifaceted nature of the problem and its pervasive impact on society and nature.

The energy crisis in Pakistan has taken a heavy toll on the industrial and manufacturing sectors. Power outages disrupt production processes, leading to financial losses and hampering economic growth. Industries struggle to meet deadlines, which can deter foreign investment and hinder the creation of new job opportunities. As a result, the lack of reliable energy has become a significant roadblock to industrial development and economic stability.

For the average citizen in Pakistan, the energy crisis translates into daily inconveniences. Frequent power cuts disrupt daily life, affecting everything from household chores to education and entertainment. In rural areas, where agriculture is a vital source of livelihood, irregular access to electricity impedes irrigation and the use of modern farming equipment. Crop yields are affected, leading to food security concerns.

The energy crisis also has repercussions on employment. Reduced industrial output and limited job opportunities in the manufacturing sector have contributed to unemployment. Moreover, the economic instability resulting from the crisis discourages investment and business growth, further exacerbating the unemployment issue.

Energy affordability is a critical concern. As energy costs rise due to the energy crisis, the poorest segments of the population struggle to meet their basic energy needs. Access to electricity and clean cooking fuels remains a challenge for many, perpetuating poverty and inequality.

The socioeconomic consequences of the energy crisis in Pakistan are profound and multifaceted, affecting individuals, industries, and the nation’s overall economic stability.

Environmental Implications

In the following we will delve into the environmental implications, including air pollution, water usage, and ecological impact, which are an integral part of this crisis.

One of the most pressing concerns related to Pakistan’s energy crisis is the environmental impact. The heavy reliance on fossil fuels, especially in the power generation sector, leads to significant air pollution. Emissions of particulate matter, sulfur dioxide, and nitrogen oxides from these sources contribute to poor air quality in many urban areas.

The emission of greenhouse gases, such as carbon dioxide, from the burning of fossil fuels exacerbates global climate change. Pakistan, like the rest of the world, is experiencing the consequences of a changing climate, including more frequent and severe weather events.

Energy production in Pakistan often involves water-intensive processes. Hydroelectric power generation, for example, relies on water reservoirs, which can impact local ecosystems and water availability. Additionally, the extraction and processing of fossil fuels can contaminate water sources, posing risks to both the environment and public health.

Large-scale energy projects, whether they involve the construction of dams for hydroelectric power or coal-fired power plants, often have direct ecological consequences. Dams can alter river ecosystems and impact aquatic life, while coal mining and power plants can lead to deforestation, habitat destruction, and long-term environmental degradation.

Transitioning to renewable energy sources offers a path to mitigate many of these environmental concerns. Solar, wind, and hydroelectric power have a significantly lower environmental footprint compared to fossil fuels. Embracing these sustainable alternatives can reduce air pollution, water usage, and ecological impact while also contributing to a more sustainable energy future.

Pakistan has been facing an energy crisis for over a decade, which has had a significant impact on the country’s economy and people’s livelihoods [4] . Here are some researched and statistical data related to the Pakistan energy crisis:

• Pakistan started to face severe electricity shortages in 2006, which have worsened over time [1].
• Pakistan’s electricity shortfall is currently around 5,000 megawatts (MW) per day, and the gas shortfall is 2 billion cubic feet per day [5] .
• The energy crisis has been a major drag on the economy, with an estimated cost of 10% of the GDP over the past 5 years [4].
• The energy shortages are estimated to cost around 2% of GDP annually [5].
• The electricity demand in Pakistan has been increasing rapidly, and the country does not produce enough energy to meet demand [3].
• The renewable energy sector in Pakistan has been growing, and it has been suggested as a remedy for the energy crisis [1].
• Pakistan has a significant potential for renewable energy, including solar, wind, and hydropower [4].
• The government of Pakistan has been pursuing short-, medium-, and long-term solutions to address the energy crisis [3].
• The energy crisis in Pakistan has been a possible source of regional conflict [3].
• https://www.mdpi.com/1996-1073/11/9/2424
• https://www.iea.org/countries/pakistan
• https://www.usip.org/sites/default/files/PW79_Pakistans_Energy_Crisis.pdf
• https://www.mdpi.com/1996-1073/16/1/423
• https://www.usip.org/sites/default/files/SR375-Pakistans-Power-Crisis-The-Way-Forward.pdf

[1] https://www.mdpi.com/1996-1073/11/9/2424 [2] https://www.iea.org/countries/pakistan [3] https://www.usip.org/sites/default/files/PW79_Pakistans_Energy_Crisis.pdf [4] https://www.mdpi.com/1996-1073/16/1/423 [5] https://www.usip.org/sites/default/files/SR375-Pakistans-Power-Crisis-The-Way-Forward.pdf [6] https://www.sciencedirect.com/science/article/pii/S2211467X2200013X

Solutions and Recommendations

In the following, we will explore potential solutions to the energy crisis in Pakistan, including strategies to improve energy efficiency, diversify the energy mix, enhance infrastructure, and promote renewable energy sources. Addressing these environmental concerns is an integral part of any comprehensive solution to the crisis.

Efforts to improve energy efficiency and conservation are pivotal in addressing the energy crisis. This includes:

• Promoting Energy-Efficient Technologies : Encouraging the use of energy-efficient appliances, industrial processes, and building designs can significantly reduce energy consumption.
• Energy Audits and Management : Conducting energy audits and implementing effective energy management systems in industries and institutions can identify areas of waste and inefficiency.

To reduce Pakistan’s vulnerability to fossil fuel price fluctuations and supply disruptions, diversification of the energy mix is essential. This involves:

• Expanding Renewable Energy : Scaling up the use of renewable energy sources like solar, wind, and hydropower can provide a more stable and sustainable energy supply.
• Nuclear Energy : Exploring the potential for nuclear energy can provide a reliable source of power, though this comes with its own set of challenges, including safety and waste management.

Investing in infrastructure improvements is crucial for ensuring a reliable energy supply. This includes:

• Upgrading Transmission and Distribution Systems : Reducing losses in the transmission and distribution of electricity can help bridge the demand-supply gap.
• Grid Modernization : Implementing a modern smart grid system can improve energy distribution and reduce waste.

A significant portion of the energy crisis is due to losses in the transmission and distribution of electricity. Measures to address this issue include:

• Technical Upgrades : Modernizing and upgrading the existing infrastructure to minimize losses.
• Loss Monitoring and Management : Implementing systems to continuously monitor and manage losses to prevent theft and inefficiencies.

The private sector can play a crucial role in addressing the energy crisis. The government should create an enabling environment for private investment by offering incentives and removing regulatory barriers.

Government policies should encourage and support the growth of renewable energy:

• Incentives : Providing financial incentives, such as tax breaks and subsidies, to entities investing in renewable energy projects.
• Net Metering : Implementing net metering policies to allow individuals and businesses to feed excess renewable energy back into the grid.

Addressing the energy crisis in Pakistan requires significant policy reforms:

• Energy Pricing : Rationalizing energy prices to reflect true costs can reduce inefficiency and wastage.
• Policy Consistency : Ensuring consistency in energy policies to attract investment and promote long-term planning.

Case Studies

In the following, we will explore international case studies to draw valuable lessons from successful energy initiatives around the world. These lessons can provide valuable insights for Pakistan as it works towards addressing its energy crisis.

To address the energy crisis in Pakistan, it’s valuable to draw insights from successful energy initiatives in other nations. Several countries have effectively managed their energy challenges and can serve as models for Pakistan’s energy reform efforts.

• Germany’s Energiewende : Germany’s transition to renewable energy, known as “Energiewende,” has shown that a commitment to renewables and energy efficiency can reduce carbon emissions and create a sustainable energy future.
• China’s Renewable Energy Expansion : China’s aggressive investment in renewable energy, particularly in solar and wind, demonstrates the potential for rapid growth in these sectors.
• Norway’s Hydroelectric Power : Norway’s extensive use of hydroelectric power provides a model for effective utilization of renewable energy sources, which Pakistan can also tap into given its geographical features.
• South Korea’s Nuclear Energy : South Korea’s experience in developing and managing nuclear power can offer insights into safe and efficient nuclear energy utilization.

By studying these case studies and adopting successful strategies, Pakistan can chart a more sustainable and resilient energy future.

Challenges and Barriers

In this we will delve into the challenges and barriers that impede Pakistan’s progress in addressing the energy crisis. Understanding these challenges is crucial to developing effective solutions.

Political instability, lack of consensus on energy policies, and reluctance to implement necessary reforms can hinder progress. Addressing these issues requires strong leadership and bipartisan cooperation.

The economic challenges associated with circular debt, subsidies, and financial mismanagement in the energy sector are significant hurdles. Resolving these issues will require careful financial planning and structural reforms.

The outdated infrastructure and technology in the energy sector need substantial upgrades. Embracing modern technology and innovation is vital to enhancing efficiency and reducing losses.

Engaging the public in energy conservation and sustainable practices is essential. Public awareness campaigns and education can foster a culture of responsible energy use.

Future Outlook

In the final we will explore the future outlook for Pakistan’s energy sector, highlighting anticipated improvements, the role of innovation and technology, and long-term energy sustainability goals.

Despite the formidable challenges, there is room for optimism regarding Pakistan’s energy future. Several developments are expected to improve the energy landscape in the coming years:

• Investment : Increasing domestic and foreign investments in the energy sector, coupled with better financial management, can help alleviate economic constraints and spur infrastructure development.
• Policy Reforms : Ongoing policy reforms and consistency in energy policies can provide a conducive environment for the private sector and facilitate the transition to cleaner and more sustainable energy sources.
• Technological Advancements : The integration of advanced technologies, such as smart grids and energy storage solutions, can enhance the efficiency and reliability of energy distribution.
• International Support : Collaborations with other nations and international organizations can bring expertise, funding, and technical assistance to Pakistan’s energy projects.

Innovation and technology will play a pivotal role in shaping Pakistan’s energy sector:

• Renewable Energy Innovations : Advances in solar and wind energy technologies are making these sources more affordable and efficient, making them increasingly viable for Pakistan’s energy needs.
• Smart Grids and Energy Storage : Smart grid technology can improve the management and distribution of energy, while energy storage solutions can help mitigate supply challenges.
• Clean Energy Research : Ongoing research into cleaner and more efficient energy production methods can accelerate Pakistan’s transition towards a more sustainable energy mix.

Looking ahead, Pakistan must establish long-term sustainability goals for its energy sector:

• Reducing Emissions : Committing to lower greenhouse gas emissions through the increased use of renewables and more efficient energy generation methods.
• Energy Access for All : Ensuring universal access to reliable and affordable energy, particularly for the underprivileged, is a crucial long-term goal.
• Resource Diversification : A diversified energy mix that reduces reliance on fossil fuels and promotes renewables is pivotal for long-term sustainability.

The energy crisis in Pakistan is a complex challenge with profound implications. However, with a strategic approach that includes policy reforms, technological innovation, and international collaboration, Pakistan can transition towards a more sustainable, reliable, and efficient energy system that benefits its economy, society, and environment. It is imperative for the nation to work towards these goals to secure a brighter energy future for its citizens.

Welcome to the official author account of words.pk! I am a passionate writer and researcher who loves exploring the rich and diverse culture of Pakistan. Through my writing, I aim to showcase the beauty and complexity of this vibrant nation, from its history and traditions to its art, music, cuisine, and more. With years of experience in blogging, and content creation, I have honed my skills in storytelling and crafting compelling narratives that captivate readers

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E-Paper | August 25, 2024

Average daily gas

700mmcfd shortfall

Off-flexold rural villges

436.2 millionbb 2007 est

30,090 bbl/day  2007 est

• NATURAL GAS
• ALTERNATIVE ENERGY

The year started with the shut down of Uch power plant producing 585MW of electricity, as one of the pipelines providing fuel was blown up in the district of Jaffarabad. Pakistan faced one of its most crucial gas crises, with the shortfall rising up to 1.8 billion cubic feet (bcf). The year also experienced the worst CNG load shedding resulting in losses and problems for the consumers. However OGRA increased the gas tariff by 14 per cent in the beginning of the year which was one of the biggest tariff hikes in the history of Pakistan. Moreover, the energy shortfall reached up to 2,700 MW.

Sheikhan gas field, which is located in Kohat, Kyber Pakhtunkhwa, was discovered. Moreover, the torrential rainfall in the year resulted in floods which caused much damage to the existing infrastructure transmitting/transferring energy and fuel. Towards the end of the year, country’s first rental power plant (RPP), with the capacity of 232 MW was inaugurated in Karachi.  

NASHPA oil fields were discovered in Karak district of Kyber Pakhtunkhwa. In the same year, Karachi faced one of its most crucial power breakdowns on June 17 in which the entire city was without power for 21 hours and more.Moreover, the country faced a power shortfall of 4,500 MW in the same year with the domestic demand rising up to 11,000 MW. However only 6,500 MW of generated power was catering to the entire demand.  

The demand and supply gap pertaining to electricity in Pakistan increased by 15 per cent.The major load shedding crisis also commenced in the same year with power outages extending up to 16 hours a day in many cities of the country.  

Pakistan faced one of its biggest power failures after Bhutto’s assassination in which production fell by 6,000 MW.

Mela oil fields were discovered in the area of Kohat located in the province of Khyber Pakhtunkhwa.

International Sovereign Energy, a Canadian company, signed an MoU with Oil and Gas Development Company Limited. The memorandum entailed further development of Toot Oil Fields. Pakistan was hit by one of its most devastating earthquakes which resulted in a vast damage to the infrastructural capital responsible for transmitting/transferring fuel. In the December of 2005, Karachi electric Supply Company, one of the largest vertically integrated power supply company in Pakistan was privatised.

Chanda oil fields located in Khyber Pakhtunkhwa started oil production.

Balochistan Liberation Army allegedly bombed one of the minor pipelines transmitting gas from Sui gas fields.

The oil fields owned by Union Texas Pakistan were producing more oil than the Potwar wells.

Rajjan oil field, located in Gujjar Khan, was discovered.

Qadirpur gas field was discovered in the province of Sindh. It remains the third largest gas field in Pakistan.

Dakni gas field started commercial production in December 1989.

The year witnessed the peak in oil production from Toot Oilfields which was 2,400 barrels per day. Moreover, Chak Naurang field located 90 kms away from Islamabad was discovered in the June of 1986.

Tando Adam oil field, located in Hyderabad, was drilled and completed.

Dakni gas field, located about 135 Kms in the south-west of Islamabad, was discovered in 1983.

Union Texas Pakistan discovered an oil field in lower Sindh.

Dhodak gas field was discovered in the province of Punjab.

The commercial production from Toot Oilfields started in 1967.

The Toot Oilfields, located in the Potwar region of Punjab were found. During Ayub Khan’s regime Pakistan Petroleum and Pakistan Oilfields explored and drilled the first well. Toot Oilfields have an approximate capacity to produce 60 million barrels of oil.

Commercial drilling and exploring of Sui gas fields was started. Sui gas field contributes substantially to fulfil Pakistan’s fuel requirements and have a daily production of approximately 550 MMscf.Pakistan Petroleum Limited (PPL) discovered gas reserves at Uch gas field.

The first oil field in Pakistan was discovered in the province of Balochistan near a Sui gas field. During the same time period, Sui gas field, which remains the biggest natural gas field in Pakistan, was discovered.

Essay On Energy Crisis In Pakistan (200 & 500 words)

Essay on energy crisis in pakistan (200 words).

Pakistan faces a severe energy crisis due to a lack of resources, poor management, and an inefficient distribution system. The country is heavily dependent on imported oil, which has led to high costs and volatility in energy prices. This has resulted in frequent power outages and load shedding, devastatingly impacting the economy and people’s lives.

The energy crisis has significantly impacted Pakistan’s economy, particularly its manufacturing sector, which has been forced to shut down due to power shortages. As a result, unemployment has increased, and foreign investment has decreased. The energy crisis has also affected the agriculture sector, a major contributor to the country’s economy. Farmers have been unable to irrigate their crops, leading to lower yields and higher food prices.

Pakistan has significant potential for renewable energy sources, such as solar and wind power. However, the government has not invested enough in this area, and the country still relies heavily on fossil fuels. There is also a need for better energy sector management, including improved distribution systems and reduced transmission losses.

In conclusion, the energy crisis in Pakistan is a complex issue that requires a multi-faceted approach to address. The government must invest in renewable energy sources, improve management, and reduce transmission losses. It is essential to address this crisis to support economic growth, create employment opportunities, and improve the lives of Pakistanis.

Essay On Energy Crisis In Pakistan (500 words)

Like many other developing countries, Pakistan is grappling with an acute energy crisis that severely affects its economy, industry, and social development. The country has been facing severe energy shortages for the past decade, resulting in frequent power outages, load shedding, and rising energy costs. The energy crisis in Pakistan is a complex issue with multiple causes and requires a comprehensive strategy to address it.

The energy crisis in Pakistan can be traced back to the 1990s, when the country began to experience a growing demand for energy due to rapid population growth, urbanization, and industrialization. At the same time, there was a lack of investment in the energy sector, resulting in an inadequate supply of electricity, gas, and oil. The government’s failure to address the issue promptly and effectively has exacerbated the situation.

One of the leading causes of the energy crisis in Pakistan is the over-reliance on non-renewable energy sources such as oil and gas. The country has limited domestic reserves of these resources and must rely on imports to meet its energy needs. This has led to a significant increase in energy costs and has made the economy vulnerable to global oil price fluctuations.

Another significant factor contributing to the energy crisis in Pakistan is the inefficient and outdated energy infrastructure. The country’s power generation and distribution system is outdated, and many of the power plants are running on obsolete technology. The transmission and distribution systems are outdated and suffer significant losses, resulting in low efficiency and frequent power outages.

Moreover, the lack of investment in renewable energy sources such as solar, wind, and hydro has exacerbated the energy crisis in Pakistan. The country has enormous potential for renewable energy, especially solar and wind, but there has been a lack of political will and investment in this area. The government must encourage private sector investment in renewable energy to diversify the country’s energy mix and reduce its dependence on non-renewable sources.

The energy crisis in Pakistan has had severe economic and social consequences. The frequent power outages and load shedding have had a detrimental impact on the country’s industry and businesses, resulting in lost productivity and economic growth. The rising energy costs have also made it challenging for businesses to operate profitably, resulting in job losses and economic instability. Moreover, the lack of access to electricity has severely impacted the country’s rural population, making it challenging to access healthcare, education, and other essential services.

To address the energy crisis in Pakistan, the government needs to adopt a comprehensive strategy that includes a mix of short-term and long-term measures. In the short term, the government must invest in upgrading the existing energy infrastructure, including power plants, transmission lines, and distribution systems. The government should also promote energy conservation and efficiency measures, such as incentivizing energy-efficient appliances and adopting renewable energy sources.

In the long term, the government must invest in renewable energy sources such as solar, wind, and hydro. The country has enormous potential for these sources and can significantly reduce its dependence on non-renewable sources. The government must encourage private sector investment in these areas and create a favorable regulatory environment to attract investment.

In conclusion, the energy crisis in Pakistan is a complex issue that requires a comprehensive strategy to address it. The government needs to take immediate steps to upgrade the energy infrastructure, promote energy conservation and efficiency measures, and encourage private sector investment in renewable energy sources. Failure to address the issue will have severe economic and social consequences for the country and its people.

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Sana Mursleen is a student studying English Literature at Lahore Garrison University (LGU). With her love for writing and humor, she writes essays for Top Study World. Sana is an avid reader and has a passion for history, politics, and social issues.

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Pakistan’s Power Crisis: A Perfect Storm of Policy Failures

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The pulse  |  economy  |  south asia.

Pakistan’s soaring electricity prices are the culmination of three decades of ill-conceived policies, corruption, and a lack of long-term planning.

Pakistan’s power sector is mired in a complex web of challenges, characterized by chronic underinvestment, inefficient power generation, and a dysfunctional distribution network. The sector’s history is marked by ill-conceived policies, corruption, and a lack of long-term planning. These factors have culminated in a crisis that has far-reaching implications for the economy, society, and environment.

The government’s attempts to address the crisis through a mix of policies, including increased power generation and subsidy-driven solar adoption, have yielded mixed results. While these measures have provided some relief, they have also exacerbated underlying issues such as circular debt and inefficiencies. The burden of these challenges has disproportionately fallen on consumers, with rising electricity costs eroding purchasing power and fueling social discontent.

Forecasts for GDP growth in Pakistan suggest only modest increases over the next few years. This implies that the anticipated rise in electricity demand will be gradual, rather than dramatic. 

The average cost of electricity in Pakistan stands at $0.23 per unit, a rate that has prompted many consumers, including industries and farmers, to shift toward solar energy . A significant number of farmers have adopted off-grid solar systems to power their water pumps, reducing their reliance on the national grid. This shift underscores the impact of high electricity rates on consumer behavior, as many seek more cost-effective and reliable alternatives.

Since 2021, electricity prices have surged by an astonishing 155 percent . This increase is largely attributed to the government’s strategy to raise industrial and retail electricity rates as part of securing loans from the International Monetary Fund (IMF). The IMF’s condition s included substantial tariff hikes and other economic reforms. With inflation hovering around 12 percent, the rising costs of electricity, fuel, and essential goods have placed additional strain on the purchasing power of the populace. In July, the government further increased residential electricity prices by 18 percent to meet IMF conditions, which also involved raising taxes and the costs of basic commodities.

A recent Bloomberg report revealed that electricity bills in Pakistan now surpass the cost of household rent for some Pakistanis. The financial strain on consumers is exacerbated by the loss of approximately 16 percent of electricity due to theft and transmission inefficiencies. These losses contribute to the circular debt crisis, a longstanding issue in the energy sector that continues to burden both consumers and the government.

The origins of Pakistan’s power sector crisis can be traced back to 1994, when the country, then with a population of 130 million (today, it’s approximately 250 million), sought to attract foreign investment to establish new power plants. This initiative was intended to address severe load-shedding, which was significantly impacting industrial productivity. 

The government at the time aimed to reduce public sector involvement in the economy through a policy known as “de-publicizing the economy.” This strategy involved transferring economic responsibilities from the public to the private sector, with the goal of stimulating private investment, improving efficiency, and creating jobs. In the electricity sector, this culminated in the introduction of Independent Power Producers (IPPs).

Before the introduction of the IPP policy in 1994, electricity production in Pakistan was managed entirely by public sector power plants. Many of these plants were outdated, inefficient, and prone to frequent breakdowns, leading to high fuel consumption and unreliable electricity supply. The policy shift toward private sector involvement was intended to address these issues by encouraging investment in new, more efficient power plants and reducing the burden on the public sector.

Political instability, coupled with sluggish economic growth, hampered investment in critical transmission infrastructure. Moreover, the escalating cost of imported fuels for fossil fuel-based power plants exacerbated the issue, leading to underutilized power plant capacity and increased costs for consumers. 

Consumers were compelled to subsidize idle power plants through capacity charges, despite not receiving the equivalent electricity. This anomalous situation underscores the systemic inefficiencies rooted in outdated contracts and mismanagement, placing an undue financial burden on consumers.

The burgeoning adoption of solar energy, while commendable, presents a new challenge to the power sector. As more consumers opt for solar power, the demand for grid-supplied electricity decreases, while the fixed costs associated with power generation and infrastructure remain relatively constant. This imbalance can lead to increased tariffs for remaining grid-connected consumers as the costs are spread over a smaller user base.

Pakistan’s power crisis is a complex issue with far-reaching consequences. Beyond economic implications like industrial decline, unemployment, and inflation, it has profound social impacts, including increased poverty and social unrest. Despite these pressing challenges, the government is making efforts to address energy demands and reduce greenhouse gas emissions. 

On August 16, Nawaz Sharif, presiding of the ruling Pakistan Muslim League-Nawaz (PMLN), announced a notable reduction in electricity costs for residents of Punjab. Specifically, a $0.05 per unit decrease was introduced for households consuming up to 200 units (equating to a 22 percent discount, based on the average per unit price for electricity). 

Additionally, a substantial $2.5 billion package was unveiled, aimed at providing free solar panels to eligible families in the province. This initiative reflects the government’s effort to mitigate the financial burden on consumers while promoting the use of renewable energy sources.

According to Pakistan’s Economic Survey 2023-24 , significant investments are being made in renewable energy to meet the goal of a 50 percent reduction in emissions by 2030. As of March 2024, Pakistan’s installed electricity capacity was 42,131 MW, with contributions from hydropower (25.4 percent), nuclear (8.4 percent), renewable (6.8 percent), and thermal (59.4 percent) sources. 

Although thermal power remains the largest source of electricity, its share has decreased, reflecting a positive trend toward cleaner energy sources. According to Pakistani government data , hydropower, nuclear, and renewable sources accounted for 54.1 percent of the total electricity actually generated in the fiscal year ending in March 2024, indicating progress in transitioning to more sustainable energy.

The government’s commitment to renewable energy is evident in its target of a 50 percent emissions reduction by 2030, as outlined in the Economic Survey 2023-24. However, significant investments and policy reforms are still required to fully harness the potential of clean energy and address the persistent issues plaguing the power sector

The power crisis in Pakistan has intensified broader societal and political issues, creating a persistent cycle of instability. Addressing this crisis requires a multifaceted strategy that tackles both supply and demand challenges. While the emphasis on increasing renewable energy is a positive development, achieving a sustainable energy future necessitates a comprehensive approach.

To effectively address these challenges and foster economic growth, Pakistan must adopt a holistic strategy that integrates energy efficiency, grid enhancements, and a strong renewable energy sector. Additionally, resolving circular debt issues and strengthening governance within the power sector are crucial. 

A stable and efficient energy sector is essential for sustainability and for stimulating GDP growth, which, in turn, ensures the nation’s capacity to afford and manage higher electricity costs. High GDP growth will provide the financial means to meet the challenges posed by capacity charges and support the overall stability of the energy sector.

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Dealing With the Energy Crisis

Pakistan’s acute energy crisis has affected each segment of society. In summer season frequent power outages crippled the lives of people when the gap between demand and supply was constantly increasing and shortfall reached between 6000 to 8000 megawatts. In winter season, the situation has even become the worst due to shortage of gas.

Natural gas meets 49 percent of total energy requirements in Pakistan. Due to relatively lower price of natural gas, and indiscriminate promotion of use of compressed natural gas (CNG) for transport sector, the consumption of gas has substantially increased. Pakistan consumes all the indigenously produced gas, the Sui gas field in Balochistan is the biggest natural gas field in Pakistan, while the pace of developing new gas fields is slow.  The increasing demand for gas by domestic sector, transport sector and for power generation has created demand-supply gap that has eventually led to massive cuts in gas supply to industry, power sector, and CNG stations but the domestic users are the worst sufferers.

Energy crisis has been a major contributing factor for slowed economic growth rate by negatively impacting Pakistan’s already meager economy. Pakistan though, having potential to meet its energy needs in general and to enhance power generation capacity in particular has remained unable to utilize its indigenous resources to overcome the energy crisis. Apart from internal political differences among federating units for the development of indigenous resources particularly hydro power projects, there are many other hurdles, naming a few,  as lack of foreign investment and financial sponsors, precarious security situation and weak economy that have hampered progress in energy sector.

The energy crisis has not emerged overnight; the increased urbanization in a couple of decades was indicating a huge gap in demand and supply. Apart from technical and political reasons our decision making structure is equally responsible for energy crisis. One of the major hindrances in achieving energy prosperity has been the lack of coherent energy policy. Energy issues have been dealt with on temporary basis while adopting a project oriented approach rather than goal oriented approach. The best examples are Independent Power Procedures (IPPs) of 1990s and Rental Power Plants (RPPs) of previous government. The IPPs enhanced power generation capacity by more than 5,000 MW, but costly furnace oil burdened the people and created price hype, as far RPPs are concerned, due to lack of transparency these only resulted in wastage of public money and gave rise the controversies. Though, unable to utilize indigenous resources, it is imperative to explore viable regional resources to meet the haunting energy challenge.

Pakistan has been cooperating with Turkey and China in the energy field. Pakistan and China have decades old collaboration in the field of renewable energy especially in developing hydro power projects in Pakistan. They hold regular meetings of Pakistan-China Joint Energy Working Group to decide the future course. These initiatives are useful but given Pakistan’s dependence on natural gas and the shortage of indigenously produced gas, Pakistan has been negotiating with the states to import natural gas to meet the increasing demands. In this regard, TAPI and IP are two proposed pipeline projects.

The TAPI (Turkmenistan-Afghanistan-Pakistan-India) is gas pipeline project that government has considered seriously but given the  complexity of issues involved in the actualization of the project the future of TAPI does not seem promising. The precarious security situation in Afghanistan and uncertain post 2014 withdrawal scenario pose questions about the ability of Afghan security forces to guarantee the security of pipeline. Apart from security considerations, India-Pakistan rivalry may have negative impact on the pipeline project as it has been the case in Iran-Pakistan-India (IPI) pipeline project. These factors make TAPI less attractive option in the near future.

While much debated Iran-Pakistan gas pipeline project since its inception has been mired in controversies. Starting with the Indian refusal to join the project, the uncertainty regarding applicability of US sanctions on the pipeline project, Pakistan’s concerns over price of gas and political transitions in both states have stalled the project so far. The IP project if materialize, presents immense opportunities, in addition to meeting Pakistan’s energy needs it has the potential to transform the geopolitical landscape of South, West and Central Asia by developing the networks of regional connectivity.

Pakistan needs to develop indigenous resources on medium and long term basis but these gas pipeline projects can be adopted as short term solutions to the energy problems as these would considerably contribute to Pakistan’s energy mix and help sustaining the economic growth hampered by energy shortage.

The article was carried by Daily Times on January 17, 2013.  The views expressed belong to the author and do not reflect the policy of the institute.

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Pakistan’s energy crisis fuels a solar boom

Anyone running a protection racket knows the rule: Squeeze your marks too hard, and they’ll end up breaking. That’s what appears to be happening in Pakistan right now.

For years, the country has been rolling from electricity crisis to electricity crisis. A decade ago, failure to foresee the precipitous decline of domestic gas fields caused widespread power cuts. From 2013, the government of former Prime Minister Nawaz Sharif built a fleet of Chinese-financed coal plants to fix the problem. The cost of all that, plus the imported coal and liquefied natural gas to fuel all those fossil turbines, helped send the rupee tumbling and forced a round of bailouts from the International Monetary Fund.

Over the past year, the government of Shehbaz Sharif -- Nawaz’s brother -- has been jacking up power prices in an attempt to mend the yawning budget hole. That’s added further pain to a struggling population. With tariffs rising 155 per cent since 2021, many households are now spending more on their electricity bills than rent, Bloomberg News reported recently.

Protests against the price rises last month halted a major road into the capital. On Sunday, Maryam Sharif -- Nawaz’s daughter and chief minister of Punjab province, home to half of Pakistan’s population -- announced a Rs45 billion ($162 million) subsidy program to soften the sticker shock.

What all politicians have failed to do is give Pakistan the affordable and clean electricity system that its 240 million people need if they’re ever to close the widening economic gap with other emerging economies. Faced with extortionate costs for a barely functioning power grid, households and businesses have started to opt out. Clean power has been the main beneficiary.

A recent study by BloombergNEF analyst Jenny Chase illustrates the extraordinary scale of this off-the-books boom. Last year, $1.45 billion in solar panels were exported from China to Pakistan. That’s enough to buy about 6 gigawatts of modules, sufficient to provide about 7.0 per cent of Pakistan’s electricity. Roughly the same amount was imported in the first six months of this year alone. With the drop in cell prices over the past year, that now represents something closer to 13 GW.

Separate evidence from machine-learning processing of satellite imagery suggests huge amounts of panels are going undetected. The area of arrays visible from space is equivalent to a minimum of between 1.4 GW and 2.8 GW, BloombergNEF found. Much appears to be built on the rooftops of factories, for industries to consume themselves. Chase estimates that a total 12.7 GW was installed by the end of last year and a further 10 GW to 15 GW will be added in 2024, making Pakistan the world’s sixth-largest solar market.

The official numbers couldn’t be more different. The country’s electricity regulator lists just 0.6 GW of solar in the entire country, and its base case long-term plan is for a cumulative total of just 5.5 GW in 2034. Even its most bullish ‘high demand’ scenario only lifts that estimate to 15.6 GW, 10 years from now -- a level the country has already likely blown past, on BloombergNEF’s estimates.

From a certain angle, this looks like a success story. Faced with a corrupt, incompetent and authoritarian government forcing them to pay over the odds for dirty, unstable fossil power, households and businesses are voting with their feet for a cleaner alternative. We’ve already seen in South Africa how quickly this dynamic can steady a collapsing electricity grid. Itwould be far better, however, if people weren’t being driven to such measures. Pakistan’s electricity system is underfunded as it is. The more that major consumers quit it to generate their own power, the more the remaining costs are forced onto those unable to do so -- mostly poor households without the roof space for panels. That will only amplify the vicious circle of rising prices, falling reliability, and unpaid bills.

Starved of capital, the grid won’t be able to invest in the transmission networks or clean generation that it needs to function properly. That will leave Pakistan ever more dependent on imported fossil fuels that undermine the currency in the short term, and in the long term expose its population to rising temperatures and choking pollution. It’s a tragic waste for a country whose rich endowment of hydroelectricity and sunny, windy deserts should allow it to be a powerhouse of clean energy.

The government, whose electricity plans currently see barely any role for solar and wind in its power mix, would be far better to remove fossil fuels. Providing a voracious market for China’s surplus solar panels might also help placate Beijing, a key ally whose $15 billion in loans to build Pakistan’s costly, underperforming fleet of coal generators may never be fully repaid.

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