Energy undoubtedly is lifeblood to modern society. The amount of energy required to produce a unit of gross domestic product (GDP) can be contested, but what can’t be contested is that access to some minimum affordable, reliable, and sustainable energy is inevitable for any country to power its economy and provide a decent living to its people. Energy sector is however at the core of environmental pollution and climate change. This leads to the trilemma (frequently also termed the “3E” issue): finding affordable and reliable energy supplies to fuel the economy without damaging the environment.
Electricity, which is a derived form of energy (meaning that it’s produced by converting other primary resources), is considered a superior energy carrier for the versatility of services for which it can be used, and also for its ease of control and cleanliness. As societies develop and their incomes rise, they switch from other forms of energy to electricity, frequently also called moving from a lower rung to a higher rung on the “energy ladder“.
Electricity is lately emerging as the choice energy carrier of most nations around the world because if it’s derived from renewable resources and uses cleaner conversion technologies, it can enable the world to phase out its heavy reliance on fossil fuels, preserve its environment, and serve its energy needs sustainably.
Let’s have a quick look at where Pakistan stands with respect to energy and economic development.
Pakistan’s per capita annual energy consumption of 14 gigajoules in 2023 (roughly 0.334 tonnes of oil equivalent, “toe”) was only 18% of the world average, 11% of the European Union average, 12% that of China, and 51% that of India (Energy Institute 2024). Pakistan’s per capita annual electricity consumption of 670 kWh in 2023 was only 18% of the world average, 11% that of the European Union average, and 12% that of China, and 49% that of India (World Bank’s WDIs).
Pakistan’s per capita annual GDP of 1,365 US$ in 2023 was only 10% of the world average, 5% that of European Union average, 16% that of China, and 81% that of India (The World Bank’s WDIs). Only 70 to 75% of its population at present has access to electricity meaning that 60 to 70 million people in Pakistan are still without this basic service (NEPRA 2024, p11). This however masks the fact that a majority of those connected with the grid consume only a fraction of the electricity supply.
The above statistics make it evident that Pakistan currently faces abject poverty, both in terms of socio-economic development and energy availability. Energy poverty (lack of access or unaffordable prices) may not be the sole cause of Pakistan’s economic poverty, but it’s certainly among the key factors. No effort to alleviate economic poverty in the country will succeed without alleviating its energy poverty.
Energy poverty is problematic for several reasons. The most critical is its “affordability” for common citizens. When prices of commercial fuels and electricity rise beyond a few percent of the household income, they start to have a punishing effect on the lives of families as they are compelled to cut corners on their other basic needs like food, health, and education.
According to recent reports, more than 50% of Pakistan’s population does not have access to cleaner fuels or access to more-efficient cooking stoves. The risk of death by exposure to air pollution (both indoor and outdoor) was the second biggest after high blood pressure.
Such price hikes also affect the competitiveness of industrial, agricultural, and commercial consumers leading to their losing market share in local as well as international markets and in extreme cases even driving some of them out of business.
Energy price hikes, along with price hikes of other commodities, also feed to numerous other social evils. The sad incident off the Greek coast in which over 350 people from Pakistan alone lost their lives in their effort to migrate to rich European countries had hardly faded from our memories when the nation received reports of two similar incidents recently. Reports of a whopping 2.75 million Pakistani youth’s migration in the past five years seeking better career and life abroad is also telling.
Pakistan must find a way to pull out of its present energy poverty, in fact, energy penury. This is essential for materializing its hope of economic development, social wellbeing of its citizens, and protecting its environment. Energy poverty however is a complex and multi-faceted issue. It involves a host of other sub-issues like low incomes, high prices, lack of access, and in-efficient building practices and technologies. This makes its alleviation very difficult in the short run and require a mix of policies that are collectively comprehensive, complementary, and synergistic.
Most analysts now tend to agree that the primary cause of Pakistan’s energy poverty is its over-reliance on the energy supply system that is largely based on imported technologies and fuels. This approach has failed to deliver its objectives and has led to energy supplies that are prohibitively expensive, inequitable, and unsustainable.
The government’s present approach to phase out fossil fuels, add renewable power generation, and increase hydro and nuclear power generation may bring some symptomatic relief to a sector currently under financial siege but will not cure it. Both options are capital-intensive, have long lead times (8 to 10 years or even more), and have several unresolved issues associated with them.
The more recent infatuation of our leaders with renewable power generation (both solar and wind) may be short-lived too once the reality sets in. They will have to grapple with issues of connecting renewable generation from resource-rich remote locations to distant load centers. This will require flexibility, backup reserve, or storage of some kind in the electric grid whose cost, if accounted in the decision-making process, could render them equally expensive.
Pakistan direly needs a new and clear strategic energy vision from its political leaders and a strong belief in that vision undeterred by any resistance from bureaucracy, political opponents, or vested interests. The present piecemeal, disjointed, issue-specific, and lobbyist-driven initiatives cannot be termed a well-thought-out and imaginative strategic energy vision.
Fortunately, Pakistan does not face limitations of choice of technology, size, and fuels, and the typical medium to deliver the energy produced to end users. The world’s energy market has taken a favorable turn, opening a historic window of opportunity for the country. However, to benefit from it, we will need to make a fundamental shift in the way we produce, deliver, and consume energy.
Pakistan must rethink its energy vision and reflect the new market realities and trends in its policies and plans. A continuation on the traditional path—centralized supply, transportation, and distribution systems, albeit at slightly more efficiency and with a small share of renewables—would be suicidal. Pakistan must make transition to distributed energy supply and delivery systems, as much as possible based on renewable resources, and using a cradle to grave approach to energy planning and development.
Pakistan’s energy vision should build at least on the following strategic pillars:
- deploying sustainable technologies;
- shifting its transport to renewables-derived electricity;
- deploying energy storage technologies;
- producing alternative fuels from sustainable resources;
- switching industrial processes to electricity wherever it’s feasible;
- interconnecting its energy systems with those of its neighbors;
- promoting energy conservation and efficiency in every walk of life; and
- building a flexible, enabling, and resilient smart electric grid.
Pakistan will also need to switch from its present “top-down” to a new “bottom-up” approach to energy planning and development. Our planners should strive to serve the future energy demand at its source, from a nearby location, or from the central system whichever proves feasible. This will avoid big capital outlays and operating costs otherwise required to keep unnecessary reserves, transportation systems, and excessive losses.
Distributed energy supplies, especially those based on renewable, will enhance the “security” of energy supplies by reducing risks of sabotage and terrorism generally associated with mega projects. These will also contribute to “sustainability” by virtue of their reliance on natural energy flows and technologies, including skills and support that can be developed within the country easily.
Pakistan must also critically review its energy sector policies. We have seen a streak of energy policies, introduced at regular intervals by successive governments mostly to attract private investment in power generation projects. But these policies mostly failed to deliver on their objectives and have led to serious unintended consequences for the country like excess capacity, suppressed demand, runaway circular-debt, and high electricity tariffs.
The existing policies should be improved to encourage the deployment of distributed energy resources and discourage mega projects, especially those based on foreign technologies and fuels.
The government should also streamline and institutionalize the policy formulation process in the country by making it transparent, objective, and consultative. Special care must be taken to assess the coherence, integration, and coordination among these policies.
Every proposed policy must be screened through a specified criteria such as efficiency, cost-effectiveness, and equitable distribution of its costs and benefits among various stakeholders.
Efforts should be made to set a clear hierarchy among different policies, from top national ones down to local ones. Policy for a specific sector of the economy should guide those in its subsectors.
Consistency of policies among the major sectors of the economy and its subsectors and their stability over time will be pre-requisites for converting the strategic vision of our leaders into reality as they will raise investors’ confidence, reduce risk perceptions, and increase investment flows in the country.
Pakistan is passing through challenging times, no doubt, but no challenge is superior to human ingenuity and capability. With challenges often come hidden opportunities which need to be searched and discovered. As Marcel Proust aptly puts it, “The true voyage of discovery lies not in seeking new landscapes, but in having new eyes.”
Our leaders must look beyond their success in the next general elections. They must demonstrate wisdom, foresight, and sagacity to steer the nation through these times using a clear and strategic energy vision along the lines suggested above and using a unified, cohesive, and holistic set of policies to realize that vision.
The writer is an independent contributor having interest in sustainable energy and power policy and planning. He can be reached at: msrahim@hotmail.com
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