Modernising Pakistan’s Energy Sector

Modernising Pakistan’s Energy Sector

Pakistan is making slow progress to address the crisis wrought by flooding. Before this natural catastrophe, Pakistan is already facing a series of crises because of poor policies and their implementation and an unstable government. However, among all of these crises, the energy crisis ranking at the top. The inundation has increased the vulnerability of people and caused interruptions of transmission supply.

The heavy rainfall has damaged the power infrastructure and supply of electricity. Only in Gilgit-Baltistan, 22 power stations have been damaged and disrupted electric supply in almost 90% of the area. Akin to this, there is a complete power shutdown in Sindh and this caused people to stay without. Prior to the floods, Pakistan is already suffering from power cuts of 8 to 14 hours because of outdated infrastructure and huge dependence on imported oil. Currently, the government is spending $21.43 billion to import fuels and it is depleting 66% of the foreign exchange reserves annually. In 2021, the energy demand was 29,435 MW and it was expected that it will be increased to 49,078 MW by 2030.

To mitigate the energy demand Pakistan has to modernise the energy system by diversifying the generation system. The government has to include other sources to generate energy apart from the hydel and thermal power plants. Pakistan has already initiated a few coal projects to increase its capacity yet these are not enough to fulfil the demand. At present, the country is producing only 4% from renewable resources (solar, wind, and biogas). However, it is already mandated in the Alternative Renewable Energy (ARE) policy that country will produce 20 to 30% of its total energy from the alternative resource.

Pakistan can implement a modernization energy system in three phases i.e., in the first phase restore and replace the existing energy system. In the second phase, the government should provide a tax subsidy for the installation of solar plants. In the third phase, the government should encourage gradual switching from heavy fuel-consuming items such as gas-burning vehicles to eco-friendly vehicles and products.

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IMARAT Institute of Policy Studies

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