Dr. John P. Holdren, Advisor on Science & Technology to President Obama for his dual term in office and a distinguished faculty at Harvard and Berkley for over two decades, believes that there are two ways a society can get into trouble with “energy”: either not having enough resources or having them but their cost moves beyond its reach. What Dr. Holden perhaps did not expect was that a society can have sufficient energy resources, but poor vision of its leaders and inappropriate policies can push energy beyond its reach. Pakistan’s present energy Imbroglio is a case in point.
Energy is undoubtedly the lifeblood of modern society. The amount of energy required to produce a unit of GDP can be contested, but what cannot be contested is that access to some minimum affordable, secure, and sustainable energy is inevitable for a country to power its economy and provide decent living to its people. Though not absolute, per capita energy use is a reasonable indicator of the development of a country. But the energy sector is also the hub of environmental pollution and the growing threats of global climate change.
Electricity, a derived form of energy, is considered a superior energy career for its versatility of use, ease of control, and cleanliness. As societies develop and their incomes rise, they switch from other forms of energy to electricity. Electricity is emerging as the choice energy career because if derived from renewable resources and use cleaner technologies, it can enable the world to phase out its reliance on fossil fuels and serve its energy needs sustainably.
Pakistan’s per capita annual energy consumption of 14 gigajoules in 2023 was only 18% of the world average, 11% of the European Union average, 12% of China, and 51% of India (1). Its per capita annual electricity consumption of 670 kWh in 2023 was only 18% of the world average, 11% of the European Union average, 12% that of China, and 49% that of India (2).
Pakistan’s per capita annual GDP of 1,365 US$ in 2023 was only 10% of the world average, 5% of that of European Union average, 16% of that of China, and 81% of that of India (3). Only 70 to 75% of its population at present has access to electricity service meaning that 60 to 70 million people in Pakistan are still without it (4).
So, Pakistan faces abject poverty, both in terms of 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.
Most analysts now agree that the primary cause of Pakistan’s energy poverty is its over-reliance on energy supply system that is largely based on imported technologies and fuels
Energy poverty adversely affects the quality of life of households, compelling them to compromise on other basic needs, and forcing them to use traditional fuels which seriously affects their health and safety. Lack of energy at reasonable prices to agricultural consumers, commercial businesses, and industries undermines the competitiveness of their products and services.
Most analysts now agree that the primary cause of Pakistan’s energy poverty is its over-reliance on 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.
Pakistan needs a clear strategic vision from its 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.
Phasing out fossil fuels, adding renewable power generation, and increasing hydro and nuclear may bring some symptomatic relief to a sector under financial siege but will not cure it. Both are capital-intensive, have long lead times, and have several unresolved issues associated with them.
The recent love-affair of our leaders with renewable 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 whose cost, if accounted, can make them equally expensive.
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—centralised supply, transportation, and distribution systems, albeit at slightly more efficiently and with a small share of renewables—would be suicidal. Pakistan must make transition to distributed energy supply and delivery systems.
Pakistan’s energy vision should build at least on the following strategic strands: (i) deploying sustainable technologies; (ii) shifting its transport to renewables-derived electricity; (iii) deploying energy storage technologies; (iv) producing alternative fuels from sustainable resources; (v) switching industrial processes to electricity wherever feasible; (vi) interconnecting its energy systems with those of its neighbors; (vii) promoting energy conservation and efficiency in every walk of life; and (vii) building a flexible, enabling, and resilient smart power grid.
When formulating policies, effort should be made to set a clear hierarchy among different policies, from top national down to local ones
Pakistan also needs 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 excessive 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, skills, and support that can be developed in the country.
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 projects. But they failed to deliver and have led to serious unintended consequences like excess capacity, suppressed demand, runaway circular-debt, and high electricity tariffs.
The government should streamline and institutionalise its policy formulation process by making it transparent, objective, and consultative. Every proposed policy must be screened through a specified criteria such as efficiency, cost-effectiveness, and equitable distribution of costs and benefits. 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.
When formulating policies, effort should be made to set a clear hierarchy among different policies, from top national 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 sub-sectors and their stability over time are pre-requisites for converting the strategic vision into reality as they will raise investors’ confidence, reduce risk perceptions, and increase investment flows.
Pakistan is passing through challenging times. No challenge however is superior to human ingenuity and capability. With challenges come hidden opportunities that need to be searched and discovered. Our leaders must look beyond the next general election and demonstrate wisdom, foresight, and sagacity to steer the nation using a clear and strategic vision along the lines suggested above and using a unified, cohesive, and holistic set of policies to realise that vision.