Whenever a new government takes charge in Pakistan, it starts to reinvent the wheel, always with new zeal. High intents are coupled with even higher-sounding slogans like “Turnaround Pakistan”, “Make it the Asian tiger”, and “Make it a job paradise for foreigners”. The latest addition to this colorful potpourri is “Uraan Pakistan”, launched 30th December 2024 with a lot of fanfare and hype.
This new National Economic Transformation Plan: (2024-2029)—fondly termed as Uraan Pakistan (make Pakistan fly, in plain words) by the government)—envisions using a 5Es framework to enable Pakistan to take off and fly to a secure, prosperous, and sustainable future. The 5Es stand for: (i) Export-led economy; (ii) E-Pakistan (electronic or digital); (iii) Environment and Climate Change; (iv) Energy and Infrastructure; and (v) Equity, Ethics, and Empowerment. The plan elaborates on each “E” by listing the critical issues, setting goals, and listing strategies to achieve them.
Though the plan is overflowing with high-sounding terms such as efficiency, sustainability, security, resilience, diversity, and the like, it falls short of providing a clear and definitive strategy as to how it will deal with the institutional setup and its governance that is rotten to its core and can frustrate (as it has done in the past) any effort that threatens the status quo.
American motivational writer and speaker Zig Ziglar once remarked, “The most practical, beautiful, and workable philosophy in the world won’t work if you won’t.” So, first things first, the government must undertake institutional reforms in the country before overlaying any exotic demand on them, otherwise it might be setting itself up for another disappointment.
In Pakistan, we continue to move in circles and have not learned any lessons from history. It’s quite evident in the energy sector which is in the throes of oft-repeated band-aids and quick fixes, albeit with a new zest. While it’s difficult to comment on the viability of the other 4Es, the plan’s Energy section leaves much to be desired. It clusters Energy with Infrastructure and Mining issues whereas it deserves independent treatment. Also, it lacks a clear, comprehensive, and workable strategy to deal with the issues the plan itself lists. The suggested strategies can be termed incremental or marginal at best but not transformative as the developers of this plan claim.
We now live in an information age. Large and energy-guzzling industries are giving way fast to smaller and knowledge-laden high-value products and services. Gone are the days when energy industries were favourite of investors because risks were minimal and returns guaranteed. The landscape has changed completely. The issues of security, reliability, and sustainability of their dependence on fossil fuels have become pivotal, especially if these rely mainly on imports.
Two critical obstacles in Pakistan’s transition to a sustainable energy future are the deeply entrenched mindset and the institutional setup that has evolved around fossil fuel supplies and is proving hard to change
The world is phasing out fossil fuels and switching to electricity derived from renewable and sustainable resources. Multiple options now exist both for suppliers as well as consumers. Small and distributed power technologies (both conventional and renewable) have now become competitive with their conventional (large and central station) counterparts. Electricity consumers are also no longer captive to their local grids and have options for controlling their demand meeting it via on-site generation, or both.
These alternatives offer many benefits. Their use can reduce costs, transmission, and distribution (T&D) losses and, in favourable conditions, eliminate T&D needs altogether. Their nature—small, distributed, labor-intensive, less complex, and compatible with local conditions—makes them a preferable choice and a means to spur industrialisation and employment. They also enhance the diversity, sustainability, and security of the system.
Pakistan must also rethink its energy vision afresh and reflect the new realities and trends in its policies and plans. A continuation on the traditional path—a centralised power supply and distribution system, albeit at slightly more efficient and a small share of renewables (merely 10% as envisaged in the new plan)—would be suicidal. Pakistan must make a transition to distributed supply and delivery systems as other countries are actively doing.
Pakistan’s energy vision should build at least on the following strategic strands:
- Deploying sustainable technologies (including renewables);
- shifting its transport to renewables-derived electricity;
- deploying energy storage technologies;
- producing alternative fuels from sustainable resources;
- switching industrial processes to electricity wherever practicable and feasible;
- interconnecting its electric grid with those of its neighbours;
- promoting energy conservation and efficiency in every walk of life; and
- Building a flexible, enabling, and resilient smart electric grid.
The thread that will run through the entire energy system and will hold it together, is the institutional setup (its capacity, capability, layout, and governance) that is lean, flexible, agile, and responsive to the dynamics of the global energy markets.
Two critical obstacles in Pakistan’s transition to a sustainable energy future are the deeply entrenched mindset and the institutional setup that has evolved around fossil fuel supplies and is proving hard to change. Even when new options have become feasible, many in Pakistan still consider them only addenda to the conventional options.
The present energy sector setup is fuel-based, issue-specific, and fragmented. It’s divided into compartments that function mostly in silos. It’s also bureaucratic and inefficient and lacks the cohesion, harmony, and coordination essential for handling new challenges. The plethora of existing entities, groups, and functions (within and outside the Ministry of Energy) have lost their utility, have become dysfunctional, and are only a liability for the nation.
The effective handling of new challenges also demands close coordination and collaboration among all energy sector entities, not just in letter but in spirit which we seriously lack at present
Pakistan direly needs to transform its energy sector by rethinking its mission, objectives, strategies, institutional layout, organisational structures, and governance mechanisms. We need a setup that can steer the country through the turbulent times via a vision-led, holistic, and integrated effort.
As the environment around them changes, organisations must adjust, realign, and reposition to remain profitable. Monolithic and bureaucratic organisations with tight vertical hierarchies and centralised control are not effective in a business climate that is punctuated with uncertainty, complexity, and rapid changes. During turbulent times, their form, functions, and routines lose value while their leadership, strategy, and competence gain importance. Smaller organisations with lateral structures are more capable of creativity, innovation, and agility.
The effective handling of new challenges also demands close coordination and collaboration among all energy sector entities, not just in letter but in spirit which we seriously lack at present. For example, activities in the fuel and power sectors were brought under a new Ministry of Energy to improve integration and coordination among them. Both remain separate to this day without any noteworthy mutual coordination. Each stream is even headed by its minister.
The situation is ripe for establishing a new entity in the energy sector. This entity (we can term it generically, “The National Energy Commission (NEC)”), may be carved out of the existing entities, after some necessary trimming and redefining of their roles and functions. The NEC should be entrusted with the responsibility of strategic planning, policy-making, devising legal, regulatory, and financial frameworks, and any other critical energy issue in the country with a holistic vision and from a single platform.
The NEC should take guidance from the Ministry on strategic priorities and goals of the government and liaise with the Ministry of Planning, Development, and Special Initiatives in setting a strategic energy agenda for the country and developing the most suitable strategic and action plans from the perspectives of energy security, affordability, and sustainability. It should also guide all the other energy-related activities and functions downstream using a soft, arm’s-length, and non-interventionist approach.
Our leaders must reconsider their present approach in the energy sector. We need holistic thinking, integrated planning, and close coordination within this sector to effectively deal with the challenges posed by the rapidly shifting global energy landscape. This also makes the energy sector’s institutional re-arrangement imperative. The sooner we did it, the better prepared we would be to manage the emerging challenges to our advantage.