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Written by: Mussadiq-ur-Rehman

Position applied for: Research fellow Technology Transfer

Essay on “What should the government strategy to overcome energy


challenges in Pakistan.”
Energy is pivotal for running all other resources and crisis of energy directly influences all other sectors
of the economy. An energy crisis can be defined as any great bottleneck (or price rise) in the supply of
energy resources to an economy. There has been an enormous increase in the demand of energy in
Pakistan as a result of industrial development and population growth, as compared to increase in energy
production. The number of electricity consumers has increased to 12.5 million: household 46 per cent,
industry 28 per cent, agriculture 12 per cent, bulk supply 9 percent and commercial five per cent. For
faster economic growth, Pakistan needs more generation. Supply of energy is, therefore, far less than
the actual demand, resultantly crisis has emerged. Pakistan’s energy consumption is met by mix of gas,
oil, electricity, coal and LPG sources with different level of shares. Share of gas consumption stood at
43.7 per cent, followed by oil 29.0 per cent, electricity 15.3 per cent, coal 10.4 per cent and LPG 1.5 per
cent. But still shortfall of 3000MW due to non-payments to IPPs, transmission losses and water shortage
etc. Following are some recommendations to halt the already deteriorating energy situation.

1. Thinking about energy:


a. Emphasize demand-side solutions as much as supply-side:
Efficient use of energy resources is sine-qua-non for tapping energy crisis.it requires two
pronged approach first by enhancing generation capacity second by proper use and
eradication of systematic loses i.e. transmission and distribution loses.
b. Underscore the critical role of data collection and technology:
Credible data collection and usage of efficient smart meters and other devices that enable
authorities to constantly monitor patterns of energy consumption.
c. Do not overlook noncommercial energy:
Pakistan should incorporate noncommercial energy into plans and policies, and recruit more
policymakers with expertise in this area as non-commercial account for 50 percent of overall
demand.

2. Energy mix:
a. Achieve a more affordable energy balance:
Move away from expensive hydrocarbon (and oil-dominated) imports and more toward the
exploitation of untouched domestic reserves.
b. Embrace coal:
Due to huge indigenous coal reserves Pakistan in short run should try to tap coal energy for
power generation with proper research on coal power plants technology and coal quality to
mitigate environmental impacts.
c. Capitalize on opportunities for natural gas and renewables:
A staged approached can be applied in case of natural gas at first Pakistan should take
advantage of its large reserves of unexploited natural gas alternatives such as tight, shale,
and biogas, and turn to the private sector to kick start tight and shale gas development and
secondly Import of natural gas can also be pursued i.e. 750 km long peace pipeline. The
Pakistani government should also encourage, through duty-free imports, the installation of
solar panels on homes and buildings to serve increasing demand in residential and
commercial sectors. Furthermore, distribution companies should develop the capacity to
take surplus solar power from homes and buildings to help meet their peak power demand.
Additionally, NEPRA should court solar and wind power investors by offering reasonably
priced tariffs.

3. Energy Markets and Pricing:


a. Make Pakistan’s energy sector more attractive for investors:
Political stability, guaranteed social and financial security, meritocracy and controlled
corruption will induct more foreign investors in to power sector.
b. Adjust gas prices:
gas tariff policies should be adjusted so that it cost less to national exchequer. Initially gas
tariff policies should be adjusted so that industry consumers bear a larger brunt than
residential ones and then closing the gap in appropriate ratio.

4. Energy Governance
a. Reduce T&D losses immediately:
Trough technological and efficient equipment induction transmission and distribution losses
should be reduced from currently 20% to 10%.Overhaul Old Transmission Lines and Grid
Stations.
b. Take energy theft more seriously:
Punitive measures, user associations that monitor energy use, conduct audits, and identify
and report electricity along with public awareness drive on national scale will help to curb
the theft problems. Energy conservation through public awareness will also save up to
2500MW according to one study.
c. Ramp up Pakistan’s capacity to explore and develop indigenous energy resources:
Pakistan’s oil, gas, and coal reserves are vastly underexploited. Less than 4 percent of
probable oil reserves and 19 percent of gas reserves have been confirmed, while just 1
percent of coal reserves have been proven. Pakistan should invest in the technology and
infrastructure to tap into these reserves.

5. Institutional Reform
a. Bring more coordination and order to the energy sector:
Policy formation should be more robust and open to public cadres taking into consideration
public demands at each step. Take measures so that red-tapism should not hamper the
policy formation. If such changes are deemed too disruptive or infeasible, Pakistan should
create a chief energy adviser’s office with multi-ministry jurisdiction.
b. Privatize, but slowly and in phases:
Privatization can make energy institutions more effective, because when they are
untethered to the state they will have more incentive to strengthen their technical
capacities and foster accountability.

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