A crisis of power

Published May 25, 2024

TEMPERATURES are soaring in Pakistan, as we edge into summer. This means our energy consumption is going to shoot up to over 29,000 MW. It also means that we’re looking at more power cuts, planning our chores, work, and rest around unpredictable and unannounced load-shedding. As our air conditioners hum louder and fans whirl faster (when there is electricity), the strain on our fragile energy infrastructure becomes palpable.

Yet, the ramifications extend far beyond our homes. Our economic development is strangled, bound as it is by downtime and rising fuel costs. Manufacturing remains im­­perilled, as does agriculture, threatening livelihoods and food security. In October 2023, Pakistan had an energy deficit of 6,000 MW, incurring an import bill of $7 billion.

According to the National Electric Power Regulatory Authority’s 2022 annual report Pakistan’s installed generation capacity adds up to 43,775 MW, of which a paltry seven per cent comes from renewable energy sources.

Making an energy transition towards a sustainable future is critical.

Over the years, Pakistan’s power sector has grappled with rising electricity costs, inefficiencies across generation, transmission, distribution, transmission limitations, underutilisation of efficient plants, mounting circular debt, and governance issues. These problems have persisted during the last fiscal year and show no signs of abating as we begin the next.

The liquidity of the power sector and electricity affordability for consumers has worsened, driven by heightened prices of essential primary energy sources such as coal, oil, and gas in the international market, compounded by the drastic devaluation of the Pakistani rupee. These factors intensified the financial burden on both the power sector and consumers, many of whom took to the streets last year, staging demonstrations and burning electricity bills they could neither reconcile with their scant consumption nor pay.

The shortfall in our energy supply is woefully inadequate to cater to the exponentially rising demand, driven by unimpeded population growth, industrial expansion and rapid urbanisation. Combined with the crippling climate crisis, and the need to make an energy transition towards a sustainable future becomes critical.

The appetite for change is theoretically always ripe. But to implement those changes requires a strong stomach.

Pakistan has been vocal about its desire to invest in low-carbon energy but lacks the infrastructure to fully realise its benefits. There is no consensus among stakeholders and significant financial constraints. And with a population becoming more conscious of rising emissions, there is a reputational cost of sticking to fossil fuels.

This challenge is not unique to Pakistan. At Princeton University’s Andlinger Centre for Energy, a simulation was conducted. Professionals were tasked with the challenge of increasing energy production to meet the needs of a growing population by 2050, without increasing net carbon emissions. Their calculus had to include clean energy, energy efficiency, net-zero fuels, carbon capture and sequestration. They fed their choices into a software that showed the consequences of every choice made. If they favoured renewable power heavily, they compromised affordability. If they tipped the scale and went with fossil fuels, they provoked a backlash. So how does one create cost-effective, socially acceptable and reliable sources of energy that do not heighten the risk of natural disasters or opposition from the energy industrial complex?

The answer lies in balancing Pakistan’s short-term energy requirements to drive growth, with its long-term goal of transitioning to a more sustainable, efficient, and affordable power sector. A first step is to accurately forecast consumption and demand and develop a planning framework based on those figures. Experts in the field must evaluate alternative low-carbon energy investments, remedy the political economy challenges it presents and leverage synergies across different industries.

The vulnerabilities of the country’s energy supply value chain offer insight into what needs to be addressed to absorb pricing shocks. Depleting natural reserves must lead to a rethink, not an overdependence on imported energy sources. Upfront costs of efficiency measures are a means to generate savings that will only bring benefits such as reduced imports, improved competitiveness and progress towards environmental goals.

None of this is easy, and there are no quick fixes. This is a long painstaking journey, the results of which may not bear fruit in time for the next election. But the price of the status quo, ineffective subsidies, delaying policy shifts and not including those most affected by the power crisis is one we cannot afford.

Knowing when to break with the old and forge the new is where true power lies.

The writer is an associate director at CERP.

Published in Dawn, May 25th, 2024

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