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Pakistan Faces Energy Crisis Amid Rising Temperatures and Increasing Demand

Pakistan Faces Energy Crisis Amid Rising Temperatures and Increasing Demand

Temperatures are soaring in Pakistan as summer approaches, leading to a significant increase in energy consumption, expected to exceed 29,000 MW. This surge will likely result in more power cuts, with people having to adjust their daily routines around unpredictable and unannounced load-shedding. As air conditioners and fans work harder, the strain on the fragile energy infrastructure becomes evident.

The impact extends beyond households, severely affecting economic development due to increased downtime and rising fuel costs. Manufacturing and agriculture sectors are particularly threatened, jeopardizing livelihoods and food security. In October 2023, Pakistan faced an energy deficit of 6,000 MW, resulting in an import bill of $7 billion.

According to the National Electric Power Regulatory Authority’s 2022 annual report, Pakistan’s installed generation capacity totals 43,775 MW, with only seven percent derived from renewable energy sources. Transitioning to a sustainable energy future is crucial.

Pakistan’s power sector has long struggled with rising electricity costs, inefficiencies across generation, transmission, and distribution, underutilization of efficient plants, mounting circular debt, and governance issues. These problems persisted throughout the last fiscal year and show no signs of improvement.

The financial strain on the power sector and consumers has worsened due to increased prices of primary energy sources such as coal, oil, and gas on the international market, exacerbated by the drastic devaluation of the Pakistani rupee. This has intensified the financial burden, leading to public demonstrations where citizens burned electricity bills they could neither justify nor afford.

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The energy supply is inadequate to meet the exponentially rising demand driven by population growth, industrial expansion, and rapid urbanization. Combined with the climate crisis, the need for a sustainable energy transition is critical.

While there is a theoretical appetite for change, implementing these changes requires significant determination. Pakistan has expressed its desire to invest in low-carbon energy but lacks the necessary infrastructure. There is no consensus among stakeholders, and financial constraints are significant. Additionally, the population is becoming more aware of rising emissions, increasing the reputational cost of relying on fossil fuels.

This challenge is not unique to Pakistan. At Princeton University’s Andlinger Centre for Energy, a simulation tasked professionals with increasing energy production to meet 2050 needs without increasing net carbon emissions. They had to balance clean energy, energy efficiency, net-zero fuels, and carbon capture and sequestration. Every choice had consequences: favoring renewable power heavily compromised affordability, while relying on fossil fuels provoked backlash. The goal is to create cost-effective, socially acceptable, and reliable energy sources that do not heighten the risk of natural disasters or opposition from the energy industrial complex.

Balancing Pakistan’s short-term energy needs with the long-term goal of a sustainable power sector is essential. Accurate forecasting of consumption and demand, coupled with a comprehensive planning framework, is a necessary first step. Experts must evaluate low-carbon energy investments, address political economy challenges, and leverage synergies across industries.

Understanding the vulnerabilities of the energy supply value chain can help absorb pricing shocks. Depleting natural reserves should prompt a shift away from over-reliance on imported energy sources. Upfront costs of efficiency measures can generate savings, reduce imports, improve competitiveness, and achieve environmental goals.

This journey is long and painstaking, with results that may not be evident by the next election. However, the cost of maintaining the status quo, ineffective subsidies, delaying policy shifts, and excluding those most affected by the power crisis is untenable. True progress lies in knowing when to break from the old and embrace the new.

The writer is an associate director at CERP.