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34 views11 pages

Presentation 1

Uploaded by

song nee
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Pakistan’s Energy Crisis: From Crisis to

Catastrophe?
• A wave of darkness engulfed Pakistan in January as its
decades old power grid unable to meet the country's
demand for electricity.
• Pakistan has been facing energy crises for more than a decade as a
result of reliance on imported fossil fuels, circular debt, political
instability, and absurd energy policies.
• Pakistan has plentiful indigenous energy sources; however, with a
population of over 230 million and rapid growth during the last
twenty years, poor planning and a lack of proper governance has
instigated a severe energy crisis
• This necessitates import of crude oil and other oil products in large
quantities to meet significant share of the total demand. Higher oil prices in
the global market and massive depreciation of the Pakistani rupee is making
oil more expensive, triggering external sector pressure and widening trade
deficit of the country.
• Pakistan’s energy crisis, with electricity shortages and frequent power
outages affecting daily life and business activities as the industrial
production has been adversely affected, compromising the standard of living
of many families, with a major impact on the economy and a very serious
loss to the overall GDP growth of the country of approximately 10%. If this
energy deficit is not addressed soon, Pakistan’s energy crisis might develop
into a national energy security risk.
• The country's electricity generation is heavily dependent on non-
renewable sources, such as oil, gas, and coal. These sources not only
contribute to pollution but also create economic challenges due to
the rising cost of energy imports.
• According to the data of the Central Power Purchasing Authority
(CPPA), circular debt stood at Rs 2467 billion by March 2022. This
implies that circular debt is equivalent to 3.8 percent of Pakistan’s
GDP and represents 5.6 percent of Pakistan’s government debt
• Imported Fuel
• Low Foreign
Expensive Reserve
Generation • High Cost of IPPs
• T & D losses • Government
• Power Theft Subsidies
• Poor Policies Limited Renewable
• Old collection Energy
Method
Political
Circular Debt instability and
corruption
High Population
Growth and
urbanization

Energy
Crisis
Pakistan Energy Mix

• According to National 5%
7%

Electric Power Fossil Fuels


Hydro

Regulatory Authority’s 25%


Renewable (wind, solar)
Nuclear

(NEPRA) 2021 yearly 63%

report, Pakistan’s total


installed power
generation capacity is
39772 MW.
Cost of Energy
• The cost of electricity generation in 2022 increased in many parts of the
world, led by surging energy commodity prices. Affordability of energy
remains a challenge for developing economies including Pakistan.
• Pakistan’s liquid foreign exchange reserves reached their lowest level
since 2014, leading to the prioritization of energy imports to the
detriment of other imports. This caused the shutdown of some
industrial facilities due to a lack of imported raw materials.
• Approximately 85% of Pakistan’s oil demand is fulfilled by imports, with
an expenditure of approximately USD 22.7 billion per annum. The
import of oil is a serious stress on the economy and has worsened
economic conditions.
Energy Situation and Challenges of
Pakistan
• The energy security of Pakistan is at the mercy of imported fossil
fuels. Pakistan relies mainly on oil and gas to meet its energy demand.
Need For Renewables
• Climate-induced calamities are one of the biggest driving forces
behind the move towards alternative sources of energy. For a
developing country like Pakistan, costs associated with climate change
can be unbearable
• Moving towards green energy, however, isn’t just a healthier option –
it is also a cost-effective one. Hydel, wind and solar-powered projects,
considered renewable, clean and green sources of energy, carry no fuel
costs in power tariffs with significantly lower cost of power
production than that of dirty fuel-based power plants
Need for Renewables
• According to the revised RE policy, Government of Pakistan
aims to derive 60 percent of energy from renewable sources
including hydro by 2030 that would wean Pakistan’s
dependence on imported fuel products.
• The country has abundant renewable energy resources which, if harnessed,
may help to effectively cope with ever-increasing energy demand.
• Therefore, there is a growing need for Pakistan to invest in renewable
energy sources such as wind, solar, and hydroelectric power. Pakistan has
significant potential for renewable energy, especially solar and wind energy,
due to its location in a region with high solar irradiance and strong winds
• The resolution of Pakistan’s energy crises could be essentially achieved
with effective energy planning by considering optimal diffusion of
renewable energy resources and improving governance. This approach
could help to overcome oil import expenses, contain climate change,
and ensure energy security in the long run.
• Ultimately, it is the issue of implementation that prolongs
Pakistan’s energy crisis, making many experts pessimistic
that the crisis can be resolved anytime soon. There is no
shortage of research, conferences, and proposals offering
policy solutions. However, these measures are not
executed, because there is no political will to do so

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