The power sector in Pakistan is highly dependent on imported fuel. Under former prime minister Nawaz Sharif, the country planned to build a fleet of lignite coal and nuclear power plants. However, after taking office, his successor Amir Khan cancelled some of these projects and pledged to double hydroelectric output and boost renewables to 60 percent of the total generation mix. However, the government’s failure to support solar and wind power has left Pakistan without the cheapest indigenous source of energy.
Solar energy
In Pakistan, solar energy has the potential to alleviate the country’s power shortage and fight unemployment. The country experiences eight to eleven-hour daily blackouts, and its total power shortfall is estimated at 6,000 megawatts. Pakistan’s government has reduced import taxes on solar panels and has also approved net-metering, which allows consumers to sell excess power to the national grid. These policies could spur the adoption of solar energy and help the country deal with power shortages.
In Pakistan, the energy crisis has reached alarming proportions. A number of government reports have highlighted the energy crisis, including those by the Dawn newspaper on 29 July 2006 and 24 June 2008. Reuters and Forbes also published reports detailing energy saving measures in Pakistan. In Pakistan, there is a need for a more sustainable, diverse and integrated energy policy that can address the country’s power shortage.
The country’s reliance on fossil fuels has become inefficient. This inefficient use of resources is a source of tension in the electricity sector, and the government and consumers are in debt to one another. By June 2013, this circular debt had ballooned to $5 billion. Furthermore, the electricity sector is heavily affected by the lack of investment.
In Pakistan, 55% of the population has access to electricity and the per capita supply of electricity is around 520 kWh. However, the country is facing severe load shedding and blackout issues due to the shortage of three GW. Conventional electricity generation in Pakistan is dominated by fossil fuels, with oil and gas accounting for over 65% of the total. While the country has massive coal reserves, it needs to develop renewable energy to alleviate its power crisis.
Hydropower
If we are to get out of Pakistan’s power crisis, we need to make the electricity sector more efficient and diversify sources of power generation. If we don’t, we’ll only be accumulating circular debt and facing dark hours in large portions of the country. And to do that, we need to develop hydropower.
Hydropower projects are fundamental to Pakistan’s socio-economic development. While large hydropower projects are critical for the power sector in Pakistan, their construction has been plagued with delays and cost overruns. This has stifled Pakistan’s progress with its current pipeline. For instance, a 969-MW project at Neelum Jhelum is already in the works, but stalled due to technical challenges and non-availability of funds.
The government has committed to build seven hydropower projects in the country. These include the Golen Gol hydropower project, the Neelum-Jhelum hydropower project, and the Dasu hydropower project. These projects have a combined capacity of 21,000 megawatts. The government is also looking at large-scale reservoir projects such as the Mohmand Dam, which will be able to generate 800 megawatts of electricity.
Pakistan is also tackling its power crisis by looking at renewable energy sources. By 2030, it is expected that the demand for electricity in Pakistan will reach 11,000 megawatts (MW). In order to achieve energy independence, Pakistan must work on a holistic approach to harness the renewable energy resources available in the country.
Exploration of indigenous energy resources
Pakistan has many challenges in its electric power sector, including suboptimal infrastructure, low installed capacity, and inadequate revenue. Pakistan currently only has access to electricity for 67% of its population. In comparison, over 6 million people in Nepal have no electricity at all. Ultimately, the country must develop both short-term and long-term solutions to its energy crisis.
The country’s current energy mix is irrational and unaffordable. The country is almost one-fourth dependent on imported oil, compared with eighteen percent for India and one-seventh for Bangladesh. As a result, Pakistan’s power supply is costly and often inconsistent. Its power operating companies have poor planning and project implementation.
Pakistan has enormous potential for electricity generation from renewable sources, particularly solar PV. Global trends of declining solar costs have provided motivation for the country to explore solar resources. The country’s location in the Sun Belt region provides an advantage in solar resource exploration. Several studies have assessed the country’s potential for renewable energy and examined whether it would be economically viable to use it to meet Pakistan’s energy needs.
Another renewable energy resource that Pakistan has in abundance is hydropower. The potential for hydropower is especially high in the locations between the Arabian Sea and the mountains. Mountainous areas provide huge potential for water to fall, and major rivers falling into the Indus River offer excellent potential for power generation. Hydropower plants in Pakistan could generate 2250 MW of electricity annually.
China’s response to coal
The recent heavy rains have caused power shortages in Pakistan and killed at least 1400 people. The power crisis is compounded by the fact that Pakistan is overly dependent on hydropower, and dams in the country are notoriously vulnerable to the monsoon rains. This year, hydro generation in Pakistan fell by as much as 12% compared to a year earlier. This in turn prompted the resurgence of coal mining.
As a result, Chinese IPPs have not received payments for the power that they have supplied, a major financial burden. Furthermore, China has recently increased the tax rate on these companies, putting them further in financial difficulty. This is especially problematic because contracts with Chinese IPPs stipulate a revolving fund for the automatic payment of dues. The previous government had promised automatic payments, and Mr Iqbal assured Chinese firms that he would do everything possible to ensure that they get their money on time.
China has promised to provide electricity to Pakistan’s power stations as part of the China-Pakistan Economic Corridor. This agreement is intended to bring 10400 megawatts of new energy projects to Pakistan in the short to medium term. It is anticipated that in five years, China will provide as much as 16,000 megawatts of energy to Pakistan. Meanwhile, the government has pledged to speed up the implementation of ongoing energy projects. Two coal power plants with 660 megawatts each have started work in Sahiwal. Another coal power plant in Engro Thar is expected to finish in February 2015. These coal power plants are providing power to the national grid.
China’s response to Pakistan’s power shortage has been welcomed by Pakistan’s government. Several factors contributed to this energy crisis. China is interested in making substantial investments in Pakistan’s energy sector as part of its Belt and Road Initiative.
Economic impact of coal on Pakistan
Pakistan has a power crisis that requires massive investment and new technology to overcome. The country is facing a lack of money to pay for the generation, transmission and distribution of power. Additionally, the price of energy is much lower than its actual cost, which makes it impossible to sustain a regular power supply.
This problem is compounded by the over-reliance of the country on hydropower. Dams in Pakistan are notoriously vulnerable to the monsoon rains, and last summer power cuts were triggered by low water levels. In October, the country’s hydro generation fell 12%, compared to a year ago. As a result, coal mining has resurged.
However, while Pakistan has huge deposits of coal in the Thar Desert, the government has only one coal power plant operating. Despite this, the country is taking steps to develop this resource. In January 2014, the Prime Minister of Pakistan Nawaz Sharif broke ground on a $1.6 billion coal power project in the Thar Desert, which is expected to be operational by 2017.
In the long-term, the development of coal-based power plants in Pakistan will have serious environmental consequences. The country’s environment is already vulnerable to climate-induced hazards, and coal-fired power plants will add to that risk. According to the Global Climate Risk Index, Pakistan is one of the world’s most vulnerable countries to climate-induced disasters.
