Like many other developing countries, Pakistan has faced severe energy crises for decades. With a population growth rate of approximately 2% annually, the second highest among South Asian countries, along with rapid urbanization and industrialization, the demand for energy has escalated significantly. However, the supply remains inadequate. Consequently, the country experiences frequent power outages, hindering economic growth, disrupting daily life activities, and impeding technological advancement.
Pakistan has struggled with electricity supply and recovery since its inception, costing billions of dollars in circular debt. The tariff collected by the Pakistan Electric Power Company (PEPCO) does not cover their power and fuel procurement. Furthermore, most electricity distribution companies in Pakistan are highly inefficient, leading to significant line losses, which account for 18% of total losses. The country produces electricity from various sources, with thermal providing 22%, natural gas providing 29%, hydro providing 28%, coal providing 12%, nuclear providing 5%, and wind and solar providing 4%. In comparison, India produces 52% of its electricity from coal and 12% from hydro, while the United States estimates that renewables constitute 22% of its electricity generation. Additionally, China generates around 55% of its electricity from coal, Australia 40%, the United Kingdom 43%, and South Africa 77%.
Pakistan has the potential to produce 50,000 megawatts (MW) of power for 800 years from the Thar coal reserves in Sindh, estimated to have 175 billion tons of coal. Currently, Pakistan faces a shortfall of 6,000 MW in electricity. Efficient utilization of the Thar coal reserves could fulfill domestic power demand and generate income through exports. Coal is the cheapest fossil fuel, and coal-based power plants can provide reliable and affordable electricity to Pakistan. The issue of electricity shortfall and high tariffs also poses a threat to cotton manufacturers—a vital component of the country’s economy. Enhancing cotton manufacturers’ production capacity through the provisioning of adequate and affordable electricity could also generate more employment and income for the country. Additionally, constructing new dams, such as the Kala Bagh dam with a capacity of 3,500 MW of electricity, could provide a steady supply of affordable electricity. Yes, it would be a dent in the effort to curb carbon emissions but with this cheap energy, Pakistan can get to a situation quickly where it can make the shift to clean energy sooner and without having to rely on any foreign power.
Pakistan’s power tariff recovery system is discriminatory, with some institutions exempt or subsidized for electricity usage, including intelligence agencies, bureaucrats, politicians, influential people, and public office holders. All consumers should be treated indiscriminately, and power tariff recovery should be the same and unsubsidized throughout the country. Investing in more efficient energy transmission systems, such as high voltage direct current (HVDC) transmission and smart metering, could counter electricity theft and line losses, ensuring a steady flow of energy. If discrimination has to exist, it should be in the form of carbon tax in the near future where any entity generating dirty energy should pay a carbon tax.
Furthermore, the government of Pakistan should allocate a portion of its budget to subsidize domestic solar power systems. By incentivizing the adoption of solar energy, Pakistan can diversify its energy mix and reduce dependence on costly fossil fuels. Solar energy is abundant in Pakistan, offering a sustainable and cost-effective alternative that can alleviate pressure on the national grid and reduce power outages, thereby facilitating daily life activities. This initiative would also encourage investment in renewable energy, foster economic growth, and promote technological advancement.
Reducing dependency on imported fossil fuels can stabilize energy costs over the long run, leading to greater financial stability and ultimately reducing the burden of circular debt (Current Rs 2.6 tr). Additionally, promoting and subsidizing renewable energy aligns with the goals of the International Monetary Fund (IMF) by promoting sustainable economic practices and reducing dependence on foreign aid. Nonetheless, the government should also explore all possible power generation resources, including wind, hydro, nuclear, and coal, while minimizing reliance on fossil fuels.
Complementing the shift towards renewable energy, another critically important factor contributing to a country’s prosperity is the management of waste disposal. Pakistan, like many other developing nations, is currently lacking in waste management infrastructure, resulting in serious environmental concerns. The majority of municipal waste is either incinerated, dumped, or buried on vacant land, thereby posing a threat to the health and wellbeing of the population at large. In order to address this pressing issue, Pakistan should invest in the installation of waste-to-energy (WTE) power plants. Such plants not only dispose of solid waste generated throughout the country, but also generate electricity as a by-product. A single commercial WTE power plant can produce up to 250 MW of electricity. To this end, two 50 MW WTE power plants are scheduled to start commercial operations in Karachi by year’s end, at an estimated cost of $175 million, thereby reducing solid waste by 3,000 tons daily. Given that the city generates approximately 15,000 tons of waste per day, the installation of such facilities in every district would help manage waste in a sustainable manner, thereby contributing to environmental conservation. A conducive environment for retaining the local talent and preventing brain drain would go a long way in creating home-made and creative technologies. The talent is there. It just needs to be harnessed through rewards.
Dr. Jamal Shah
The writer has a PhD in Economic Studies from University of Dundee and teaches at Abdul Wali Khan University Mardan.
