Energy sector needs to innovate competitively

The South Asian subcontinent is facing a massive energy crisis, which has placed regional governments on edge, compelled widespread switching to extremely polluting fuels like coal and fuel oil, and plunged nations like Sri Lanka into socioeconomic chaos. An uninterrupted, reliable, and economical energy supply is a crucial prerequisite for lowering poverty, promoting investment, and accelerating economic progress in a developing nation like Pakistan.

Pakistan’s energy resources have been inefficiently utilized for decades due to poor energy management. As a result, the country is experiencing a severe energy crisis that frequently hinders manufacturing and the service industry and disrupts electricity supplies in towns and homes all around the country. According to a survey by the World Bank, 66.7 percent of the businesses in Pakistan cite electricity shortages as a more significant obstacle to business than corruption (11.7 percent) and crime/terrorism (5.5 percent).In view of these aspects, the nation’s energy sector urgently needs to innovate.

Due to a severe discrepancy at the policy level, there are no simple or quick fixes for the power deficit that the nation is currently experiencing. Although there are domestic alternatives, policymakers have been ignoring them for more than three decades. Power outages are unlikely to be eliminated anytime soon unless the new government harmonizes the fragmented governance in this area. In the next 20 to 25 years, the nation will require US $210 billion to meet its expanding energy needs.

By 2050, it is predicted that the world’s energy consumption will have doubled, with emerging economies accounting for 90% of the increase as more people recover from poverty and increase their energy use. Energy demand in Pakistan has increased four-fold in the last 25 years; it is expected to increase eight-fold by 2030, and by a factor of 20 in the year 2050. Pakistan’s need for roughly 160,000 MW of power by 2030 is expected to increase at a rate of more than 9 percent annually. This would include having a huge amount of reserve power to cover repairs, malfunctions, and natural calamities

According to a recent study, load shedding costs PKR 500 billion annually (almost equivalent to the annual circular debt level). The economic impact of the energy shortfall according to a recent study, is estimated to be roughly 4% of GDP.

The Thar Desert contains 175,506 million tonnes of coal; the world’s seventh largest coal reserve. It is the largest coal reserve in the world and has the capacity to produce more than 100,000 MW of power over a 300-year timeframe. However, building new infrastructure requires 5-7 years. Within only Baluchistan province, Pakistan is thought to have shale gas deposits worth 51 trillion cubic feet (TCF). Shale gas production is currently nonexistent in Pakistan, and tremendous effort is needed to get this highly promising energy source up and running. Our rivers also offer an extra potential of at least 40,000 MW if properly marshalled.

Converting this local potential into production capabilities is hampered by financial limitations and political baggage. According to a review of local resources, Pakistan is capable of resolving its energy crisis. However, in order to build electricity projects, sufficient funding and planning are required. The affordability of the electricity generated by the new power plants for residential and commercial consumers should be a priority for policymakers.

Besides, Pakistan must make significant investments in power generation and related infrastructure if it is to achieve energy autonomy, and the execution strategies must be in line with the global energy dynamics that determine prices and supplies. Pakistan must not only be an effective energy producer but also an effective consumer and user of energy.

Understanding the significance of technical advancement is essential since it helps to raise global energy production, which in turn affects energy pricing. New renewable sources of energy production such as solar and wind are expected to provide temporary relief and need to be viewed only as a source of supplements since they are not sufficiently available and are expensive. For instance, the building of the 1,000MW nameplate capacity Quaid-e-Azam Solar Park. Beyond the Solar Park, further steps are required. In actuality, all of these actions ought to be a part of a comprehensive “energy efficiency” policy.

Moreover, the Covid-19 pandemic offered many lessons in work-from-home and hybrid arrangements, which can be reintroduced if residential areas can be assured of uninterruptible power. Another choice would be to bargain with traders to limit business operations to daytime hours, which can save a lot of electricity. Additionally, in order to compete in international markets, exporters must lower their margins and boost their efficiency rather than relying on government subsidies.

The cost of electricity and power has increased globally, and Pakistan is no exception. Additionally, regional conditions are not as favorable as our exporters suggest when requesting government subsidies and citing competition.

To summarize, beyond redefining energy efficiency as a rhetorical term, a solid and well-considered energy productivity policy framework must be created. Offering incentives for the development of distributed energy resources, i.e., encouraging a shift toward renewable energy sources like solar, wind, and biogas, is one way to address Pakistan’s energy crisis (and consequent environmental damage). Thankfully, Pakistan has access to renewable energy sources. In addition to having potentially abundant solar energy resources, it may also be able to access wind energy resources, particularly near the Arabian Sea’s shore. Pakistan’s possibilities for renewable energy are encouraging.

According to energy experts, Pakistan’s overall renewable energy potential is estimated to be around 167.7 GW, more than enough to fulfill the entire country’s demand for electricity. But it is difficult to evaluate the energy productivity programme and its subsequent implementation in a vacuum. To achieve the desired tactical and strategic aims, careful consideration by the relevant institutions is required. In this sense, the Pakistani government must take the lead in order to ensure peace and security as well as political stability and institutional reform. Until that time, the country won’t see an “invigorated” homeland, a healthier environment, an improved economy or, ultimately, a better standard of living for its citizens.

Copyright Business Recorder, 2022