Resolving Pakistan’s energy crisis

A step in the right direction by PML-N

Pakistan has been facing acute shortage of energy for quite a number of years now, and there have been some attempts to resolve the crisis. The installed capacity to generate electricity is around 22,000 MW and peak demand remains at 17000MW, with the primary source being non-renewable resources such as fossil fuels. However, due to lack of maintenance and inadequate investment, some of the installed sources of electricity are unable to run at full capacity, leading to reduction in supply.

The previous government, led by former President Asif Zardari, did take some steps to reduce the supply-demand gap through implementing consumer friendly energy policies. However, the focus towards investment remained in the balance for resolving the crisis as the government’s corrupt practices in the energy sector, in connivance with private companies, damaged its overall credibility. A mega corruption scandal involving high-level officials eventually got taken up by the National Accountability Bureau (NAB), which reported massive losses to the government. These corrupt practices increased the gap in supply and demand of the total output supplied via Distribution Companies (DISCOs) and National Transmission and Despatch Company (NTDC).

The previous government, led by former President Asif Zardari, did take some steps to reduce the supply-demand gap through implementing consumer friendly energy policies

Subsequently, when the government of Prime Minister Nawaz Sharif took over in June 2013, the energy shortfall was already at dangerous levels with overall supply deficit reaching 6000MW to 7000MW during the summers. Prime Minister Nawaz Sharif and his team took drastic steps to reduce load shedding by implementing shortfall reduction policies for commercial and residential areas. Furthermore, six coal-based power projects in Punjab and Sindh were proposed and initiated during late 2013 and early 2014 that were meant to increase the power generating capacity by up to 14000MW. However, the experts considered them environmentally hazardous due to coal being utilised as the primary resource.

China is already the highest consumer of coal based power plants in the world but the impact has been negative on the overall environment due to higher levels of air pollution in the industrialised cities and their surrounding suburbs. This has likely been the reason for Pakistan to review the potential long-term harms of coal based energy projects leading to their replacement with Liquefied Natural Gas (LNG) based plants for power generation by February 2015, which is consider the cleanest form of non-renewable energy. A lucrative $21bn deal for LNG projects with the government of Qatar was also finalised by March 2015 in the presence of the Qatari Emir. This has been a positive step taken by the PML-N led government for it can decrease the costs by 40 percent and emit 45 percent less carbon dioxide as compared to coal. This means that a cleaner and more efficient energy source shall be available for the consumers in case the deal goes as planned. Karachi already has an LNG terminal at Port Qasim and another one in Gwadar can greatly help reduce energy shortfall via Balochistan, especially for the proposed energy corridor from Gwadar to Kashgar, that can create thousands of jobs.

The focus of PM Nawaz Sharif’s government is going in the right direction for increasing power generation and it is highly commendable

Furthermore, the coal gasification project in Thar under the leadership of renowned scientist Dr Samar Mubarakmand is also of high significance as its purpose is to reduce the emission of harmful gases and provide high quality source for electricity generation that can run side by side with LNG projects. However, renewable resources such as hydroelectricity, solar and wind power should also be invested upon due to the fact that Pakistan’s climate is ideal for their utilisation. Old dams such as Mangla and Tarbela are nearing their lifetime due to heavy amount of salinisation from time to time. Hence, their capacity must be prolonged, as newer dams such as Daimer shall require time and investment to develop.

The focus of PM Nawaz Sharif’s government is going in the right direction for increasing power generation and it is highly commendable. If the government can provide both energy and security needs for Pakistan on a mandated time with the help of scientists and armed forces then the economy can greatly thrive through both FDI and local investments. Moody’s recent upgrade of Pakistan’s credit ratings from stable to positive shows that the economy has improved a lot and it is hoped that the government keeps up with its promises of providing relief to the people.