In a developing country like Pakistan, a reliable, uninterrupted, and affordable energy supply is a fundamental precondition for reducing poverty, encouraging investment, and boosting economic growth. Among other challenges, the newly elected Pakistan Tehreek-e-Insaf government under the leadership of Imran Khan inherits a very stagnant energy sector. Despite broad access to electricity (99 percent of the population had access to electricity in 2016, compared to 59 percent of the population in 1990), the country experiences massive blackouts (load shedding of 6-8 hours a day for households and 1-2 hours a day for the industry). Because of poor energy management, Pakistan’s energy resources have been used inefficiently for decades. As a result, the nation faces a serious energy crisis that has often stymied manufacturing and the service sector and disrupted power supplies in communities and households across the nation. 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 light of these factors, there is an urgent need to innovate in the energy sector of the country.
Fortunately, Pakistan has a high renewable energy potential, which has been elaborated in many studies on Pakistan. A recent report published by USAID attests to Pakistan’s energy potential, stating that it can potentially produce 100,000 MW from solar energy alone. Despite the potential, Pakistan remains “powerless” when it comes to adequately powering lights for its homes, machinery for its factories, and stoves for its kitchens. Data from many sources, including the Ministry of Water & Power and Pakistan Economic Surveys, over the past five years show that Pakistan has been facing an average shortfall of between 4,000-5,000 MW.
This acute energy crisis is a result of flawed energy policies pursued for decades, the high cost of generation, and aging and inadequate transmission, among other causes. In addition to transmission losses and distribution thefts, an entrenched bureaucratic culture marked by poor organization, planning, and project implementation among Pakistan’s power operating companies only compounds the problem.
Power shortages are also rooted in Pakistan’s irrational and increasingly unaffordable energy mix: 64 percent thermal, 30 hydropower, and 6 percent nuclear. A high reliance on thermal power plants (which in turn are run by natural gas, oil, or coal) and hydropower seldom assure a continuous flow of power. Heavy dependence on oil-based energy makes power high-priced. The prevailing energy crisis is costly to the economy in the form of huge subsidies and high circular debts. Politicians and policymakers in Pakistan have made little real attempt to diversify the nation’s energy supplies and to shift dependence form expensive and imported oil toward potentially cheaper and cleaner resources available in the country (Pakistan’s dependence on oil imports is 24 percent, compared to India’s 18 percent and Bangladesh’s 21 percent). Pakistan’s stubborn reliance on fossil fuels continued even after the oil shocks of 1973 and 1979.
The misguided energy mix also exacerbates the nation’s already serious environmental problems, which manifests itself in poor air quality and unsafe drinking water. Pakistan ranked a dismal 148th out of 175 countries, according to Yale and Columbia University’s Environmental Performance Index.
One solution to Pakistan’s energy crisis (and interrelated environmental deterioration) is to provide incentives for the development of distributed energy resources, i.e., encourage a shift toward renewable energy resources such as solar, wind, and biogas. Fortunately, Pakistan is endowed with renewable energy resources. It not only has potentially bountiful supplies of solar energy but also could tap possible sources of wind power, especially along the coastal areas of the Arabian Sea. The prospects for renewable energy in Pakistan are heartening. Energy experts estimate that Pakistan has a total renewable energy potential of about 167.7 GW, more than enough to meet the nation’s total demand for electricity.
Better late than never, Pakistan has started to acknowledge its renewable energy potential as evidenced by the construction of Quaid-e-Azam Solar Park, with a nameplate capacity of 1,000 MW. There is a need for more additional steps beyond the Solar Park. In fact, all these steps should be part of a multipronged “energy productivity” policy. By encouraging energy conservation (efficiency), on the one hand, and facilitating a move toward clean renewables, on the other, the productivity policy will not only enhance energy security but also improve the environment.
Energy Efficiency vs. Energy Productivity
Energy efficiency (doing more tasks with less energy, as defined by Berkeley physicist Richard Muller) is “cheaper than cheap.” It doesn’t cost much. A McKinsey & Company report finds that savings made from energy conservation and efficiency would be enough to pay for projects such as expanding wind from energy production and installing solar panels.
In general, discussions about energy efficiency often fixate on its ability to lower energy consumption, reduce expenditures, and curtail greenhouse gas emissions. It is worth exploring if this mantra would work in developing Pakistan.
Like any emerging economy, Pakistan focuses on growth and poverty alleviation, and the additional goods and services needed to produce these gains. More business activities, infrastructure, housing, education, and health services require more energy consumption. Paradoxically, the very idea of energy efficiency remains unappreciated, in part, by a perception that it is a tool designed to reduce rather than expand consumption and production. Since the focus in Pakistan remains on growth, which the nation views as central to its future good, energy efficiency is dismissed as shorthand for cutting down on growth.
In fact, presenting energy efficiency as “doing more with less,” as is the case in developed countries, tends to get lost in translation in countries such as Pakistan. Thus, a change in the energy efficiency paradigm is needed to better promote energy efficiency in a way that links such efforts to improved living standards and increased prosperity. A more inclusive alternative narrative such as energy productivity should be advocated — that is, producing more goods and services with the same energy (equivalently, “doing more with the same”). As opposed to the traditional energy efficiency paradigm focusing solely on fewer inputs (“more with less”), energy productivity focuses on generating more outputs with the same inputs.
Beyond the reframing of energy efficiency as a rhetorical concept, there is a need for developing a sound and thoughtful energy productivity policy framework. Such a policy framework would inculcate renewable energy as a significant aspect of energy productivity policy. In the process, it would ameliorate energy security, address environmental degradation, stimulate economic growth, and, last but not least, mitigate public worries.
However, the energy productivity policy and its subsequent implementation cannot be viewed in a vacuum. Cautious deliberations by concerned institutions must take place to advance the tactical and strategic goals that are sought. In this regard, the government of Pakistan must play a prominent role not only to ensure political stability and institutional revamp but also to guarantee regional peace and security.
Aside from the distinct challenges of financing “sunk” and “fixed” costs amid the historic debts and chronic losses, another significant constraint is the lack of appropriate technology in the implementation of energy productivity policy. Pakistan needs to stay abreast of high technology to harness its renewable energy resources and materialize its energy efficiency goals. There are studies that talk about technological impoverishment of Pakistan. Technological penury is one prime reason why Pakistan has not been able to capitalize on its high abundance of renewable energy potential. The lack of technological knowhow also helps to explain why non-hydro renewables currently account for less than 4 percent (roughly 900 MW) of total installed electricity capacity against the medium-term plan of having a minimum capacity of 9,700 MW by 2030. Given this, the role of technology transfer in developing renewables and adopting energy conservation is worth exploring.
To sum it up, I promote an alternative approach of energy productivity policy that not only redefines energy efficiency, but also includes it along with an emphasis on renewable sources to address energy crises in Pakistan. Concerned ministries would have to be cognizant of the conditions in the energy productivity policy that would ameliorate power blackouts. For successful implementation of the policy, the government would have to ensure that regulatory agencies coordinate their efforts with power companies to improve energy distribution, generation, and transmission. Undoubtedly, the government would show its firm resolve in promoting energy productivity reforms and eliminating constraints to effective energy productivity policy implementation. Only then the nation will witness an “energized” homeland, healthy environment, improved economy, and, ultimately a better quality of life for all citizens.
Muhammad Salar Khan is a Ph.D. Public Policy candidate and graduate research assistant at Schar Scool of Policy & Government, George Mason University. He tweets at @salarppolicy