Electricity Sector In Pakistan: The electricity sector plays a key role in the economic development of Pakistan as it determines the level of industrial activities, domestic utilization as well as it contributes in GDP. Electricity sector in Pakistan was poised for diversification with a mix of hydel, thermal, fossil fuel and now additional renewable sources of energy. This article aims to discuss the current position of electricity sector in Pakistan, its issues and further opportunities for expansion, particularly in renewable energy.
Current Energy Mix
The electricity sector in Pakistan is diversified in terms of thermal (coal, gas, oil), hydropower, nuclear and renewable (solar, wind) energy sources. More than sixty percent of Pakistan’s power generation is derived from thermal sources, most notably natural gas and imported fuel oil, which is Ported. Hydropower makes up the second highest share of the national grid by approximately 25%. However, the fact that electricity in Pakistan mainly relies on costly and imported fossil fuels that are of the same time hazardous to the environment presents a threat to the stability and affordability of the electricity in Pakistan.
The renewable energy sector in Pakistan is developing, but it is still trailing behind the world. Currently, hydropower sources are the largest contributor in the energy mix, and then we have the fossil fuels and the clean energy sources; they are less, but they have huge potential. Despite Pakistan being on track with its targets of Alternative and Renewable Energy Policy 2019 in achieving 20 percent of renewable energy capacity by 2025 and 30 percent by 2030, the actual share of renewable energy in the total energy consumption of Pakistan is still very low.
This can enhance the energy mix, alleviate the increasing import of fuel needed, and therefore enhance energy security.
Challenges in the Electricity Sector
The electricity sector in Pakistan consists of several headaches that cripple its efficiency and expansion potential:
- Circular Debt: The circular debt, which stands at more than $10 billion now, is one alarming issue. Deficits in the collection process of the power distribution companies lead to the emergence of a circular debt, which in these circumstances builds up to over a trillion. These deficits lead to a debt cycle that ails the business operation of the power generating stations and does not encourage more funds venturing into the sector.
- Inefficient Distribution and Transmission: Transmission and distribution (T&D) networks suffer from technical as well as comparatively large shares of political and economic losses. As of today, Pakistan’s T&D losses are about 18%, while the average losses on a global scale stand at about 8%. This not only wastes electricity but also raises up operational costs that consumers end up paying.
- Poor Maintenance of Structural Facilities: Obsolete infrastructure, particularly in distribution & transmission, is a major obstacle in transforming the efficiency levels. Many of the existing thermal power plants are quite old and operate with old generation technologies, which results in low levels of efficiency but high emissions.
- Dependence on Imported Fuels: Burnt Fuel imports, which involves energy security in Pakistan without domestically sourced raw fuels for power generation, is at international market trends Most notably the oil crisis or the increase of natural gas in liquid form, which indirectly influences an increase in the rates of electric power tariffs, which resonates negatively to the citizens and the economy.
Government Initiatives and Reforms
- Power Sector Reform Plan: To tackle the aforementioned situations, the government of Pakistan and several other partners are undertaking numerous reforms and policies for improving the efficiency, sustainability, and reliability of the power sector. The purpose of these reforms is to ensure financial discipline and invite private funds.
- Renewable Energy Expansion: As World Bank recognizes, Pakistan has a large horizon for solar and wind energy expansion and suggests expanding these resources to 30% of the total electricity generation capacity by 2030. More specifically, utilizing renewable energy sources would lead to lower levels of costs for consumers, improved energy security, and a decrease in greenhouse gas emissions. This could also facilitate a reduction of Pakistan’s fossil fuel expenses by over $5 billion in the next two decades.
- Investment in Transmission Infrastructure: It was further noted that both the national, through its T&D sector, and its multilateral partners, including the Asian Development Bank (ADB), are actively making investments in the process of enhancing the transmission system of Pakistan. The Matiari-Lahore transmission project and the CASA-1000 project are, for example, some of such huge undertakings to enhance the transmission line’s efficiency.
Future Directions: Embracing Renewables
With all these measures geared towards the development of natural resources in focusing on energy supply, it is critical for Pakistan to increase further the share of renewables. Still, there are possibilities of utilizing more potential sources of energy, such as solar and wind. The World Bank has cited that utilizing even 0.071% of Pakistan’s land for solar photovoltaic (PV) power generation system could be sufficient to cater to the electricity demand in the country. Similarly, quite a lot of energy can be generated in the wind corridors of Pakistan, especially in the Sindh and Balochistan provinces, where the average wind speeds are windy enough for turbines.
There is a need for Pakistan to concentrate also on commercial competitive bidding systems for solar and wind renewable energy projects, as well as simplifying the regulations affecting such projects and incentives eCamping on both domestic and foreign investors. This would not only enhance the share of renewable energy sources but also contribute to the reduction of electricity generation costs.
Conclusion
The challenge underscoring the reform process of the electricity sector in Pakistan are issues regarding ineptness, high costs and environmental degradation who cannot remain ‘business as usual’. Tagged as the Pakistan Power System, reforms, development of capital markets, modernization of systems, and increasing provision of alternative energy can contribute towards an altered provision of power that is clean, affordable and commonly available to its huge population in accordance with the economic growth. The future is complicated but what is evident is that what is being implemented today will influence the electricity industry in Pakistan.
FAQs
Q1: Which energy sources are widely available in Pakistan?
A1: In Pakistan, thermal energy production ranks the highest and mostly comes from thermal plants utilizing natural gas and imported fuel oil, which accounts for more than 60% of the installed capacity.
Q2: What is the issue of circular debt in Pakistan’s power sector?
A2: Circular debt is the shortage of funds resulting from inefficiencies in the power distribution system that, even as of last recorded at least three years ago, current value exceeds a billion dollars in unpaid dues to power producers.
Q3: To what amount of renewable energy does Pakistan target by 2030?
A3: Pakistan’s target is to achieve a 30 percent share of every clean energy resource produced in the estimated total electricity capacity by the year 2030 through harnessing solar and wind power.
Q4: What are the biggest problems that you can find in Pakistan’s electricity sector?
A4: Some of the key challenges include the circular debt, high losses of power transmission and distribution networks, outdated physical assets, and dependence on costly foreign fuels.
Q5: What actions does the government take in enhancing the electricity sector?
Some policy reform measures include comprehensive reforms that include the tackling of circular debts, renewable energy resource development, modernization of transmission networks, and private investment mobilization.