Engr. Imran Zafar, Business Leader | Honorary Secretary IEEEP Karachi Center Senior Member IEEE USA | 100 Best CEOs of Pakistan | CEO Enercon Systems International
Pakistan’s contribution to global carbon emissions is only 0.52%. Despite low emissions, Pakistan is one of the most affected countries due to climate change. We have seen floods, rains, heat waves, and troubled weather patterns.
Commitment to Climate Action: The Paris Agreement
Pakistan has signed the Paris Agreement and is committed to combating climate change. This agreement demands that Pakistan reduce its emissions and achieve a level where emissions can be absorbed naturally by trees, soil, and oceans. This is also called NET ZERO.\
Economic and Energy Interrelation
Our Energy consumption is 50% for domestic and 25% for industrial use, unlike other stable economies.
Our imports are 60-80bn USD while we barely export 30-35bn USD.
Both the Economy and Energy are inter-related, we need more local industries and more exports but already our industries are closing down because of high Energy tariffs.
Today, Pakistan’s installed capacity is 46GW while the peak load demand in summer touches to 31GW while in winter it dropped to 10 ~11 GW, mainly due to a shift in domestic consumption patterns.
The Energy Crisis Timeline
The energy crisis erupted in the ’90s, early 2000, and around 2014 when severe load shedding put extreme pressure on the ruling government. Instead of a long-term holistic approach, every time Govt opted for solutions that provided the quickest relief to the public from load shedding and saved its vote bank and tenure.
Short-Term Solutions and IPP Contracts
The new power plants were added to the Grid through the private sector and government-owned investment via IPP contracts using imported furnace oil, imported coal, and Natural Gas, which were later converted to Imported LNG.
Captive Power Plants and Industry Shift
In addition to IPP Plants, Govt also allowed industries to set up their own Natural Gas based captive power plants in the late 90s / early 2000. Industries were able to produce 400% times cheaper power than Grid and all major export / non-export industries were shifted to own captive plants and cut off from Grid. Currently, we have around 4GW of captive power plants installed in the country.
Solar Power’s Impact on the Grid
Without contradicting the fact that solar is clean energy and is an alternative to burning fossil fuels, we are just looking at the impact after its addition to the Grid.
Only in 2024, Pakistan has imported a whopping 17GW of solar panels mostly for the consumption of these two sectors, and in past years, Pakistan has imported 5-6 GW of solar panels per year.
Grid Demand, Revenue Decline, and Circular Debt
While on the one side Grid demand & revenue were decreasing due to the above-mentioned reasons, in addition, govt own distribution companies were not able to recover payments from their consumers.
As a result, the government was unable to make payments to IPPs, and the cascading effect caused power-generating plants to suffer cash flow and were unable to pay Oil & Gas companies resulting in a circle of nonpayment or circular debt.
Current Energy Tariffs Breakdown
Today tariff for industries is around 43 rupees per KW while it is around 48 rupees per KW for residential consumers above 700 units, It is not simple to understand that composition but the govt determines the tariff considering the:
Variable fuel cost generation cost (incur as per usage)
Capacity payments to IPP (fixed amount to pay whether govt use their power or not),
Cost of distribution & losses
Cost of circular debt.
Govt taxes
How can Government Increase Its Grid Utilization with Productive Industrial Consumption?
Due to uncertain Natural Gas / Imported LNG availability in the future, many industries with more than 5MW load are ready to shift to Grid power. But as per NEPRA regulations, all bulk consumers who have load demand of more than 5MW need to install a 132kV substation. The high cost of a 132kV substation, installation time, and space requirement deny the possibility of a Grid connection.
Potential Solution: Using 11kV Lines for Higher Loads
There is no technical obstacle in giving 15 or 20MW power to any industry on an 11kV line using multiple 11kV feeders.
Industries, Consultants, and engineering institutions should work together to amend the NEPRA clause of the above 5MW Grid requirement and permit more than 5MW to any industry in today’s circumstances where the Grid is not feasible due to a variety of reasons.
The Role of CBTCM in Improving Power Trading
NEPRA has initiated CBTCM (competitive Trading Bilateral Contract Market) where initially 1MW or above consumers can buy electricity through any supplier connected to the transmission network anywhere in the country by paying transmission line chargers/wheeling charges.
However, the above concept of CBTCM would not be beneficial until our transmission line is good enough.
Solar Expansion: Impact on Grid Utilization
Secondly, the government cannot stop the installation of solar panels by industries, and residential & commercial consumers. Even if it does not offer Net metering, the expansion of solar will continue.
What is the Solution Then?
Progress in Battery Development
A lot of R&D has been done in battery technology. Initially, batteries were aimed at EVs as many countries have set a target to replace 100% conventional cars with EVs. However, like solar, battery prices have significantly reduced due to economy of scale production, and the trend will continue in coming years.
Mandatory Battery Storage for Grid Stability
So, Govt should make it mandatory condition to install battery storage systems along with solar systems for all industries and residential customers so that they operate isolated from the grid for 24 hours or are only allowed to consume a certain capping load from the grid.
How can Government Turn Around Its Energy Mix to Combat Climate Change?
Govt of Pakistan has set a target by 2030 to produce 30% of power generation through solar, wind, and small hydro projects. In addition, 30% of power generation comes from large-scale hydropower projects above 50MW.
Hydel, Wind, and Solar Potential
Thanks to hydel, wind, and solar potential in Pakistan, it is possible for us to increase our renewable share in the future. Out of 46,000 MW installed capacity, 28,000 MW almost 60% contribution is from thermal power.
There are several DAMS under construction which will add approximately 12,000 MW capacity by 2029.
The wind potential of Pakistan is 50,000MW. The Solar contribution at the utility-scale through IPPs is only 880 MW out of 46,000 MW installed capacity.
Nuclear Power: A Limited Option
Nuclear power generation is not classified as renewable and clean energy. Although the process does not require continuous burning of fuel like in fossil fuel plants, there is a risk associated with it that if it is mishandled could be dangerous for our atmosphere and mankind.
Replacing Imported Fuel-Based Thermal Plants
The government’s goal should be to close and replace thermal power plants running on expensive imported fuels, yes coal-based generation is dirty and we are 100 years behind the world in exploiting and utilizing this mineral resource, however considering our poor economic condition, the clever choice would be to use it and increase plantation and renewable energy share to achieve a combination which is economically viable and climate-friendly.
