Pakistan’s fossil fuel burden


The country needs to invest in long term clean and renewable energy projects to meet energy demands and fight climate change.

View of Highway, Islamabad

“Pakistan’s contribution to global emission is less than 1 per cent yet Pakistan is the fifth most vulnerable country to climate change”. These were the remarks made by Prime Minister of Pakistan Imran Khan while speaking at the climate action summit 2020. In this summit, he pledged that by 2030, 60 per cent of all energy produced in Pakistan will be "clean", generated through renewable sources.

Since its inception, Pakistan has been an agrarian economy. However, industrial growth also picked up pace with time, especially in the 1960s. During the last two decades, Pakistan has seen spells of economic growth where industrial demand for energy increased significantly. On the other hand Pakistan’s population growth is also a major contributing factor in increased demand for energy.

Power policies to meet power demands

To fulfill industrial and domestic energy needs, successive Pakistani governments came up with energy policies. The Pakistan People’s Party (PPP) government led by Benazir Bhutto in 1994 launched the first power policy to attract independent power producers (IPPs) to meet electricity needs. In 2002, another power policy was approved, which suggested generous agreements including dollar indexation and guaranteed capacity payments, to attract investors, at a time when the country was going through a power crisis and no one was willing to invest. The 2009 power policy failed as the ‘rental power plants’ adopted by the government provided expensive electricity. Soon, power shortages and its price escalation became endemic to Pakistan;  it became a primary issue in 2013 general elections and was also blamed for the electoral setback suffered by the PPP in the polls.

After the elections, Pakistan Muslim League (Nawaz) came into power with the promise to end energy crisis. The PML-N government initiated several new power projects to meet the ever-growing energy demand. China invested 16 billion dollars in power projects under the China-Pakistan Economic Corridor (CPEC) initiative. The PML-N government at the end of its tenure in 2018 claimed it had added 7,000 MW in the system to meet the energy demands. Unfortunately most of these projects consume oil, coal or LNG for power generation.

Pakistan’s fossil fuel consumption history to meet energy needs shows an upward trajectory. The World Bank’s available data reveals that Pakistan’s fossil fuel consumption stood at 35.6 per cent in 1971 and 61.56 per cent in 2014. This percentage was at an all-time high in 2007 when it was 63.05 per cent and main reason for this hike was investment in power projects based on fossil fuels by successive governments.

Pakistan currently generates 64 per cent of its electricity through fossil fuels, with another 27 per cent from hydropower, 5 per cent from nuclear power and just 4 per cent from renewable sources such as solar and wind. In recent years, Pakistan has installed projects to increase the share of renewable sources in its energy mix but still the country is far away from utilising the available potential of clean energy. Despite a number of successful projects, the installed capacity of solar and wind energy in Pakistan stands at over 1,500 MW, which makes 4 per cent of total capacity, equal to around 2 per cent of the total generation.  A World Bank study commissioned in mid-2018 determined that increasing solar and wind energy generation to at least 30 per cent of total installed capacity by 2030 would represent a "least-cost" expansion scenario, resulting in fuel savings equal to $5 billion over 20 years. The steps towards this direction will help increase energy security, and reduce emission of greenhouse gases. It will require Pakistan to install around 24,000 MW of solar and wind projects by 2030, up from just over 1,500 MW today.

Reducing reliance on fossil fuels

Will Pakistan be able to produce 60 per cent of its energy needs through clean and renewable energy sources by 2030 as pledged by the Prime Minister of Pakistan in the climate action summit and can Pakistan curtail its reliance on fossil fuels for energy needs? “Pakistan can achieve this target definitely and can produce 60 per cent of its energy through clean and renewable energy. It needs enduring political will, clear policies and relentless execution” says Gulfaraz Ahmed, former federal secretary, Petroleum. Gulfaraz also served as chairman, Oil and Gas Development Authority, chairman National Electric Power Regulatory Authority, chairman Oil and Gas Regulatory Authority and member, Nuclear Regulatory Board of Pakistan.

Vaqar Zakriya, an expert in energy and environment, shares Gulfaraz’s views adding that Pakistan is moving in the right direction as far as electricity generation is concerned. “Pakistan is focusing on hydropower projects like Dasu Hydropower Project, Keyal Khwar Hydropower Project and Mohmand Dam Project. It will definitely reduce its reliance on fossil fuels for energy needs in the coming days.  Pakistan can achieve this target of 60 per cent clean and renewable energy at least in the power generation sector,” opines Zakriya.

Can big dams and hydropower projects end reliance on fossil fuels?

There are different reasons, which forced Pakistan to rely so heavily on fossil fuels to meet energy needs.  Governments in the last two decades in Pakistan looked for quick fixes to combat the energy crisis. “It takes eight to 10 years to build a dam, (as the evidence suggests in the case of Tarbela dam and Mangla dam), which makes it a less attractive project for political governments as national elections are held after five years,” says Munir Ahmed, a leading energy expert of Pakistan.  

Gulfraz is of the opinion that hydel power is an important source of electricity but is seasonal in nature. “Our rivers receive most water from melting glaciers and most of the water goes to waste. It is imperative to hydel power stations and water storage dams. If all the major hydel dams and power plants currently under execution are completed and commissioned before 2030, it will help us to achieve the declared policy target of 60 per cent of total power coming from clean and green sources of wind, solar, nuclear and hydel by 2030,” he says.

Experts argue such projects boost renewable energy in countries eager to increase their electricity supplies without burning more fossil fuels. However, they meet with fierce opposition because they displace millions of people, flood swathes of farming land and destroy fragile ecosystems. In Pakistan, everybody is not happy with the construction of big dams for these hydro power projects. Plans to build the dams have been the source of tensions between regional provinces in Pakistan for more than 30 years. Starting from Kalabagh dam to now Diamir Bahsha dam, in downstream Sindh province, people and politicians have described the dams as a “water theft”. Sindh has always reservations on the construction of big dams on the Indus river. Activists working against the construction of dams claim that any dam on the Indus river will strip them of their rights to water and decimate downstream water access and quality for farmers and urban centres. Similarly, there are huge concerns about the people who will get displaced due to these constructions. People who got displaced in Mangla dam project are still protesting for compensations and similar is the case with Diamir Bahsa dam affected people.

Politics and its linkages with fossil fuel consumption

Successive governments in Pakistan introduced energy policies to attract investment in the energy sector. However, experts believe that these have contributed to the country’s energy woes instead of resolving them. “With every government, there is a change in policy and it affects investors’ confidence. Renewable energy projects are long term projects and investors want consistency in policies. If you keep changing your policies, who will invest in these projects? So we need to make our energy policies consistent to build the investors’ confidence. Only a conducive environment for investment will attract new investment in renewable energy projects. Otherwise, we will keep producing energy through fossil fuels,” argues Munir Ahmed.

Governments in Pakistan opt for quick fixes to deal with the energy crisis. It takes eight to 10 years to build a dam, but elections are held every five years. Therefore, the governments foresee elections and initiate those projects, which may get them an electoral victory. Power generation plants based on fossil fuels have provided quick fixes to all the governments. “Governments usually look for a quick fix and a term is often used is ‘war footing basis’. This term has been used for the past decades and it leads to short term quick solutions,” says Munir Ahmed.

Dearth of investment in wind, solar and nuclear power

Presently, Pakistan quenches only 4 per cent of its energy needs from solar and wind.Gulfaraz wants Pakistan to introduce policies to facilitate people in installing rooftop solar systems. “Pakistan must introduce policies to facilitate people to set up rooftop solar systems. We must follow the United States where people are incentivised in rooftop solar systems through 30 per cent subsidy and other facilities. Such steps have resulted in an increase in solar power share in the overall energy mix of the US and decrease in the use of fossil fuels there for energy needs,” contends Gulfaraz.

Currently six solar power projects of 430 MW capacity are operational in Pakistan with 16 more solar projects in the pipeline. Why Gulfraz wants Pakistan to focus on rooftop solar systems instead of these big solar energy projects has a very valid reason. In Pakistan, according to him, when you add solar energy in the national grid, there are almost 40 per cent line losses, which render solar power expensive and unaffordable.

Nuclear power is another area where Pakistan can invest to get rid of fossil fuels. According to the National Electric Power Regulatory Authority (NEPRA)’s annual report 2021, presently Pakistan has about 2,612MW installed generation capacity of nuclear power. “Pakistan has a strategic plan to expand its nuclear power capacity to 8,500 MW till 2030 and achievement of this target will definitely reduce Pakistan's reliance on fossil fuels for energy needs,” says Gulfaraz.

He adds that Now Pakistan has access to 1,100 MW Hualong category nuclear power plants, which are safer and more economical. The country need to add four more such plants to achieve the target. “These plants take six to seven years to complete and we cannot delay the start to achieve the target set by Pakistan for cleaner power,” emphasises Gulfaraz.

According to Pakistan Atomic Energy Commission, under Karachi Nuclear Power Plant project, a nuclear power plant, KNPP-3,, with 1100 MW capacity, is expected to start commercial operation by mid 2022. The plant is based on the Chinese ACP1000 design, a Generation-III version of the PWR technology, having advanced passive safety features. Pakistan has a long and emotional history with its nuclear programme. Pakistan is one of the few countries in the world to operate a complete nuclear fuel cycle. Yet, the country needs a significant build-out of electricity generation capacity to meet current and future demands.

However there are safety concerns attached with nuclear power plants operating around the world especially after the Fukushima disaster. Pakistan has always maintained that it is following international protocols and safety standards for construction and operations of its nuclear power plants. It says that even after the Fukushima Daiichi accident, the Fukushima Response Action Plan was formulated for all the nuclear power plants in the country. Under the plan, internal safety reviews were carried out, the design safety of future plants was enhanced, safety against external hazards was upgraded and emergency response programmes were strengthened.

Overhauling Pakistan’s transport system

 Vaqar Zakriya wants Pakistan to focus on its transportation system. “Pakistan’s transportation system is entirely fossil fuels based and it will be impossible to reduce fossil fuel consumption in this system if the government doesn’t come up with policy reforms in the transportation sector,” he says.

The Pakistan government has announced electric vehicle policy and has given incentives on electric vehicle purchase in terms of reduction in tax and import duties. Under the new policy, government interventions are supposed to make imports, production and registration of electric vehicles seamless to achieve an ambitious target of replacing 30 per cent of passenger vehicles on the roads in Pakistan to electric vehicles by 2030. However, experts believe that in the current situation with the strenuous processes of taxation, releasing and registering the vehicles at the port and existing auto manufacturing mafia in Pakistan, large-scale imports and local production of electric vehicles do not seem possible for another three to four years. Pakistan also lacks infrastructure support as far as electric vehicles are concerned. These vehicles cannot be taken out of Lahore, Islamabad or Karachi because of the lack of charging infrastructure in other cities or on motorways. With these hurdles it will be very difficult to reduce fossil fuel consumption as far as Pakistan’s transportation system is concerned.   

What’s next?

Pakistan relies heavily on fossil fuels to meet energy needs. This heavy reliance pattern has developed over the course of 70 years. A country of more than 220 million people and population growth rate of 1.9 per cent, it is expected to grow economically by 3.9 percent in 2021 and by 4 percent in 2022. These two growth rates (population and economic) will definitely put pressure on energy demands in coming years. How Pakistan will cope with this energy demand while keeping in mind its target to meet energy demands through clean and renewable sources? It will definitely require long term and consistent policy actions. Pakistan needs to shed its reliance on short term fixes and invest in long term clean and renewable energy projects not only to meet its energy demands but also fight climate change. Pakistan has taken some initial steps in the right direction but there are still many miles to go.