Addressing the energy crisis for sustainable development
The growing energy supply deficit has an adverse impact on business and industrial activities, consequently hampering the economy’s march towards growth and prosperity

By M. Osman Ghani

Along with the menace of terrorism, rampant corruption and uncontrollable price-hike, the nation is witnessing an acute energy crisis that is likely to aggravate in the coming years. It has landed the economy in dire straits and poses a threat to the socio-economic fabric of the country.  The growing energy supply deficit has an adverse impact on business and industrial activities, consequently hampering the economy’s march towards growth and prosperity. 

The energy crisis has compelled a large number of industrial units to close down all over the country, particularly in Punjab, due to disruption in gas supply and prolonged load-shedding. Motor car owners have no option but to stand and wait in long queues for hours, at CNG stations, to fill their gas cylinders due to gas load-shedding.

Energy is an indispensable need not just for the maintenance and development of human life but also to generate sufficient economic activities. The country is presently facing a daunting task to meet its soaring energy demand that is likely to double in the next 10-15 years. Pakistan is among those developing countries where the need to tackle the energy challenge is the greatest. Therefore, ensuring the availability of usable and affordable energy forms the core of the country’s current and future problems. In recent years, the energy demand has surged sharply owing to rise in population and trade activities.  The supply of energy, on the other hand, has remained far too short to match the mounting demand because the existing resources could not be sufficiently explored and exploited.

The shortfall of electricity becomes more severe during summers. However, this winter was no different.   Power outages last for 3-4 hours in major cities and 12-14 hours in far-flung areas during the peak summer season.  Consumers face many hardships on account of perpetual power failures and above everything else, sky-rocketing prices of electricity. Shut down of a large number of industrial units have the following implications:  (1) an increasing number of regular employees and daily wage earners are deprived of their only source of income, hence they are pushed into the vicious circle of poverty;  (2) the government is deprived of a big chunk of tax revenue due to shrinking of important revenue sources,  namely industry, business and trade;  and (3) declining volume of foreign exchange earnings as the capacity of producing surplus export goods, especially by the textile industry, is adversely affected.  A clear manifestation of the shocking reality is that during the first four months of the current fiscal year the overall large-scale manufacturing growth was down by 2.07 per cent, compared to a growth of 0.67 per cent in the same period last year. If the ongoing energy mayhem is not tackled promptly and effectively, through both short and long-term measures, the country might have to pay a bigger price for it in the near future, in the shape of rising unemployment and revenue shortfall.

As per some latest reports the country’s overall power shortage at peak hours has exceeded 4,770 MW, causing on an average load-shedding of over 10 hours, mainly on the back of closure of 24 thermal power plants and a substantial reduction in hydropower generation. The latest upsurge in terrorist attacks on natural gas pipelines in Balochistan may further complicate the energy crisis, if not tackled urgently through prudent measures. Besides the textile industry is passing through a difficult phase due to severe energy shortage in the country.           

Presently, electricity demand per day could exceed 20,000 MW if all the consumers are provided uninterrupted supply. The per day electricity demand will surely surpass 30,000 MW by 2020 if the present trend of annual electricity demand continues.  To fulfil the widening gap of supply and demand, curative measures need to be undertaken including expeditious completion of the ongoing hydro and thermal power projects, and conservation of energy.  Pakistan is currently facing about 600 mmcf natural gas shortfall. According to official estimates, domestic gas demand would increase to 6.8 bcfd by 2015. Importing energy from Iran and Central Asia along with developing indigenous sources, such as hydel, coal, waste, wind, and solar power, as well as other alternate and renewable energy sources are the viable options to meet future energy demand. In addition, more nuclear power plants for production of energy need to be undertaken. If the country wants to speed up its economic development and improve the quality of life of its people, it has to take serious steps towards framing a coherent energy policy.

The policy makers should have foreseen the rising demand of energy during the period of strong economic growth, especially in the first decade of this century. However, Pakistan can now meet its surging energy demand with the help of friendly countries like China. China, having a vast experience in developing and modernising various sources of energy, can help the country to overcome its energy deficiency. China also appears to be willing to help Pakistan and invest in its ailing energy sector.

As a result of the recent visit of Chinese Prime Minister, Wen Jiabao; economic cooperation between Pakistan and China will be further accelerated. The two countries have expressed their determination to further cement and deepen their strategic and bilateral partnership. China is ready to undertake heavy investment in various sectors of the country’s economy ranging up to $30 billion.

Investment in the energy sector by Chinese companies is one of the priority areas. The energy cooperation mechanism between Pakistan and China should be firmly established to push forward Chinese assistance in conventional, renewable and civil nuclear energy of Pakistan. This support in Pakistan’s energy sector will no doubt be very helpful for the country and its vast populace, as China has a rich experience in effectively exploiting its energy resources than many other countries in the world.