Experts Discuss Pakistan’s Energy Issues and Solutions

Experts from the energy sector joined the LUMS community for a panel discussion, ‘Radical Solutions to Energy Challenges of Pakistan’ on December 14, 2022. The session was organised by the LUMS Energy Institute (LEI) in collaboration with the Islamabad Policy Research Institute (IPRI) as part of the Grand National Dialogue (GND) by the Prime Minister's Office of Pakistan.

The esteemed panel included Sheheryar Omer, CEO, Petroleum Institute of Pakistan; Naz Khan, Strategic Division Head, K-Electric and Dr. Fiaz Ahmad Chaudhry, Director, LEI. The discussion was moderated by Dr. Naveed Arshad, Founding Member, LEI and Associate Professor, Department of Computer Science, Syed Babar Ali School of Science and Engineering, LUMS.

The session was a thought-provoking discussion on pertinent matters related to energy including the rising electricity prices in the country, how good management can solve energy issues, the reasons for fossil fuel imports amounting to $26 billion and the depletion of indigenous energy resources discovered in the country.

Mr. Omer explained how the energy demands of the country are being met by importing fossil fuels and that with the growing economy, the demand for fuels is also increasing, adding to an already high cost due to the inflated price of the dollar.

Ms. Khan shared the problems faced by K-Electric and said that although the organisation is privatized, it still has to face a lot of regulations and therefore, it can’t set its tariff. “Despite many regulatory challenges, the company has improved its customer service, reduced losses by half and improved bill recovery since its privatization. K-Electric is planning on adding renewables up to 30% of its power generation mix by 2030,” she shared. In response to a question about privatizing current public distribution companies, she replied that nearly all the public distribution companies (DISCOs) are incurring losses because of poor governance, and recovery mechanism and therefore, investors are reluctant to invest in them.

Dr. Chaudhry explained that excess installed capacity is the driving factor behind the growing circular debt in the power sector. “We have failed to increase our base load in the last two decades as the industry hasn’t shown any growth and our base load has increased from 7000 MW to 8000 MW only,” he shared.

To cater to the energy challenges faced by Pakistan, Dr. Chaudhry recommended that there should be a two-part tariff for the consumers. “One tariff should be related to the capacity payment and the other one should be related to energy payments. The refinery policy also needs to be updated,” he added.

The panel recommended that there is a dire need to discover more oil reserves, move towards renewables, and convert gas-based appliances to electric ones. Ms. Khan stressed that the demand side management should be focused upon to decrease the peak load. “Measures like energy-efficient housing, and high-rise buildings can lower the peak demand,” she said.

The panel also took questions from the audience and answered many relevant concerns about imported gas and its high prices, the need to build houses that are insulated to counter extreme cold and hot weather, and how doing our part in energy conservation is of utmost importance right now.