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Energy Crisis in Pakistan: a detailed study of How, Why, What and When


Group 1

Ahmad Anwar (L15-4361),


Muhammad Muneeb (L15-4009),

Sandeel Hussain (L15-4236),

Usman Abbasi (L15-4068),

Hassan Akmal (L15-4078)


Energy, its availability and accessibility are of indispensable importance in today's world. Water and energy security of a country define its future. When demand for energy exceeds the production, the public has to suffer the wrath of power utilities in the form of rolling blackouts colloquially referred to as load-shedding. We have come to rely heavily on energy in general and electricity in particular in our daily lives. Without access to electricity, our lives become markedly difficult. For example, the summer months are already brutally hot in Pakistan and no access to fans or air conditioning makes the heat unbearable. Factories and manufacturing sector suffers a lot of loss when the power goes out unexpectedly. Such units are unable to work at full capacity and subsequently have to lay off daily wage labor due to lack of available work.

Our country's economy is primarily an agriculture-based one. An estimated 60-65% of our population is directly or indirectly associated with agriculture. Water is one of the most important inputs to agriculture. However, farmers are the worst hit sector when it comes to load-shedding. Punjab, being the most populous province and also the breadbasket of the country, is worst affected. Some farming towns suffer up to 22 hours a day of blackouts in May and June. Since the availability of river water is dependent on both luck (e.g. one's lands are located close to a canal or some other water channel) and might (e.g. bigger landowners blatantly steal smaller landowners' water) farmers use tube wells to make up for the difference in water demand and supply. In the absence of electricity to run these tube wells, the agricultural productivity of farmers is significantly dampened and they have to use expensive diesel-powered pumps to supply water to their crops. This increase in costs of input is detrimental to the agricultural productivity per acre and is passed onto the consumer. Resultantly, the entire country and its economy suffer as a whole.

All hope, however, is not lost. With good policy making by our government, its rigorous implementation by the relevant departments and timely investments in renewable energy can lead Pakistan out of these dark ages into a time of cheap, readily available energy that can certainly prove to be a harbinger of massive economic growth and betterment in the quality of life of all its citizens.

Causes of the current crisis:

Before we dive into how to address the problem, let's first point out the reasons we are in this mess in the first place. This is done purely as an academic exercise so that mistakes of the past can be avoided in the future. There are a multitude of causes of the crippling energy crisis in Pakistan. Some are unfortunately God-gifted but most are brought upon by our own actions or lack thereof.

1. Lack of a National Energy Policy and its implementation:

The policies enacted by successive regimes in Pakistan have been very shortsighted.

Not a single elected government has had the common sense to look beyond their 5-year term. With the exception of Gen. Ayub Khan's term, no major (GigaWatt range) electricity projects have been added to the national grid. Hence, taking the massive growth of population size, need for more renewable energy projects or moving towards smart grid systems has evaded most government officials.

If, by some stroke of luck, a government does come up with a comprehensive energy security policy, its shoddy and incomplete implementation creates more problems.

2. Lack of government regulation/oversight:

Governmental oversight of the many organizations that are tasked with providing energy to the people is lacking. This results in ineffective policy implementation and poor results. For example, under pressure from IMF, the Water & Power Development Authority was broken up in many smaller companies that can be divided in three broad categories: Generation companies (Gencos), Distribution companies (Discos, e.g. LESCO, MEPCO, etc) and the National Transmission & Dispatch Company (NTDC). While the bulk of electricity produced in Pakistan comes from government owned hydroelectric power plants Tarbela and Mangla, a good percentage is also procured from private generation companies (known as Independent Power Producers). NTDC is tasked with distribution of electricity all over Pakistan. Each major division has its own distribution company (total of n companies). Ineffective coordination and criminal lack of governmental oversight has lead to a massive debt amounting to PKR 500 billion within this chain of suppliers, distributors and consumers. For example, NTDC sells power to DISCOs but the latter delay payment of dues. This in turn leads to the NTDC being unable to pay the Gencos and IPPs. This results in the Gencos being unable to pay back Oil Marketing Companies like PSO for the purchase of Furnace Oil and Diesel to run their power plants. In order to keep this diseased and inefficient supply-chain afloat the government has to pump in hundreds of billions of rupees to ensure solvency of all SOEs. However, we won't be in this mess in the first place if we had strong checks and balances in place to govern, guide and promote our power sector.

3. Massive Population Size:

Chief among the causes is explosive growth of Pakistan's population. With a population greater than 200 million people, the government has to prioritize the needs of country. With a major chunk of our budget (up to 80%) allocated to our Armed Forces to counter the existential threat from our archenemy to the East, whatever meager resources are left have to go towards running all other sectors of the state machinery. Hence, tackling the electricity crisis or providing better healthcare or improving the standard of education is not at the top of the government's list of priorities.

4. Dearth of Technical Expertise:

There is a marked lack of scientific and technical expertise in our country. Of the small percentage of students who complete an undergraduate degree, only a select few go on to pursue advanced degrees in technical fields. An even smaller percentage of those people stays back in Pakistan to work on coming up with indigenous solutions to our myriad problems. Case in point: a small team of scientists led by Dr. Samar Mubarakmand has been trying to convert the massive coal reserves in Thar into natural gas for the past few years. Without proper funding, industrial equipment and rigorously trained scientists, progress has been elusive for Dr. Mubarakmand's team.

Similarly, take the 969 MW Neelum-Jehlum Hydropower Project that is under-construction in Azad Jammu Kashmir in Pakistan. The majority of the technical staff leading the project is foreign with Chinese contractor leading the civil and mechanical construction work, whereas the project management services are being provided by a consortium of companies from USA and Norway.

5. Inefficient grid, appliances and theft:

All the problems discussed above are confounded by an inefficient power grid system. While many countries in the West are moving towards Smart Grids that anticipate demand for power at different times of the day, month or year using Big Data and bring backup power systems online at peak times, our grids and the technology powering them is antique by comparison. There are huge power losses in transmission lines from the HT lines to the 11kV lines that are strung outside in our neighborhoods.

Our middle and upper-middle class uses disproportionately large amounts of power as compared to the working classes. The reason for this difference is the increased use multiple air-conditioning units per family during the summer months. The proverbial cherry on the cake is the widespread theft of electricity in all parts of country. This theft of electricity is done in connivance with the power utility officials. As a result, every citizen who doesn't steal electricity ends up unwillingly subsidizing such power thieves.

Impacts of the Energy Crisis:

It goes without saying that the huge shortfall in supply and demand in Pakistan has an overwhelming negative effect on the country and its citizens. First and foremost is its impact on the quality of life of people from all walks of life. For example, power cuts in scorching summer heat lead to horrible living conditions. People are unable to get a good night's rest in such conditions and their work performance is negatively affected.

Power cuts during the daytime are devastating to all manufacturing units, agriculture, office workers and students alike. The net effect is the loss of millions of man-hours that could have been spent productively. The country's economy and hence its GDP is the biggest loser in all of this. All of these combine to reduce the economic growth rate, increase expensive imports and vaporize the disposable income of working class citizens.

Those who can afford backup power systems such as petrol or diesel powered generators and battery powered Uninterruptible Power Systems (UPS) switch to such systems during loadshedding. Although a temporary fix, such backup systems are also a drag on the economy in the form of increased imports of gensets, UPS and batteries. The fuel to run these generators adds to oil import bill. These backup power systems have an added environmental cost in the form of noise pollution, smoke from gensets and several toxic heavy elements from lead-based batteries.

Foreign Direct Investment in the industrial sector is extremely hard to come by when one of the most important inputs to production, that is, energy, is so hard to come by. No wonder FDI in our country has decreased from a maximum of PKR 5,152 billion to less than PKR 3,000 billion in late 20101. Not having a steady supply of power greatly affects our outlook as a country aspiring to be an Asian tiger.

SWOT Analysis of Pakistan's Energy Crisis:


• Natural Resources of Pakistan:

Pakistan is a rapidly developing country in the present world. Allah has blessed it with a lot of natural resources e.g. water, solar energy, wind energy, coal, natural gas and petroleum.

• Hydropower:

Allah has blessed Pakistan with five rivers. The water from these rivers is used for irrigation and electricity production (still limited because of less number of dams). The production of hydroelectricity in Pakistan is providing twenty nine percent of the whole energy used in Pakistan. All hope is not lost, however. We can turn this crisis into an opportunity to take on our unique challenges head-on with equally unique and innovative ways. Pakistan is blessed with a large hydroelectric power potential to the tune of 50,000 MW2. The varied topography of the country that spans sky-high snow-clad mountain ranges in the north like the Himalayas and the Karakoram to vast plains that are home to the majority of agriculture sector is a blessing in and of itself. By aggressively working on exploiting the hydel potential in AJK, Gilgit Baltistan and KPK using a mix of mega-hydel projects like Diamer Basha Dam (4500MW), Dasu Hydropower Project (~4,000MW) to middle-sized dams (quote examples) to micro-hydel projects that are enough to power a small village, we can successfully produce cheap electricity to meet our needs. Besides, building large multi-purpose dams like DBD and Kalabagh Dam also help control floods and the destruction that follows them in addition to providing us with large water reservoirs that we can use to irrigate greater areas of land for our crops.

• Solar Power:

Out of twelve, eight months sun remains on this land and therefore solar energy can be used to produce solar power as it is very popular and renewable energy resource. We can also seize upon this opportunity to diverse our energy mix and move towards incorporating utility-scale solar and wind power stations into our national grid. Countries like the Netherlands and Germany are excellent role models in this regard. Last year, during summer months in Germany, half of all electricity produced came from renewable sources like solar and wind.3 Imagine a Pakistan that does not rely on foreign oil or natural gas and is solely powered by indigenous sources: hydroelectric, solar, and wind among others. While Pakistan is only focusing on one 100-1000MW solar power plant in the form of Quaid-e-Azam Solar Park in Bahawalpur, India has already added several thousand MW in solar capacity to its grid in the past few years. We need our own version of Jawahar Lal Nehru Solar Mission in Pakistan if we are to emulate and compete with our neighbor.

• Wind Power:

Wind power is also a renewable and cheap source of energy. The coastline of Pakistan extends 1050 km. 250 km falling in Sindh province and 800 km in Baluchistan. The wind that blows on the coastline of Pakistan can be used to run the wind turbines to produce wind power. According to multiple studies Pakistan can produce several thousand MW of energy from wind.

• Energy by using non-renewable resources:

Pakistan has large resources of coal that can be used for the production of energy.

“Pakistan has emerged as one of the leading countries - seventh in the list of top 20 countries of the world after the discovery of huge lignite coal resources in Sindh. The economic coal deposits of Pakistan are restricted to Paleocene and Eocene rock sequences. It is one of the world's largest lignite deposits discovered by GSP in 90's, spread over more than 9,000 km2 comprises around 175 billion tones sufficient to meet the country's fuel requirements for centuries.”5

 Energy can also be produced by using the petroleum and gas. As discussed earlier, we should also focus on utilizing Thar coal reserves to diversify our energy portfolio and set up local coal-fired power stations.

• Energy by using Biomass:

Energy can also be produced by making small power plants that will run on biomass and by burning of the waste materials. The developing countries like Brazil and USA are also making programs to produce energy by this method. As Pakistan is an agricultural country and it produces sugarcane, corn or other vegetation, therefore it can use these renewable sources or its garbage for the production of power.

• Nuclear Energy:

In order to fulfill the short to medium-term electricity demand, Pakistan should also set up large Nuclear power plants on the pattern of Chasma I, II and Kanupp.4 Our country's nuclear technology is mature enough to provide enriched uranium as fuel for the nuclear power plants. Hence, the potential of nuclear power should not to be overlooked.

Weakness & Threats:

Our power sector and its turnaround are plagued by multiple weaknesses that, if left unattended, can result in a further deterioration of the sector. Chief among the inherent weaknesses is the lethargy of all tiers of government from elected representatives to bureaucracy. The manifestation of that lethargy and inaction is non-existence of a comprehensive energy security policy. If policy-making is virtually non-existent, how can we expect implementation of any policies? Misplaced priorities of the state as evident from extravagant spending on infrastructure projects such as the recently started Orange-line Metro train in Lahore to the tune of US$1.5 billion are major threat to energy projects in Pakistan.

To add insult to injury, our elected governments are in habit of undoing the good policy decisions of their predecessors so as to avoid any sharing of credit. Case in point: the troika period of 1988 – 1999 that saw consecutive governments of Ms. Benazir Bhutto and Mr. Nawaz Sharif were marked by bitter infighting as each blamed the other for orchestrating their government's premature dismissal. Hence, any policies that were in the greater good of the country and its population were needlessly sidelined so as to discredit the previous regime. This is a vicious cycle where the net losers are the people of Pakistan.

Corruption at all tiers of government is a hallmark of our state machinery. This widespread corruption prevents the state from expeditiously executing major power projects. For example, Diamer Basha Dam that was inaugurated during Musharraf's time, was later again “inaugurated” by PPP-led government.6 It has been more than 10 years since the first inauguration of the project and still procurement of land for the dam site is in progress. This goes on to show that either our government is grossly incompetent, unpatriotic or just doesn't have the vision for an energy self-reliant Pakistan. Devolution of certain powers to the provinces in the light of the 18th Amendment to the Constitution has dealt a deathblow to major projects. The Federal government is disinterested in financing and building mega-dams, as energy has now become a provincial subject. In the same vein, mega-dams take around 10-12 years of continuous work to complete. Successive civilian governments mostly take up and execute projects that they can complete during their own term so that they can reap maximum political mileage for the next elections. The result is costly, privately-owned IPPs that sell electricity to the government at obscenely high rates ($0.18 to $0.20 per kWh).

Another weakness that is exploited to the fullest by our enemies is the lack of consensus and internal bickering among our provinces. Kala Bagh Dam (KBD) that was to be built in southern Punjab has been the victim of this internal strife. While a majority of technical experts agree that KBD will serve as an excellent flood control reservoir in addition to producing cheap hydel electricity, some unsavory politicians from Sindh and KPK fiercely oppose the project. Sindhi politicians reason that KBD is a ruse by Punjab to steal the legitimate water share of Sindh from Indus river. This is utter nonsense because almost every year torrential rains and the floods caused by them wreak havoc in southern Punjab and most of Sindh. A mega-dam like KBD will of tremendous help in controlling the flow of water in Indus river. Politicians from KPK vociferously claim that building KBD will flood the city of Nowshera in KPK without any technical proof of their ridiculous claims. Balochistan is opposed to KBD project solely out of fraternity for the two “smaller” provinces opposing the perceived Punjabi threat of domination. Henceforth, the planning and execution of mega-dams such as KBD has been rife with political bickering, provincial nationalism and an utter disregard for supreme national interest.

As mentioned earlier, the nonpayment of outstanding dues by various State-owned Enterprises (SOE) results in the build-up of Circular Debt where every SOE owes some other SOE money. An often-overlooked part is the low rate of recovery of electricity dues by various Distribution Companies. For example, parts of Karachi – the nation's financial capital – such as Layari, Sohrab Goth, etc, have very low percentage of people who pay their electric bills. Similarly, many parts of FATA have abysmal electric revenue collection. Without improving revenue collection, the dream of turning the power sector around is not going to become a reality any time soon.

Opportunities & Recommendations:

This quagmire Pakistan finds itself in presents us with some unique opportunities to right the many wrongs. These are explained as recommendations below:

i. We need to rigorously explore all possible sources of energy including renewables such as hydel, solar, wind, geothermal, biomass and tidal to non-renewables such as nuclear, coal and gas-fired power plants to meet our energy needs.

ii. Special attention needs to be given to improve local Research & Development facilities to come up with indigenous solutions to our problems. For example engineers pursuing advanced degrees (such as at doctoral level) should be tasked with coming up with novel solutions to our energy problems.

iii. Appointing highly qualified people to the positions of Ministers, heads and higher management of Public Sector Enterprises such WAPDA, DISCOs, GENCOs, etc. should be a top priority of the government. The salaries of such people should be tied to making the respective PSE profitable and reducing the line losses to internationally acceptable limits.

iv. Investments in local production facilities of renewable energy should be made so that we can fully benefit from the mature solar photovoltaic energy industry that has experienced phenomenal growth in countries like China, Japan and Germany.

v. This is an excellent opportunity for us to plan and build a Smart Grid that has multiple redundancy and interconnection built in.

vi. A comprehensive campaign the masses about energy efficiency and conserving as much power as possible should be undertaken.

vii. People who switch to renewable energy such as roof-top solar and wind power should be subsidized by the government or rewarded in other ways in the form of tax breaks. A comprehensive Feed-in-Tariff policy such as that implemented in most of the EU that enables people to sell excess energy produced by their roof-top solar or wind plants back to grid would provide the much needed impetus to people to readily adopt these technologies.

viii. Energy efficiency at the household level can also be kick started by following in the footsteps of Internet of Things (IoT) and smart, inter-connected electronics, for example, the smart thermostat produced and sold by Nest, Inc. (a Google subsidiary). The beauty of IoT electronics is that these appliances use the power of the Internet to accurately predict ones energy usage, switch off superfluous lights, fans and air-conditioning to save energy when no one is in the room. Similarly, just by including a Light-Dependent Resistor (LDR) sensor in streetlights would enable them to automatically turn on at dusk and turn off at dawn. Such seemingly small energy savings quickly add up.


If sincere attention is paid to the energy sector in Pakistan and the afore-mentioned recommendations are implemented in letter and spirit, there is no doubt that Pakistan would be energy secure country. Achieving energy security would give a much-needed boost to our economy through increased industrial production and better quality of life for all our citizens. It is incumbent upon all of us to force our elected representatives to raise these issues at National Assembly and Senate so that a broad-based consensus on our energy policy can be built. That should be followed by a ruthless and swift implementation of the policy recommendations at all tiers of the government.


1. AND Country Wise FDI Inflows ($ Million)

2. Pakistan can produce 150,000MW of wind energy.


3. Germany produces half of energy with solar Source:

4. China to build 2,200 MW N-power facility for Pakistan. Source:

5. Wikipedia article on Thar Coal



7. Construction work on Bhasha Dam yet to start


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