Better production strategies: Energy sector can save $8bn in next decade: study

ISLAMABAD: A new independent study has revealed that Pakistan's energy sector can save more than eight billion dollars over the next decade by implementing improved power production strategies.

It also highlights how ineffective planning has led to the setting up of expensive and inefficient power plants which are not just burdening consumers with high electricity costs but have also generated, and are increasing, the ever-worsening circular debt crisis.

The study, produced collectively by the Policy Research Institute for Equitable Development (PRIED) and the Renewables First, two Islamabad-based research institutions, explores various alternative scenarios by evaluating the government-prepared Indicative Generation Capacity Expansion Plan (IGCEP) 2022-31.

Muhammad Badar Alam, who heads PRIED, said that apart from flaws in IGCEP’s projections, it will not serve its purpose unless it is accompanied by a similar plan for the expansion of electricity transmission and despatch system.

“Without any expansion in the latter, we have already seen that Pakistan has been unable to utilise a major portion of the electricity generation capacity it has acquired over the last decade,” he said, adding that the inadequacy of this transmission and despatch system is one of the major reasons for frequent power breakdowns in the country.

“Our findings and projections are different from those made in IGCEP 2022-31,” said Ammar Qaseem, a researcher working at the Renewables First.

IGCEP forecasts that the share of wind and solar power in Pakistan's energy mix could only be raised to 30 percent by 2031, he said.

“But our projections point out that this share could be as high as 47 percent by that year,” he said.

Naila Saleh from Agora Energiewende (a German research organisation) said, “With more variable renewable energy than already planned, Pakistan can reduce variable electricity costs by more than 10 percent and lower emissions by some 50 percent in 2030 in most scenarios.”

Ubaidur Rehman from SDPI suggested that if the government considers the decarbonisation of the whole economy by 2050 for the energy sector’s transition, it will not only achieve the United Nation’s Sustainable Development Goal 7 targets but also enable Pakistan to exploit its full potential for emission reduction in the long term.

Umer Farooq from LUMS Energy Institute said that the energy delves into the critical analysis of supply and demand as well as nexus between the renewable energy incorporation and its associated challenges. They highlight how energy-efficient buildings can reduce CO2 emissions and huge financial impact on the country.

Copyright Business Recorder, 2023