ISLAMABAD: The Deutsche Gesellschaft fürInternationale Zusam-menarbeit (GIZ), Germany’s main development agency, in collaboration with the Energy Planning & Resource Centre (EP&RC), has developed an Integrated Energy Planning (IEP) model for Pakistan—Pak-IEM 2.0—under the ongoing project “Decarbonization and Digitisation of Power Distribution Networks in Pakistan” (DEDI).
According to a report shared with the Minister for Power Sardar Awais Ahmad Khan Leghari, Pakistan’s energy sector stands at a critical juncture. Rapid population growth, urbanisation, and rising demand for cooling, mobility, and industrial output—combined with heavy reliance on imported fossil fuels—are exerting increasing pressure on energy affordability, security, and public finances.
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At the same time, Pakistan is committed to ambitious climate targets under its Nationally Determined Contributions (NDCs), which require a fundamental transformation in how energy is produced and consumed over the coming decades. Given the long lifespan of energy infrastructure, decisions made today will shape the country’s energy system, investment needs, and emissions profile well beyond 2050.
To support evidence-based, long-term decision-making, the Energy Planning and Resource Centre (EPRC), with technical assistance from GIZ, developed Pak-IEM 2.0 using the internationally recognised TIMES-VEDA framework. The model provides an integrated, system-wide representation of Pakistan’s energy sector, covering all major supply and demand segments. It enables transparent comparison of alternative development pathways and assessment of trade-offs related to costs, investments, energy security, and greenhouse gas emissions.
Experts have developed two key scenarios: the Least Cost Baseline (LCB) and Net Zero Energy (NZE) scenarios.
The LCB scenario reflects a continuation of currently committed policies as of July 2025, combined with cost-optimal technology adoption, without long-term decarbonisation constraints. In contrast, the NZE scenario explores a policy-driven pathway aligned with Pakistan’s climate objectives, targeting net-zero greenhouse gas emissions from the energy sector by 2050.
Under the LCB scenario, Pakistan’s energy system evolves in a relatively cleaner and more efficient direction compared to historical trends. Energy demand gradually decouples from economic growth—projected to grow about 2.5 times by 2050 compared to the 2024 baseline—while final energy demand increases by only 30 percent. Renewable energy sources become the dominant contributor to power generation, reducing emissions from the power sector by around 56 percent.
However, fossil fuels—particularly imported oil and LNG—remain central to the energy mix, especially in the residential, industrial, and transport sectors. As a result, overall energy-sector emissions stabilise rather than decline, leaving long-term climate objectives unmet.
In contrast, the NZE scenario illustrates the scale of transformation required to achieve deep emission reductions across both supply and demand sectors. Electricity generation becomes fully decarbonised after 2040 and reaches net-negative emissions by mid-century through the deployment of bioenergy with carbon capture and storage (BECCS), offsetting residual emissions in power, transport, and residential sectors.
Achieving net-zero emissions requires higher upfront investment compared to the LCB scenario, driven by accelerated development in power generation, grid infrastructure, transport, and industry.
Copyright Business Recorder, 2026
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