In a developing country like Pakistan, a reliable, uninterrupted, and affordable energy supply is a fundamental precondition for reducing poverty, encouraging investment, and boosting economic growth. Among other challenges, the newly elected Pakistan Tehreek-e-Insaf government under the leadership of Imran Khan inherits a very stagnant energy sector. Despite broad access to electricity (99 percent of the population had access to electricity in 2016, compared to 59 percent of the population in 1990), the country experiences massive blackouts (load shedding of 6-8 hours a day for households and 1-2 hours a day for the industry). Because of poor energy management, Pakistan’s energy resources have been used inefficiently for decades. As a result, the nation faces a serious energy crisis that has often stymied manufacturing and the service sector and disrupted power supplies in communities and households across the nation. According to a survey by the World Bank, 66.7 percent of the businesses in Pakistan cite electricity shortages as a more significant obstacle to business than corruption (11.7 percent) and crime/terrorism (5.5 percent). In light of these factors, there is an urgent need to innovate in the energy sector of the country.
Fortunately, Pakistan has a high renewable energy potential, which has been elaborated in many studies on Pakistan. A recent report published by USAID attests to Pakistan’s energy potential, stating that it can potentially produce 100,000 MW from solar energy alone. Despite the potential, Pakistan remains “powerless” when it comes to adequately powering lights for its homes, machinery for its factories, and stoves for its kitchens. Data from many sources, including the Ministry of Water & Power and Pakistan Economic Surveys, over the past five years show that Pakistan has been facing an average shortfall of between 4,000-5,000 MW.
This acute energy crisis is a result of flawed energy policies pursued for decades, the high cost of generation, and aging and inadequate transmission, among other causes. In addition to transmission losses and distribution thefts, an entrenched bureaucratic culture marked by poor organization, planning, and project implementation among Pakistan’s power operating companies only compounds the problem.