Navigating Pakistan’s energy transition

Amidst the challenges of soaring energy prices, escalating impacts of climate change, and economic hurdles, Pakistan confronts a complex trilemma encapsulated by the three interlinked challenges of energy, environment, and economy. Presently, the country is grappling with inflated energy costs due to imported fuels, worsening local air pollution, economic instability, and challenges in delivering reliable electricity to a burgeoning population.

This complex interplay of issues calls for deep introspection into major loopholes in the current policy framework and the holistic development of sustainable policies to address the multifaceted crisis of energy, environment, and economy.

An imperative at this critical juncture is a paradigm shift towards a sustainable and indigenous solution through a transition to clean energy for sustainable progress. This pivotal step not only fosters economic growth but also enhances energy security and ensures environmental sustainability.

In the Green Future Index (2023) by MIT Technology Review, Pakistan is ranked 67th among 76 countries, dropping from its 55th position in 2022. The index evaluates the countries across five key pillars: carbon emission reduction, energy transition, green society, clean innovation, and climate policy.

The focus has traditionally remained on capacity expansion rather than conservation, resulting in increased capacity payments and inefficient energy use

According to the World Economic Forum’s June 2023 report on Fostering Effective Energy Transition, Pakistan holds the 107th position out of 120 countries in the Energy Transition Index (ETI), with 46.9 ETI score for 2014-2023.

These indices highlight a lack of sufficient initiatives aligning with the county’s commitment to energy transition efforts, which calls for accelerating its clean energy transition. This not only helps curb carbon emissions but also offers substantial long-term socioeconomic benefits through reduced energy generation and consumption costs.

In this regard, the country needs to strategically shift Pakistan’s energy mix by reducing reliance on imported fossil fuels, prioritising renewable energy, enhancing policy support for renewables, and promoting the local manufacturing of energy goods for greater use of indigenous resources.

This energy transition demands finance mobilisation for developing countries such as Pakistan, fostering both technology transfer and indigenous development.

Pakistan is blessed with huge renewable energy potential to generate clean energy, but the ageing power grid infrastructure with limited network capacity is a major bottleneck to supporting the integration of renewables while maintaining grid stability.

In order to enable the power grid to evacuate power from both renewable and non-renewable energy projects, more investment is needed to upgrade the power network infrastructure, including its modernisation and digitalisation.

Energy storage is also vital for a renewable-powered energy future. It bridges the gap between intermittent renewable energy generation and stable energy demand in terms of energy supply and grid reliability.

Nowadays, batteries have gained considerable ground as they power many of the technologies that will enable the transition towards net zero. Research, development, and infrastructure investments in energy storage are vital for the widespread adoption of renewable energy.

When it comes to electrifying remote regions, decentralised renewable energy systems (off-grid energy schemes, mini/microgrids) are considered to be a promising alternative in pursuit of a sustainable society. They benefit the underprivileged communities trapped in energy poverty.

Energy efficiency has also gained global attention among policymakers in recognition of its pivotal role in enhancing energy security, affordability and environmental sustainability. Addressing Pakistan’s energy challenges also requires a strategic shift towards energy efficiency.

In response to growing energy demand, the focus has traditionally remained on capacity expansion rather than conservation. This approach has led to increased capacity payments and inefficient energy use.

Enhancing energy efficiency presents a significant opportunity to curtail energy imports, offering a cost-effective solution to address national energy challenges. This approach not only mitigates environmental concerns but also eases production costs and fosters economic growth.

The International Energy Agency (IEC) reveals that energy efficiency, the ‘first fuel’ in clean energy transitions, offers swift, cost-effective CO2 mitigation, reducing energy bills and enhancing energy security.

Institute for European Energy and Climate Policy (IEECP) released a recent study, ‘’Out of sight, out of mind: let’s make energy efficiency visible in the energy mix’’. If something isn’t visible, it won’t be prioritised — which is one of the reasons energy efficiency does not come first in planning, policy-making and investment.

For energy efficiency to be considered on a level playing field with other energy resources, energy efficiency improvements need to be monitored, and then energy efficiency data needs to be integrated into the overall energy picture.

The energy transition will also open doors for green job creation, enable businesses, attract foreign investment and stimulate economic growth.

As a climate-vulnerable nation, Pakistan can mobilise substantial global funding under a ‘Just Energy Transition Partnerships (JETPs)’. These partnerships facilitate targeted and catalytic funding, mobilising resources from various channels to support the energy transition.

This requires a comprehensive action plan based on a holistic approach, along with clear targets, timelines, policy continuity, and stakeholder engagement. In this way, Pakistan can pave the way for a sustainable and green energy future.