Pakistan & Gulf Economist

Alternative energy development in Pakistan

Pakistan with more than 220 million people is an important country in geological and strategic location. One of the most major reasons impacts Pakistani domestic economy is energy development. According to the report of EIA, though the country is the world’s ninth largest shale gas reserves, its electricity supply seriously depends on import, representing 81 percent of power supply from imported petroleum and natural gas.

With the long-time working in restructuring of the energy sector, the government successively improves the production of hydrocarbon and natural gas, alternative energy to tackle the increasing needs and over-dependence on fossil fuel.

Energy situation in 2019

According to official statistics, during 2019 the fiscal year, the national power generation is 12.2706TW/h. The share of oil power generation has dropped sharply while the use of hydroelectric generation, biomass energy, hydrogen gas getting increase.


According to the instructions made by Ministry of Energy, Pakistan’s National Electricity Department needs to improve the proportion of wind and solar energy in the total energy structure to 20% by 2025.

Supply of coal and gas power generation

To solve the power shortage, the government not only pursues multi-alternative energy supply but also focuses on stable power generation from thermal power plants, which are advanced, eco-friendly and economic. Besides, the good news is that oil-fired power plant that use blast furnace oil and high-speed diesel as fuel are gradually being phased out, and their power generation has plummeted by 60% and 96% respectively, leaving only 9092 gigawatt-hours and 31 gigawatt-hours.

Oil-fired power plant is a product of a historical period of low oil prices, and it is full of backward technology, environmental pollution. The generation cost is much higher than that of any energy project of China-Pakistan Economic Corridor, so it does not meet the needs of Pakistan’s economic development and will be further eliminated in the future.

The development of alternative energy

1- By utilizing renewable resources, in 2018 and 2019, hydropower projects generated 32,356 gigawatt hours, representing an increase of 14% over the previous year, and wind power projects reached 3,232 gigawatt hours, an increase of 56%.

2- The World Wind Energy Association said recently that the Cabinet Energy Committee of the Pakistani Government will formally consider formulating a national policy on renewable energy that achieves dual goals. Pakistan’s Minister of Electricity, Omar Ayub Khan, met with the European Union’s Ambassador to Pakistan Jean-François Cautain and formulated the legislative process for the 2030 target one month later. Cautain twitted that this goal is fully in line with the Paris Agreement, which is impressive.

3- Besides, Pakistan is working hard to make a solar manufacturing ecosystem, and companies such as ACT Group have announced plans to build a 1GW photovoltaic module plant. These manufacturers were attracted by the five-year income tax exemption resolution in 2019, and also called on the government to consider other incentives.

Future plans

In order to inspire locals, the renewable energy project includes “a comprehensive skills training program to foster more technical persons, identify more investment opportunities, and prepare projects and mobilize commercial financing,” said Mohammad Saqib, head of the project task force. “In addition, by installing solar photovoltaic systems on hydropower projects, it is expected to increase production capacity and generate greater return on investment.”

In the future, Pakistan will further increase its development of renewable energy. It plans to increase the proportion of renewable energy in power generation to 30% by 2030, and increase the power generation capacity of renewable energy to 8,000 to 9,000 MW by 2025. The major energies that need to development mainly include wind and solar as well as geothermal, tidal, wave and biomass energy.

[box type=”note” align=”” class=”” width=””]The article is written by Vaedy Xiao —  FTM[/box]

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