Muhammad Mudassar

The sustainable growth of the economy can help Pakistan to switch over to renewable sources of energy, WealthPK reports. The availability of energy and the growth of the economy are interrelated with and interdependent on each other. Pakistan needs sustainable economic growth within a reasonable timeframe. There has been a recent economic rise in the UK, the USA and China. All these countries have focused on their economic growth through energy.

Dr Athar Mansoor, an energy expert, said in a podcast that Pakistan was in the middle of a truly global energy crisis. Pakistan’s issues are different from those of the developed countries. It is now becoming increasingly important for developed countries to switch over from fossil fuels to renewable energy sources.

However, Pakistan is more inclined to rely on non-renewable sources. China-Pakistan Economic Corridor is playing an important role in resolving the issue of energy shortage in the country. Prior to the launch of work on CPEC, Pakistan was faced with energy crises.

The projects initiated in the first phase of CPEC from 2015 to 2020 were mostly focused on energy, especially coal. The coal-based power plant can be built in a relatively short period of time spanning over two to two and a half years. However, the construction of a large hydropower plant requires one to 15 years.

Currently, Pakistan is not ready for a transition to a sustainable energy system. A transition is needed, but Pakistan needs to first improve its economy as a huge amount of funds is required for the transition.

Pakistan should rely on local resources to ensure sustainable economic growth. Dependence on imported fuel leads to an increase in power losses. The cost of imported fuel has hiked manifolds. In routine, the government announces electricity subsidies to facilitate the consumers. However, the government can’t pay relevant entities owing to the shortage of funds. Subsequently, the subsidies are added to the circular debt.

The circular debt hampers economic growth. Pakistan’s circular debt has reached Rs2.5 trillion in power and Rs1.5 trillion in the gas sector. The major reasons for this vicious cycle of circular debt are power losses, capacity payment, fuel price volatility, and non-payment of subsidies by the government.

Pakistan has massive coal resources that can help to generate cheap electricity for hundreds of years. The government should utilise these resources and generate electricity. The provision of cheap electricity will enable the industries to decrease the cost of production and increase exports, according to research conducted by WealthPK.

Credit : Independent News Pakistan-WealthPk