By Ayesha Saba ISLAMABAD, Mar 04 (INP-WealthPK): In Pakistan, the state-owned companies and independent power producers (IPPs) are actively engaged in producing electricity to cope with high demand. Focus is also being shifted to include renewables into the energy mix of the country, including wind, hydro, solar, and biomass. Renewable energy and coal are currently playing an emerging role, and they are expected to get significant boost in the coming years. Dr Malik Saqib Ali, Head of the Department of Economics, National University of Modern Languages (NUML), Islamabad, told WealthPK that the development of the electricity sector was beneficial for the economy as well as the welfare of poor households. “Improvement in electricity production leads to decrease in electricity prices, and increase in employment opportunities because industrial and other sectors have access to electricity,” he said. According to the Economic Survey of Pakistan, in comparison to FY2020, the hydro proportion of the total energy generation has decreased in FY2021. Thermal power generation now accounts for the largest of energy generation. Furthermore, compared to FY2020, its share in FY2021 has grown. The increased use of re-gasified liquefied natural gas (RLNG) in the energy mix has aided in improving supplies to various power plants. RLNG is also supplied to fertilizer plants, industrial and transport sectors. [caption id="attachment_64432" align="aligncenter" width="450"] Source: Pakistan Economic Survey http://www.finance.gov.pk/survey/chapters_21/14-Energy.pdf[/caption] [caption id="attachment_64433" align="aligncenter" width="450"] Source: Pakistan Economic Survey http://www.finance.gov.pk/survey/chapters_21/14-Energy.pdf[/caption] Dr Saqib said energy cost is relatively high in Pakistan. He said if energy costs rise sharply during future periods of high growth, the balance of payments (BoP) might suffer significantly. “To hedge against this vulnerability, Pakistani policymakers should work to reduce the country's increasing reliance on imported fuels. Pakistan’s has made a tremendous effort to cope with electricity shortages, but it still needs reforms. This could be done in a number of ways, including switching towards indigenous energy sources by further exploiting the considerable hydropower potential of the country, and by speeding up the development of proven local coal reserves,” he stated. Till April FY2021, installed capacity of electricity reached 37,261 MW, posting a growth of 3.6 percent. The economic expert said that the availability of electric power at affordable price is a basic requirement for progress of any country and uplift of the living standards of its citizens. He said Pakistan’s per capita annual electricity consumption is much less than the world average. He said access to affordable electricity is a necessary condition to raise living standards of people and accelerate the economic growth of the country. “The government should also formulate short, medium, and long-term energy production plans in order to produce cheap energy for fulfilling the country’s demand for electricity,” he suggested. Pakistan has effectively overcome its energy crisis, which has a direct and indirect impact on all sectors of the economy, by increasing the system's generation and transmission capacity. Currently, the energy sector is confronted with a number of issues that must be addressed, including improving the energy mix in order to deliver energy at a cheaper cost, as well as resolving other energy-related concerns that are putting a burden on the national budget.