Arsalan Ali

Pakistan needs long-term energy planning to decarbonize the power sector, said Nadeem Nawaz, Special Advisor and Country Manager of Danish Energy Agency, while talking to WealthPK. By employing the least-cost planning approach, Pakistan can effectively exploit the vast potential of renewable energy sources such as wind, solar, and biomass, he said. Being severely affected by climate change, and contributing minimally to the global CO2 emissions, Pakistan requires international support to address this pressing issue. “Renewables are not only environment-friendly but also cost-effective compared to fossil fuels. Redirecting investments towards renewables aligns with the long-term economic and climate goals. One of the challenges in integrating renewables is the outdated grid infrastructure in many areas of Pakistan,” he said.

He further said it is essential to upgrade and modernize the grid in order to accommodate the fluctuating nature of renewable energy sources. “By investing in grid renewal, transmission, and distribution networks, Pakistan can facilitate efficient integration of wind and solar power. By demonstrating long-term stability and developing consistent policies, Pakistan can attract investors interested in supporting grid improvements,” he added. Denmark has initiated the Danish Energy Transition Initiative in Pakistan, providing technical advice and assistance to promote long-term energy planning, bring in renewable energy (wind, solar, and biomass), and reduce carbon emissions.

“Pakistan has made substantial investments in coal but it is vital to understand that coal-based energy production is not feasible from the climate change perspective,” Nadeem said. “Replacing the imported coal with the local coal may seem economically beneficial in the short-term; however, considering long-term planning and climate objectives, renewable energy sources emerge as a more cost-effective option,” said Nadeem. Talking to WealthPK, Dr. Khalid Waleed, energy expert at the SDPI, said Pakistan is currently facing a 3E crisis involving its economy, energy sector, and environment. These crises are interconnected and have created a vicious circle that is difficult to break. The country's economic turmoil has led to the use of cheap and polluting fuels, including coal, which has resulted in environmental degradation and climate change issues.

These environmental problems, in turn, impact the economy, creating a cycle of energy poverty and underdevelopment. “In order to address these challenges, a two-pronged approach is necessary. The first approach is the internalization theory, which focuses on the demand-side management. Pakistan needs to improve its energy efficiency and reduce wastage to manage its energy demand effectively,” he said. “The second approach is the dependency theory, which recognizes that Pakistan's poor energy decision-making is due to its reliance on foreign and fossil fuel sources. To overcome this, Pakistan must integrate both approaches by correcting demand-side inefficiencies and diversifying its energy supply,” he said. “Firstly, there is a need for infrastructure and grid integration to accommodate the volatility of renewable energy sources.

Pakistan's grid system has experienced nationwide breakdowns in the past, necessitating improvements in this area,” he explained. “Secondly, investment and financing are crucial for successful transition to clean energy. Adequate funding must be secured for renewable energy projects,” he adds. Dr. Khalid said clean energy transition is a necessity for the country's survival, especially considering the potential risks to the hydroelectric power due to climate change. Diversifying the energy portfolio can significantly save cost and reduce reliance on polluting fuels. He further said that to achieve these opportunities, Pakistan should consider international partnerships and financing. China, in particular, can be a valuable partner in renewable energy investment. Strengthening climate and energy transition diplomacy can attract Chinese investments.

Credit: INP-WealthPk