While Pakistan has vowed to generate more renewable energy and curb fossil fuel-based power on its decarbonization pathway, energy experts believe the South Asian country needs better policy design in its fight against climate change.
The Pakistani government, when updating its nationally determined contributions (NDCs), committed to reducing GHG emissions by up to 50% from the business-as-usual (BAU) level by 2030. This compares with its previous target of a 20% cut in 2016.
To reach the new goal, Pakistan said 60% of the electricity in the country will be generated from renewable sources like solar, wind, and hydropower by 2030, compared with 32.8% in the nine months to 30 April 2021 (the latest official figures available).
The ambition was shown after nonprofit German watch ranked Pakistan as the eighth most vulnerable country to extreme weather events out of 180.
Despite the seemly aggressive targets, some question their robustness under close scrutiny.
According to the government’s BAU scenario, Pakistan’s emissions will grow from 405 million metric tons (mt) of CO2e in 2016 to 1.6 billion mt in 2030. So, a 50% cut from the BAU level in 2030 will still lead to much higher emissions in absolute terms.
While the country stopped approving new coal-fired power plants in December 2020, construction of those already with permits continues: Global Energy Monitor (GEM) data shows that capacity total was 1.29 GW as of July 2021.
“As more coal-based power generation comes online, the emissions profile is more likely to increase than decrease,” Haneea Isaad, a research associate at the Institute for Energy Economics and Financial Analysis (IEEFA), told Net-Zero Business Daily.
IHS Markit expects Pakistan’s emissions to be less than 500 million mt of CO2e by 2030. This brings up the other problem with the BAU scenario being used by the government: it sets a very high assumed emissions level in 2030 of 1.6 billion mt, which makes achieving a promised 50% cut relatively easy. IHS Markit’s number suggests the country can easily achieve its climate target, but IHS Markit Senior Sustainability Analyst Mohd. Sahil Ali said the apparent success results from the government’s assumption of a compound annual growth rate of emissions exceeding 10%. The historical rate is 3%-4%.
“From our perspective, it is not a question of whether Pakistan will achieve its NDCs, but whether the baselines have been constructed realistically,” Ali said.
Questions on proposed power mix
Moreover, there are doubts over Pakistan’s decision to favor hydroelectric energy over solar and wind power in its renewable expansion.
In the latest Indicative Generation Capacity Expansion Plan (IGCEP) for 2021-2030, state-owned National Transmission and Despatch Co. said its base case involves increasing installed hydropower capacity to 23 GW by 2030 from 9.87 GW at the end of April 2021. Its share of total capacity would rise to 43.2% from 26.5%.
But IHS Markit only expects about 16 GW of hydroelectric capacity to be in place by 2030, given historical delays in construction and the fact that financing for a significant chunk of the planned expansion has not been secured.
Taking that into account, IHS Markit expects the share of all renewables in the capacity installations to be in the range of 40-50%, rather that the government’s stated goal of 60-65%.
Meanwhile, the IGCEP sees installed solar power capacity jumping to 1.96 GW from 400 GW and wind to 3.8 GW from 1.24 GW in the same timespan. The relatively small expansions come despite many industry participants—including the National Transmission and Despatch Co.—calling solar and wind the cheapest energy sources.
Aditya Lolla, a senior electricity policy analyst at thinktank Ember, said the Pakistani government lacks “holistic planning” in its clean energy transition. “There seems to be a reluctance to embrace variable renewable energy like wind and solar in its long-term capacity expansion planning. A well-rounded national policy is now especially pertinent,” he said.
That well-rounded strategy includes a need for substantial investment in the power grid, IEEFA’s Isaad suggested.
“Pakistan’s grid in its current state isn’t flexible at all and will require heavy upgrades and reinforcements to accommodate higher penetrations of variable renewable energy,” she said.
Challenges in coal phaseout
Another policy has made Pakistan’s utility sector even more difficult to decarbonize. Before the moratorium on coal power in December 2020, the government had been expanding coal-fired generation capacity to take advantage of cheap, abundant, locally-produced lignite.
GEM data shows coal-fired capacity in Pakistan jumped to 5.09 GW in 2020 from 150 MW in 2015. Coal’s share of the electricity generation mix rose to 20.2% from 1.17% in the period, according to Ember, even though the total share of fossil fuels fell to 55.9% from 61.3% as the country’s oil- and gas-fired plants didn’t operate at high utilization rates.
Isaad described the “resource nationalism” as one of the greatest challenges in cutting emissions from Pakistani power plants, saying government planners have the “indigenization of the generation mix” high on their agenda.
“They’re pushing for domestic coal as the cheapest, most economical alternative to imported furnace oil and re-gasified LNG,” she added.
Moreover, Pakistan’s debt-ridden electricity distributors have inked long-term, take-or-pay power purchase agreements with fossil fuel-fired plants.
“Heavy reliance on [fossil fuel-fired] generation has created a high carbon lock-in within Pakistan’s grid and is making the transition difficult,” Lolla said. “While the country did reduce oil- and gas-based generation since 2017, it was replaced by power from new coal-fired power plants.”
“As a result, the country is now locked-in with coal as its young coal-fired power plants may have to run for about 15 to 20 years to pay back their debts,” he added.
To achieve a 50% emissions cut by 2030, the Pakistani government estimated that $101 billion in international grants would be required by 2030 and another $65 billion by 2040 to increase renewable deployment and phase out coal. Without the funding, the country can only manage a 15% reduction, according to its NDCs.
Energy transition financing
As part of its fund-raising efforts, Pakistan recently expressed interest in joining the Asian Development Bank’s Energy Transition Mechanism (ETM), following in the footsteps of Indonesia and the Philippines.
Based on the ETM’s design, two multi-billion-dollar funds will be established to accelerate the early retirement of fossil fuel-based power generators and expand renewable capacity, respectively. The Manila-based development bank has provided a technical assistance grant of $300,000 to Pakistan for a pre-feasibility study, which is expected to be completed in the third quarter of 2022.
Sunil Dahiya, an analyst at the Centre for Research on Energy and Clean Air, suggested the government needs to create a better environment for low-carbon investment even with the bank’s backing.
“The ETM and favorable environmental, climate, and economic factors for renewable development will put Pakistan on track to the energy transition. However, it would still require aggressive local support from the Pakistan government,” Dahiya said.
While Indonesia and the Philippines are seeking to phase out coal with the ETM, the mechanism has been expanded to cover diesel- and furnace oil-fired power plants in Pakistan, the bank confirmed.
With nearly all of the country’s coal-fired capacity having come online since 2017, analysts say Pakistan will likely target its petroleum-based plants for retirement. IHS Markit estimates oil accounted for 14.2% of the country’s capacity mix and contributed 8.1% to the generation mix in fiscal 2021, but many oil-fired plants are 20 or more years old.
According to IEEFA estimates, old fossil fuel-based plants with a total capacity of 6.5 GW are scheduled to retire by 2030, of which 5.9 GW use furnace fuel.
As the ETM is created to buy petroleum power generators and shutter them early, Isaad believes its decarbonization effects would be stronger if Pakistan focused on the plants not already in those retirement plans.
“The question of additionality is very important,” she said. “If a power plant is to retire naturally within five years, it doesn’t make any sense for it to be a part of the ETM. A facility retiring in 10 years or more could be targeted if the ETM proposes to retire it in five to seven years.”
“For Pakistan, the regulators and managers of the ETM will have to find the sweet spot, where plants with a good 10-15 years of remaining operations are targeted, have written off most of their debt, and have higher costs of operations,” she added. —

As a large developing country, Pakistan faces a wide range of problems, especially related to overcoming poverty and improving the health, education, and employment opportunities for low-income groups. The energy sector is critical to progress in addressing these problems, but inadequate investment, unreliable energy supplies, weak governance, and poor fiscal management of the sector have been major constraints. The problem of creating a viable energy sector that can mobilize the needed investments and support sustainable economic growth is a fundamental challenge. This section examines the position of Pakistan with respect to five common challenges affecting power-sector transformation, as identified in the initial strategy report, namely: (1) meeting growing energy demands and moving to a cleaner energy mix; (2) improving governance and transparency; (3) increasing affordability and access; (4) addressing environmental degradation and climate change; and (5) achieving power-sector financial viability.
Meeting growing energy demand and moving to a cleaner energy mix
Pakistan’s economy over the past five years has been growing at more than 4 percent and reached 5.2 percent in 2018. Although primary energy consumption in 2018 grew by 5 percent, primary energy growth has historically lagged behind economic growth. Between 2007 and 2017, the average rate of primary energy growth was 2.7 percent, compared with a 3.8 percent average annual increase in GDP.
Pakistan depends principally on oil and gas for over 70 percent of its primary energy and has become increasingly dependent on oil and gas imports. Although Pakistan has some domestic crude oil production (about 90 thousand barrels per day in 2018), this only accounts for 18 percent of total oil consumption. The growing oil-import bill puts great pressure on budgets and reserves. The International Monetary Fund (IMF) estimates Pakistan’s 2017-18 oil imports at US$14.6 billion, or about a quarter of total estimated current account imports, and 2019-20 imports are expected to be at least US$17 billion. The depreciation of the Pakistan rupee in 2018 added an additional burden to the import bill. Pakistan has had to turn to gas imports as domestic gas consumption has grown (by 7 percent in 2018) and outpaced domestic production. Pakistan’s indigenous gas production has stagnated at about 34 billion cubic meters (bcm) in 2018, accounting for 80 percent of domestic consumption.
Expansion of electricity generation to meet rising demand and reduce the endemic power blackouts and outages has been a high priority of the Pakistan government. Installed generation capacity has greatly expanded from 23,337 megawatts (MW) in 2014 to 33,836 MW in February 2019, and electricity generation increased by 11 percent from 2017 to 2018. Pakistan continues to have a gap, however, of several thousand megawatts in the non-summer months when hydropower output is lower and electricity demand is high
Although natural gas-fired generation provides the largest share of electricity output, Pakistan has significant hydropower production, some nuclear power, and increasing renewable energy generation. We examine more closely the transformation and diversification challenge in the strategic priorities section. — ERMD

While Pakistan has vowed to generate more renewable energy and curb fossil fuel-based power on its decarbonization pathway, energy experts believe the South Asian country needs better policy design in its fight against climate change.
The Pakistani government, when updating its nationally determined contributions (NDCs), committed to reducing GHG emissions by up to 50% from the business-as-usual (BAU) level by 2030. This compares with its previous target of a 20% cut in 2016.
To reach the new goal, Pakistan said 60% of the electricity in the country will be generated from renewable sources like solar, wind, and hydropower by 2030, compared with 32.8% in the nine months to 30 April 2021 (the latest official figures available).
The ambition was shown after nonprofit German watch ranked Pakistan as the eighth most vulnerable country to extreme weather events out of 180.
Despite the seemly aggressive targets, some question their robustness under close scrutiny.
According to the government’s BAU scenario, Pakistan’s emissions will grow from 405 million metric tons (mt) of CO2e in 2016 to 1.6 billion mt in 2030. So, a 50% cut from the BAU level in 2030 will still lead to much higher emissions in absolute terms.
While the country stopped approving new coal-fired power plants in December 2020, construction of those already with permits continues: Global Energy Monitor (GEM) data shows that capacity total was 1.29 GW as of July 2021.
“As more coal-based power generation comes online, the emissions profile is more likely to increase than decrease,” Haneea Isaad, a research associate at the Institute for Energy Economics and Financial Analysis (IEEFA), told Net-Zero Business Daily.
IHS Markit expects Pakistan’s emissions to be less than 500 million mt of CO2e by 2030. This brings up the other problem with the BAU scenario being used by the government: it sets a very high assumed emissions level in 2030 of 1.6 billion mt, which makes achieving a promised 50% cut relatively easy. IHS Markit’s number suggests the country can easily achieve its climate target, but IHS Markit Senior Sustainability Analyst Mohd. Sahil Ali said the apparent success results from the government’s assumption of a compound annual growth rate of emissions exceeding 10%. The historical rate is 3%-4%.
“From our perspective, it is not a question of whether Pakistan will achieve its NDCs, but whether the baselines have been constructed realistically,” Ali said.
Questions on proposed power mix
Moreover, there are doubts over Pakistan’s decision to favor hydroelectric energy over solar and wind power in its renewable expansion.
In the latest Indicative Generation Capacity Expansion Plan (IGCEP) for 2021-2030, state-owned National Transmission and Despatch Co. said its base case involves increasing installed hydropower capacity to 23 GW by 2030 from 9.87 GW at the end of April 2021. Its share of total capacity would rise to 43.2% from 26.5%.
But IHS Markit only expects about 16 GW of hydroelectric capacity to be in place by 2030, given historical delays in construction and the fact that financing for a significant chunk of the planned expansion has not been secured.
Taking that into account, IHS Markit expects the share of all renewables in the capacity installations to be in the range of 40-50%, rather that the government’s stated goal of 60-65%.
Meanwhile, the IGCEP sees installed solar power capacity jumping to 1.96 GW from 400 GW and wind to 3.8 GW from 1.24 GW in the same timespan. The relatively small expansions come despite many industry participants—including the National Transmission and Despatch Co.—calling solar and wind the cheapest energy sources.
Aditya Lolla, a senior electricity policy analyst at thinktank Ember, said the Pakistani government lacks “holistic planning” in its clean energy transition. “There seems to be a reluctance to embrace variable renewable energy like wind and solar in its long-term capacity expansion planning. A well-rounded national policy is now especially pertinent,” he said.
That well-rounded strategy includes a need for substantial investment in the power grid, IEEFA’s Isaad suggested.
“Pakistan’s grid in its current state isn’t flexible at all and will require heavy upgrades and reinforcements to accommodate higher penetrations of variable renewable energy,” she said.
Challenges in coal phaseout
Another policy has made Pakistan’s utility sector even more difficult to decarbonize. Before the moratorium on coal power in December 2020, the government had been expanding coal-fired generation capacity to take advantage of cheap, abundant, locally-produced lignite.
GEM data shows coal-fired capacity in Pakistan jumped to 5.09 GW in 2020 from 150 MW in 2015. Coal’s share of the electricity generation mix rose to 20.2% from 1.17% in the period, according to Ember, even though the total share of fossil fuels fell to 55.9% from 61.3% as the country’s oil- and gas-fired plants didn’t operate at high utilization rates.
Isaad described the “resource nationalism” as one of the greatest challenges in cutting emissions from Pakistani power plants, saying government planners have the “indigenization of the generation mix” high on their agenda.
“They’re pushing for domestic coal as the cheapest, most economical alternative to imported furnace oil and re-gasified LNG,” she added.
Moreover, Pakistan’s debt-ridden electricity distributors have inked long-term, take-or-pay power purchase agreements with fossil fuel-fired plants.
“Heavy reliance on [fossil fuel-fired] generation has created a high carbon lock-in within Pakistan’s grid and is making the transition difficult,” Lolla said. “While the country did reduce oil- and gas-based generation since 2017, it was replaced by power from new coal-fired power plants.”
“As a result, the country is now locked-in with coal as its young coal-fired power plants may have to run for about 15 to 20 years to pay back their debts,” he added.
To achieve a 50% emissions cut by 2030, the Pakistani government estimated that $101 billion in international grants would be required by 2030 and another $65 billion by 2040 to increase renewable deployment and phase out coal. Without the funding, the country can only manage a 15% reduction, according to its NDCs.
Energy transition financing
As part of its fund-raising efforts, Pakistan recently expressed interest in joining the Asian Development Bank’s Energy Transition Mechanism (ETM), following in the footsteps of Indonesia and the Philippines.
Based on the ETM’s design, two multi-billion-dollar funds will be established to accelerate the early retirement of fossil fuel-based power generators and expand renewable capacity, respectively. The Manila-based development bank has provided a technical assistance grant of $300,000 to Pakistan for a pre-feasibility study, which is expected to be completed in the third quarter of 2022.
Sunil Dahiya, an analyst at the Centre for Research on Energy and Clean Air, suggested the government needs to create a better environment for low-carbon investment even with the bank’s backing.
“The ETM and favorable environmental, climate, and economic factors for renewable development will put Pakistan on track to the energy transition. However, it would still require aggressive local support from the Pakistan government,” Dahiya said.
While Indonesia and the Philippines are seeking to phase out coal with the ETM, the mechanism has been expanded to cover diesel- and furnace oil-fired power plants in Pakistan, the bank confirmed.
With nearly all of the country’s coal-fired capacity having come online since 2017, analysts say Pakistan will likely target its petroleum-based plants for retirement. IHS Markit estimates oil accounted for 14.2% of the country’s capacity mix and contributed 8.1% to the generation mix in fiscal 2021, but many oil-fired plants are 20 or more years old.
According to IEEFA estimates, old fossil fuel-based plants with a total capacity of 6.5 GW are scheduled to retire by 2030, of which 5.9 GW use furnace fuel.
As the ETM is created to buy petroleum power generators and shutter them early, Isaad believes its decarbonization effects would be stronger if Pakistan focused on the plants not already in those retirement plans.
“The question of additionality is very important,” she said. “If a power plant is to retire naturally within five years, it doesn’t make any sense for it to be a part of the ETM. A facility retiring in 10 years or more could be targeted if the ETM proposes to retire it in five to seven years.”
“For Pakistan, the regulators and managers of the ETM will have to find the sweet spot, where plants with a good 10-15 years of remaining operations are targeted, have written off most of their debt, and have higher costs of operations,” she added.

Students of 10 universities belonging to Google Developer Student Club, on Friday participated in a three-day event titled Hack Fest 2022 at IBA City Campus Karachi, where they were trained about finding technical solutions to the challenges pertaining to UN’s 17 Sustainable Development Goals (SDGs).
Speaking on the occasion, Hamza Siddiqui stressed the need to find technical solutions to the UN’s 17 SDGs. He said that 17 UN goals are not a problem but are challenges that we have to solve. He said that students should fully prepare themselves for this cause. He also guided and trained students in this regard.
Umama Iftikhar Siddiqui, Marketing Lead, Google Developer Student Club (GDSC) of the University of Karachi, said that GDSC is a platform at which students of 10 universities are receiving technical knowledge and training to solve problems in different areas like poverty, sanitation, water, and traffic. She said that they were preparing students to find Google solutions to meet challenges pertaining to UN’s 17 SDGs.
Umama further said that they would fully prepare students to find technical solutions to the problems being faced by them in their areas, while suggestions for a solution to those issues would also be presented to the sgovernment.
Danella Patrick, SMIU GDSC Lead, said that the club is an innovative platform for training students for solutions to the SDGs challenges, adding 64 students from SMIU had participated in this program which is the highest number as compared to other universities.
She said that three excellent and best-performing students in the next session would be honored with cash prizes of Rs50,000 for the first runner up, Rs30,000 for the second runner up, and Rs20,000 for 3rd runner up.
A panel discussion was also held in which panelists Krinza Momin, Muhammad Ali Khan, Fatima Moin, and Arbaz Piwani advised students to coordinate their relevant mentors and get sufficient knowledge about their work at their respective organizations to make real progress.
Gifts were also distributed among the participating students. Rafia Manzoor, GDSC Team Lead from the University of Karachi, and Eman Ahmed of Salim Habib University conducted program proceedings.
The universities which took part in the program were the University of Karachi, SMIU, SSUET, Salim Habib University, Usman Institute of Technology, IBA, DHA Suffa University, NED University, and FAST.— KARACHI:

Austrian Foreign Minister Mag. Alexander Schallenberg accompanied by Austrian Ambassador to Pakistan Mr. Nicolaus Keller and a high-level Austrian business delegation visited WAPDA House to explore ways and means for partnering with WAPDA in the construction of its mega-projects in water and hydropower sectors, says WAPDA communication.
This was the maiden visit of such a high-profile dignitary from a European country to WAPDA House along with a large delegation comprising senior officials of leading firms hailing from Austria.
The significance of this visit can be gauged from the fact that the Austrian Ambassador, in his conversation with WAPDA Chairman Lt Gen Muzammil Hussain (Retd), declared it their “flagship visit”.
The Chairman briefed the delegation of WAPDA’s mandate, its development portfolio, financial strength, and expertise to successfully implement mega projects. Giving a rundown of under-construction projects, he said that WAPDA is implementing as many as 10 projects of more than US$26 billion under the vision “Decade of Dams” to be completed from 2022 to 2028-29 in a phased manner, adding 11.7 million acre feet of water to the existing water storage capacity and 11,369 megawatts (MW) to the installed generating capacity of clean, green and low-cost hydel electricity. WAPDA projects, Diamer Basha Dam, in particular, have tremendous business opportunities.
The Austrian firms, like other foreign and local companies, may benefit from these opportunities by participating in international competitive processes for the purpose, he further said.
Referring to the successful launch of debut Green Euro Bond in London Stock Exchange last year by WAPDA on the back of its robust capital structure and strong balance sheet, the Chairman said that WAPDA has devised an innovative financing strategy with no or meager reliance on the national exchequer to construct its projects, particularly Diamer Basha Dam, Mohmand Dam, and Dasu Hydropower Project. This reflects strong ties of WAPDA with prestigious financial institutions from across the globe, particularly in the US, Europe, and Asia including China and the Middle East, he added.
The Austrian Foreign Minister appreciated WAPDA for its contribution towards the development of a sustainable and low-carbon economy of Pakistan, adding that he is pleased to know about WAPDA’s portfolio of development projects. He expressed the hope that Austrian firms will make use of the opportunities embedded in these projects and become a partner of WAPDA in mutual progress.
Speaking on the occasion, the Austrian Ambassador said that he is confident that this visit will help enhance ties between WAPDA and Austrian firms. The visiting high-ups of the Austrian firms briefed about the portfolios of their companies and showed keen interest in WAPDA projects. – PR/ER