A Greener Future Waits for Pakistan

K-Electric's ambitious target of reaching 30% renewable energy by 2030, seems impossible despite savings potential of around USD 4.5 billion.

Pakistan has the potential to produce up to 50,000 MW of electricity from wind. Such corridors are?dispersed across coastal Sindh and Balochistan. Interestingly K-Electric provides services to around 3.5 million users in this region. Yet 97% of the company’s installed capacity is comprised of thermal power, and only 3% is due to renewable energy. Despite an opportunity that could save its consumers USD 240 million in FY22-23, the organization, and the power industry at large remain uninterested in modern renewable solutions to Pakistan’s burgeoning electricity demand.

A study by Renewables First explores various scenarios that could help K-Electric shift to a greener energy mix, and thereby help consumers save money. Do the problems within Pakistan's power sector stem from capacity issues, or do they reflect a broader issue of public commitment? The decision to utilize domestic coal for electricity generation, aimed at reducing Pakistan’s reliance on imported fuel, reflects a short-term vision among policymakers. In fact, over the past decade, there has been a significant decline in the global Levelized Cost of Energy (LCOE) for large-scale wind and solar projects, and Pakistan has similarly experienced substantial cost reductions in renewable energy sources (REs). However, the Pakistan government failed to capitalize on this opportunity which has resulted in taxpayers paying high amounts for energy as well as capacity payments of thermal power plants.? There is still an opportunity for the government, particularly K-Electric, to mend their ways.

Projections from Renewables First indicate that K-Electric could potentially achieve savings of up to USD 4.5 billion from FY2024 to FY2031 by gradually transitioning to renewable energy sources. These savings would not only assist the government during fiscal challenges but also provide much-needed relief to consumers. However, these savings would require strict policy measures such as removing renewable energy caps in the KE plan for 2031. Furthermore, the report posits that savings need to be utilized for rebuilding the transmission infrastructure. All of this seems quite simple theoretically, but the government’s will is the most important determining factor in Pakistan’s future trajectory.

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About Us: Macro Pakistani is a data-driven research platform that aims to provide a basic understanding of Pakistan’s economy. If you have an interest in contemporary news but are currently overburdened with sensationalism and specialized vocabulary, we are the platform for you.