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Energy Outlook in Pakistan

Conference Paper · November 2014

DOI: 10.1109/ICESP.2014.7346996

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 Energy outlook in Pakistan
Khuram Pervez Amber and Naila Ashraf
Department of Mechanical Engineering
Mirpur University of Science and Technology,
Mirpur AJK, Pakistan
khuram.parvez@must.edu.pk
Abstract—Pakistan is facing a severe energy crisis of its
history due to increase in the energy demand and lack of
investment in mobilizing its energy resources. This paper aims to
discuss the energy outlook and ways toward greener environment
in electricity production in Pakistan. Gross domestic product and
population are the major drivers behind the growing demand for
energy. Demand for electricity in Pakistan is always growing with
its GDP and population growth. The growth for electricity in
Pakistan forecasted by Ministry of Petroleum & Natural
Resources has shown an increase of 0.75% in 2012 compared to
2011. This growth has been driven by strong demand from
industrial and government sectors. Overall, the share of
electricity consumption to total energy consumption has
decreased due to short fall of electricity from 13.6% in 2007 to
12.5% in 2012. The total electricity generation was reported at
95TWh in 2012 whereas electricity consumption was 76.7TWh
showing 17.3% line losses. Oil is still the major fuel source in
Pakistan contributing to 35.2% of the total generation fuel mix of
electricity followed by hydro, 29.9%, gas, 29% nuclear and
imported, 5.8% and Coal, 0.1%.
The shortfall of electricity is expected to drop when the Quid-
e-Azam solar park and 45 ongoing wind energy projects will
inject a total of 4200 MW electricity into the national grid by
2016.
Keywords—GDP; population; energy; oil; gas; electricity
I. GLOBAL ENERGY STATUS
Energy plays a vital role for the sustainable development
of any nation – be it social, economic or environment [1]. In
the past decade energy consumption has increased
exponentially globally and is projected to increase by 33%
from 2010 to 2030 [2]. Diminishing fossil fuels resources are a
major threat to the world’s economy and this factor is behind
the most critical economic, environmental and developmental
issues facing the world today. Sustainable energy sources are
indispensable for global prosperity. Therefore, planning for
future energy demand is very important. Different countries
may have different policies in planning their future energy
need. Nonetheless, the future energy demand is always
influenced by various non-energy policy factors such as
population growth, economic growth, energy prices and
adoption of new and efficient technologies. At the global
level, the most fundamental relationship between energy
demand and GDP remains robust, i .e. more people with more
income means that the production and consumption of energy
Fig.1 Correlation between global GDP, population, and energy demand
between 1970-2010 [3]
will rise [3]. Fig.1 shows the growth in world’s energy
demand, GDP and population for the period 1970 to 2010. It is
apparent that world’s energy demand has increased with the
increase in GDP and population.
Other factors influencing the primary energy demand may
include government policies, variation in fuel prices, type of
fuels used at different sectors or industry and the pace of
technological change which impacts directly or indirectly on
energy supply and demand.
In 2010, oil was still the major consumption worldwide
with 34% share, followed by natural gas 22%, coal 26%,
nuclear 6%, Biomass/Waste 9%, hydro 2% and other
renewable 1%. The global energy demands will increase to
around 33 percent from 2010 to 2030 [2]. To meet this
increasing demand of energy, a diverse, reliable and
affordable fuel mix will be needed that could accelerate the
economic growth and societal advancements. Forecasts show
that oil will still remain the largest single source for meeting
energy demand until 2040. However, it is projected that
natural gas will displace coal as the second-largest fuel by
2025. Natural gas has been seen as an economical, clean and
abundant fuel as compared to other fuel sources. It is expected
that it will provide an inexpensive mean for power generation
demand in the near future [3].
Studies show that oil, natural gas and coal will continue to
play a major role in the long-term energy supply and together,
these three fuels will provide approximately 80 percent of the
total world’s energy supply by 2040. Nuclear will grow
significantly, mainly due to rising electricity demand and CO2
emissions reduction targets. From 2010 to 2040, the use of
nuclear energy is forecasted to increase from 5.5 % to 8 %.
Another prominent shift in the energy fuel mix is the
significant growth in renewable energy such as wind, solar
and biofuels. These renewable energy technologies will grow
rapidly. By 2040, renewable will only make up of 3 to 4
percent of the total world energy supply. Therefore, greater
advances in technology are needed to increase the commercial
viability. Renewable energy is already playing a bigger role
globally – particularly through wind and solar. However, there
is also a potential downside due to the intermittent renewable
resources that may have on the cost and reliability of
electricity supply [3].

II. PAKISTAN ENERGY STATUS

The economic stability of developing countries like Pakistan
depends upon the growth of the energy sector to influence
social prosperity and long-term planning for utilization of
domestic energy resources. Pakistan has been facing an
unprecedented energy crisis since last few years. Its current
energy demand far exceeds its indigenous supplies, fostering
dependency on imported oil that places substantial burden on
economy of the country [4]. Fig. 2 shows the variation in
primary energy demand and Pakistan’s GDP and population
for the period 2002 to 2012.
Fig. 3 Primary energy consumption by fuel type [6]
B. Natural Gas
Natural gas production during 2006-07 increased from
3,873 to 4,259 million cubic feet per day (10% increase) in
2011-12. This increase in the gas production is a result of
drilling efforts which resulted in 15 discoveries mostly of
gas/condensate, out of which 7 were by OGDC and 8 by the
private sector companies.
Fig. 4 shows the growth in the production of natural gas
since 2006-07.

Fig. 2 Correlation between Pakistan’s GDP, population, and energy

demand between 2002-2012 [5]

In order to ensure security of country’s energy supplies, the

Government of Pakistan is pursuing policies of increasing its
domestic supplies, attracting foreign investment, diversifying
imports to include natural gas, coal and electricity,
encouraging economic inter-fuel substitution, promoting
energy efficiency and renewable energy, and supporting
regional and interregional cooperation. Pakistan is an ideal
location for foreign private investment in the upstream and Fig. 4 Natural gas production per day [6]
downstream hydrocarbon sectors as it provides a deregulated
transparent and level playing field to all. Natural gas consumption increased slightly by 1% during
A. Primary Energy 2009-10 as compared to the previous year. This increase in
consumption was due to fertilizer 22%, transport 12%,
Fig. 3 shows a comparison of primary energy supply for
industry 5%, commercial 4% and domestic 3%. On the other
two financial years, i.e. 2006-07 and 2011-12. It is apparent
hand, natural gas consumption decreased during 2009-10 in
that during financial year 2011-12, primary energy supplies
cement industry by 73%, Pakistan Steel Mills by 7% and
increased by 6.76% (from 62.6 million tonnes of oil equivalent
power sector by 9%.
(mtoe) in 2006-07 to 64.7 mtoe. Increase in the supplies came
from natural gas (2.7 mtoe) and Oil (1.75 mtoe). Supplies Fig. 5 shows the share of gas production by different
from LPG, coal and other fuels showed decrease compared to provinces. Sindh stands at the top position for producing 67%
the 2006-07. The share of natural gas in primary energy of the total gas production in 2011-12 whereas Balochistan
supplies during 2007-8 was 48.8% followed by oil 30%, was the 2nd province with a production share of 19%. KPK and
Hydro, nuclear and import electricity 13.5%. Coal has a share Punjab produced 9% and 4% gas respectively during this
of 7.3%. period.
 0.7% from 3.64 M tonnes in 2006-07 to 3.61M tonnes in
2011-12 [6].

Fig. 5 Natural gas production by provinces [6]

C. Oil
Oil consumption increased by 13.3% during 2009-10
compared to 2006-07. This increase was due to 69% increase
in motor spirit consumption in transport sector and 22%
increase in furnace oil consumption in power sector. The
consumption of E-10 fuel was also added in the transport
sector in 2009-10. In 2011-12, oil consumption decreased by
2.1% compared to 2009-10. This decrease is due to 8.3%
decrease in furnace oil, 6.4% decrease in HSD and 2.75%
decrease in aviation fuels. Transport, power and industrial Fig. 7 Coal consumption (MTonnes) [6]
sectors remained the major oil consumers with share of 49.6%,
40.7% and 9.8 % respectively in 2011-12.
E. Electricity
Fig. 6 shows the share of oil production by different
provinces. Sindh and KPK produced 78% of the total oil In the power sector five new IPPs (Atlas, Engro, Orient,
production in 2011-12 whereas Punjab’s share of oil Nishat and Saif power) were commissioned during 2009-10.
production was reported 22%. Only 0.08% oil was produced This helped increase the installed capacity of thermal power
from Balochistan during this period. plants by 1,089 MW during 2009-10. Total installed capacity
increased by further 1,564MW in 2010-11 when six new IPPs
(Foundation, Halmore, Hub, Liberty Tech, Nishat and
Sapphire power) and one Nuclear (Chas-NUPP-2) were
commissioned. Fig.8 shows the growth in the electricity
installed capacity since 2006-07. It is apparent that installed
capacity in 2011-12 has increased by 9% compared to 2006-
07 mainly due to the installation of new IPPs and Nuclear
Power Plants.

Fig. 6 Oil production by provinces [6]

D. Coal
Overall coal production decreased by 8.5% in 2011-12
compared to 2006-07 due to lesser production from
Balochistan and KPK coalfields. Coal imports have increased
slightly by 0.13% resulting in overall decrease in coal
supplies/consumption by 3% over the last year. As shown in
Fig. 7, coal Consumption in power generation decreased by Fig. 8 Installed electricity capacity, MW [6]
 Electricity generation during 2011-12 decreased by 3.2%
(with major decrease of 10.8% in hydro and 4.1% in thermal
generation) compared to 2006-07 and reached 95,091 GWh
(including 274 GWh of electricity imported from Iran).
Electricity generation included 64.3% thermal, 29.9% hydel
and 5.8% nuclear (including 0.3% import). Electricity
consumption increased by 5.57% to 76,761 GWh during 2011-
12 as compared to 72,712 GWh in 2006-07. Major increases
in consumption were in the domestic sector (2254 GWh),
agriculture (372 GWh), industry (735 GWh), commercial (391
GWh) and bulk suppies (256 GWh). T&D losses of public
sector power system were reduced from 23.2% (2006-07) to
17.3% during 2011-12. Domestic and industrial sectors are the
highest electricity consumers with a share of 46.4% and
28.4%. Agriculture and commercial sectors consumed 11.1%
and 7.5% electricity respectively.
Fig. 9 shows the share of electricity consumption by
different provinces. It is apparent that Punjab and Sindh
consumed 82% of total electricity during 2011-12.
Fig. 9 Electricity consumption by provinces [6]
III. WAY FORWARD
In order to overcome its energy crises, Pakistan needs
concrete steps. Government of Pakistan needs to look into its
energy policy. Potential for renewable energy technologies
should be investigated with high priority. Energy reduction,
generation, distribution and supply targets must be set for the
next decades and these should not be limited to only
electricity. The policy must demonstrate the methods and the
budget required to achieve these targets. The performance
against targets must be regularly monitored and shared with
the public via different media [7].
Wind and Solar energies are the possible clean and low
cost renewable resources available in Pakistan. Wind power
provides opportunity to reduce dependence on imported fossil
fuel and at the same time expands the power supply capacity
to remote locations where grid expansion is not practical.
The Ministry of Water and Power has prepared the
Renewable Energy Policy of Pakistan in 2006, which
envisages mainstreaming of renewable energy in the
development plans of the country. Pakistan has set a target to
add approximately 10,000 MW electricity through renewable
energies by year 2030 besides replacement of 5% diesel with
bio-diesel by year 2015 and 10% by 2025 [8]. In 2012, 515
MW of renewable energy projects with private participation
reached financial closure in the country, with total project
costs of USD 1,211 million. For pipeline projects the total
potential installed capacity reached 2,033 MW [9].
Pakistan’s first solar power park, which will start
generating 100 megawatts of energy by the end of the 2014
and a total of 1,000 megawatts by 2016. The Quaid-e-Azam
Solar Park project has 400,000 solar panels, with a total cost
of around $131 million. When complete the plant will produce
about 2.5 times the power coming from the 392 megawatt
Ivanpah solar thermal plant in California’s Mojave Desert,
making it one of the largest solar parks in the world [10].
The Jhimpir Wind Power Plant is a wind farm located at
Jhimpir in Thatta District of Sindh province in Pakistan, 120
kilometres North-East of Karachi. The project has been
developed by Zorlu Energy Pakistan, a subsidiary of the
Turkish firm Zorlu Enerji. The total cost of project is $143
million. Total capacity of this plant is 56.4MW and it
comprises of 33 number of wind turbines. Currently, 45 wind
power projects of around 3200 MW capacity are under process
in Pakistan [11, 12].
IV. CONCLUSIONS
Globally, the energy projection has shown a continued
increase in electricity production for the years to come.
Pakistan electricity consumption is also projected to be
increased to 90 TWh in 2025. At current, oil and gas are the
major energy fuels in Pakistan meeting the majority of its
energy demands. Although the installed electricity capacity
has increased in last few years, yet there exist a short fall of
6000MW. Deployment of RE such as solar and wind energy
will help in reducing the gap between supply and demand in
Pakistan. Government of Pakistan needs to take solid steps in
order to get rid of the ongoing energy crisis.
ACKNOWLEDGMENT
The authors are thankful to the Mirpur University of
Science and Technology (MUST) for providing necessary
sources for the completion of this study.
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