Pakistan and

Current
Affairs
Crash
Course

By Faisal Hayat
PAS
 Current Affairs syllabus

Category Aspects

Government structure, political parties, elections,

Political
governance

Economic Economic policies, growth, inflation, employment

Social Cultural, educational, healthcare, societal issues

 Countries and relations with them

Regions/Countries Aspects

Neighbors India, China, Afghanistan, Russia

Muslim World Iran, Saudi Arabia, Indonesia, Turkey

United States Diplomacy, economic relations, security cooperation

Organizations UN, SAARC, ECO, OIC, WTO, CW

 Other topics
Issues Aspects

International Security Terrorism, Nuclear Proliferation

International Political Economy Globalization

Human Rights Violations, international efforts

Environment Global Warming, Population

Terrorism & Counter-Terrorism Threats, strategies

Global Energy Politics International energy policies

Nuclear Politics South Asia, Proliferation, Security

International Trade Doha Development Round, Bali Package

Cooperation & Competition Arabian Sea, Indian & Pacific Oceans

Millennium Development Goals, Middle East Crisis, Kashmir Issue, Palestine

Global Issues
Issue
 Topics to be covered in the class
1. Belt and Road Initiative vs. IMEC: A Regional Perspective, CPEC, BRI, and New
India Middle East Corridor
2. Changing Global Dynamics: SCO, BRICS, G7, and G20, Important Global
Organizations including IMF, WB, etc.
3. China-US Affairs and the South China Sea
4. Economic Crisis in Pakistan: Debt, Inflation, and Policy
5. Energy Crisis in Pakistan: Electricity Prices, IMF, and Governance
6. Future of Indo-Pak Relations
7. Future of Kashmir and Palestine, Future of Israeli State. Middle East Saudi-Iran
Relations and Saudi-Israel Friendship
8. Global Energy and Oil Crisis, Global North vs. Global South
 Topics to be covered in the class
11. Judicial Role in Pakistan's Legal System
12. National Security Policy of Pakistan
13. Pakistan political evolution and Its Constitutional Crisis
14. Pakistan's Economic Challenges: Debt, Inflation, and Policy
15. Pakistan's Relations with Afghanistan and the Taliban
16. Political Instability, Extremism, and Consequences
17. Tackling Terrorism: Resurgence of Terrorism and Role of TTP
18. Russia-Ukraine Conflict and Its Impact on the World
 Topics to be covered in the class
19. Understanding the 18th Amendment's Impact
20. US-China Power Struggle and a Multipolar World, Indo-China
Relations and Indian Ocean
21. Future of EU and NATO
22. New World Order and AI
23. Climate Change, causes, impacts and solutions
24. Democracy in Crisis, Civil-Military Crisis, Political Engineering, Elite
Capture, Media Freedom and Freedom of Speech
25. Pakistan's Geostrategic Landscape and its importance
 ENERGY CRISIS IN PAKISTAN:
ADDRESSING POWER SHORTAGES AND ALTERNATIVES
 1
INTRODUCTION
 BRIEF OVERVIEW
PAKISTAN’S ENERGY CRISIS

• Persistent Crisis: Pakistan faces a prolonged energy crisis, severely affecting

economic growth and daily life.
• Power Outages: Frequent electricity outages are a key symptom of the crisis.
• Summer 2023 Peak: The crisis intensified in summer 2023, with a massive
electricity shortfall.
• Demand vs. Supply Gap: During this period, the demand soared to 28,200 MW
against a supply of only 21,200 MW.
• Economic Impact: This energy deficit has critically hampered Pakistan's
economic and technological progress.
• Alternative Solutions: Emphasizing the need for alternative energy sources to
address and alleviate the crisis.
 BRIEF OVERVIEW
PAKISTAN’S ENERGY CRISIS
 INTRODUCTION
OVERVIEW OF PAKISTAN’S ENERGY CRISIS

LACK OF INVESTMENT CIRCULAR DEBT

a
d

e INEFFICIENT ENERGY USE

OVER-RELIANCE ON FOSSIL
c
FUEL b

POLITICAL INTERFERENCE
THE MAIN POWER PLAYERS: ENERGY DISTRIBUTION
MECHANISM
 Sector Entity/Function Description

Public Producers WAPDA Handles energy produced by dams, also responsible for development of water resources.

Governmental authority for research and development of nuclear technology for peaceful purposes, including energy
Public Producers PAEC generation.

Public Producers GENCOS Generation Companies mainly dealing with thermal energy.

Private Producers IPPs Independent Private Producers owning facilities generating electricity for sale to public utilities or end users.

Private Producers SPPs Small Power Producers generating electricity usually below 50-80 MW mainly by renewable resources.

Private Producers CPPs Captive Power Producers set up power plants for their own energy needs.

Central Power Purchasing Agency and National Transmission and Dispatch Company responsible for energy transmission
Power Transmission CPPA & NTDC over national grid.

Power Distribution DISCOS & K-Electric Public and private sector entities responsible for power distribution.

Independent Regulatory
NEPRA Autonomous body regulating the electric power services to promote competition and deregulation.
Authority
 PAKISTAN’S ENERGY MIX

• Thermal Power: Constitutes a major portion,

accounting for 58.8% of the total energy mix.
This category primarily includes energy
generated from natural gas and oil.
• Hydel Power: Represents a significant 25.8% of
the energy mix, highlighting Pakistan's utilization
of its hydroelectric potential.

• Nuclear Power: Contributes 8.6% to the energy mix, showcasing the country's efforts in
harnessing nuclear energy for power generation.
• Alternative Power Sources: Accounts for 6.8% of the energy mix. This segment includes
renewable energy sources like wind, solar, and biomass, indicating a growing focus on
sustainable and cleaner energy options.
PAKISTAN’S ENERGY MIX
 CURRENT ENERGY SCENARIO
Heavy reliance on fossil fuels, combined with the expected growth in demand, threatens to
exacerbate many of the current challenges of the energy sector

The circular debt has continued to accumulate, especially in the last few years. As of the end of June
2023, circular debt stood at roughly US$8.3 billion in the electricity sector and US$6.3 billion in the gas
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 2
PAKISTAN’S ALTERNATIVE
AND
RENEWABLE ENERGY (ARE)
POLICY 2020

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 PAKISTAN’S ALTERNATIVE AND RENEWABLE
ENERGY (ARE) POLICY 2020

• On August 12, 2020, the then Government of Pakistan announced the Alternative
and Renewable Energy (ARE) Policy 2020.
• The aim of the policy was to increase the share of ARE in total power supply to
20% by 2025 and 30% by 2030 from about 5% in 2020.
• This was to be achieved through offering generous tax facilities to investors and
promising induction of power plants on open competitive bidding for lowest
tariff and technology transfer.
 CURRENT ENERGY SCENARIO
PAKISTAN’S ALTERNATIVE AND RENEWABLE ENERGY (ARE) POLICY 2020
The federal government would
decide on annual and three- The policy will provide
incentives for technology
d
year basis about the quantity of
b additional power requirement
instead of federating units and
transfer for local manufacturing
of solar panels, wind turbines
steering committee deciding and all related equipment for job
the requirement. creation.
Investment would be

c
solicited on competitive The currency devaluation
bid for lowest cost instead factor would be taken care
a of upfront or cost-plus
based tariff as was under
of in bids for tariff.

all previous power policies

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 3
OBJECTIVES

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 Pakistan's ongoing energy crisis poses a
multifaceted challenge, characterized by
chronic power shortages, unreliable
electricity supply, and detrimental
STATEMENT
consequences for economic stability and OF PROBLEM
societal well-being. Insufficient energy
infrastructure, overdependence on non-
renewable sources, and a lack of effective
policy measures contribute to the
perpetuation of this crisis, necessitating
immediate attention and strategic
interventions to secure a sustainable and
resilient energy future for the nation.

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 ELECTRICITY GENERATION

Circular debt in Pakistan's energy sector has ballooned from Rs 450 billion in FY2013 to Rs 2467 billion by
March 2022, equivalent to 3.8 percent of Pakistan's GDP and 5.6 percent of government debt, highlighting the
urgent need for comprehensive reforms to prevent it from reaching an estimated Rs 4 trillion by 2025.

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 SHARE OF ELECTRICITY CONSUMPTION

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 THE PROMISE OF ALTERNATIVE ENERGY
Developing hydroelectric power plants can
not only generate substantial electricity but
also regulate water flow for irrigation and
flood control. This approach addresses both
energy and water management challenges.

03
Installing wind turbines can
provide a steady source of clean Agricultural residues and
organic waste can be
electricity. Wind power can 02 04 converted into biofuels and
diversify the energy mix,
reducing the strain on Hydroelectric biogas. This not only helps
conventional sources and Energy manage waste but also
promoting sustainability generates renewable energy
Wind Energy Biomass
Energy
Pakistan boasts Although largely
untapped, Pakistan has
abundant sunlight 01 05 significant geothermal
throughout the year, Solar Energy Geothermal
potential, particularly in
making solar energy Energy
a viable option regions with active
tectonic activity.

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 BENEFITS OF ALTERNATIVE ENERGY ADOPTION
Energy Independence:
Sustainability: Relying on domestic
Alternative energy renewable resources
sources are renewable can decrease
and do not.
deplete dependence on
over time, ensuring a imported fossil fuels,
long-term and enhancing energy
sustainable energy security and reducing
supply the impact of global oil
price fluctuations

01 03
02 04
Reduced Environmental
Impact: Unlike fossil fuels, Employment
alternative energy Opportunities: The
sources produce little to transition to alternative
no greenhouse gas energy requires skilled
emissions, mitigating labour
climate change and
improving air quality.

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 CHALLENGES OF ALTERNATIVE ENERGY ADOPTION
Infrastructure
Development: Establishing
Initial Costs: The the necessary The key barriers such as
upfront investment infrastructure, such as the high cost of new
required
. for power grids and technologies, insufficient
infrastructure and transmission lines, is energy infrastructure, and
technology can be essential but can be sustainability of the
substantial, deterring challenging, especially in energy system.
immediate adoption remote areas.

01 03 05
02 04 06
Intermittency: Some
alternative sources, such Policy and Regulatory Adequately
as solar and wind, are Framework incentivising
intermittent, requiring renewables, and also
efficient energy storage does not sufficiently
solutions to ensure provide for imperative
continuous supply steps required for the
just transition
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 4some
other
CAUSES

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 Cause Description

- Uniformity: Legacy system with a single postage stamp for all consumers and a single generation cost.<br>- Static, not Dynamic: Tariffs don't change according to changing
Tariff Deciding Mechanism costs and international oil prices.

Subsidy - Result of flawed tariff determination process, government picks up the cost difference between production cost and tariff charged.

Fuel Price Adjustments - Delays in implementing fuel cost adjustments by NEPRA.<br>- Use of historical data instead of projected fuel consumption and cost.

Inefficiencies of GENCOs and - Overstaffing, corruption, outdated equipment, poor maintenance, free provision of electricity to WAPDA employees contribute to high operational costs.<br>- Poor collection of
bills from customers.
DISCOs

Electricity Theft - Occurs in various sectors (domestic, industrial, commercial, agricultural).<br>- Inefficient collection of electricity bills.

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 5
REMEDIES

cc

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 Causes of the Crisis Proposed Remedies

Inefficiencies Modernize the system and staff, address low productivity, and eliminate unnecessary delays.

Irregularities Crack down on corrupt practices, bribery, meter reading reversals, and political interference.

Lack of Proactive Planning Improve forecasting, maintain sufficient stocks, reduce red tape, and prioritize long-term planning.

Imbalanced Energy Mix Shift towards indigenous resources, promote hydropower, coal, solar, and wind energy, and balance the energy mix.

Non Utilization of Indigenous Resources Explore local coal reserves, harness hydropower potential, and utilize solar and wind energy.

Line Losses Including Thefts Implement smart meters, upgrade the system, raise public awareness, and take strict action against theft.

Increase in Demand Address population growth, promote energy-saving devices, and implement checks and balances in industry, agriculture, and commerce.

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 6
RECOMMENDATIONS
AND CONCLUSIONS

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 Breaking the Vicious
Cycle: Resolving Circular
Debt for a Prosperous
Economy

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 Recommendation Description

- Allow implementation of differential tariffs determined by the regulator of the DISCO territory to cover costs more effectively rather than focusing on political popularity.<br>- Revise tariffs upwards in
Differential Tariffs a timely manner.

- Privatize distribution companies (DISCOs) to improve efficiency, replace non-productive staff, and ensure cash flows to power generation companies (GENCOs).<br>- Consider privatizing GENCOs in
Privatization of DISCOs and GENCOs the future.

Fuel Adjustment Mechanism Improvement - Ensure timely implementation of fuel cost adjustments to prevent DISCOs and GENCOs from incurring additional costs.<br>- Use projected fuel consumption and cost rather than historical data.

- Identify, arrest, try, and punish individuals and organizations involved in electricity theft, regardless of their complicity with government officials.<br>- Address poor collection of electricity bills
Crackdown on Electricity Theft effectively.

- Address political interference, lack of accountability, failure to disconnect defaulting customers, and lack of modern technology for revenue collection.<br>- Improve bill collection from government
Improvement in Bill Collection departments and organizations.

Reduction of Electricity Subsidies - Reduce electricity subsidies to 0.3% of GDP and allocate additional funds for arrears clearance.<br>- Improve collections, reduce operating costs, losses, and price distortions in the tariff structure.

Performance Contracts for DISCOs - Sign performance contracts with the Board of Directors of DISCOs to improve efficiencies and regulations.<br>- Monitor performance on a monthly basis.

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Transfer6 PHCL Debt to DISCOs - Move the debt of Power Holding Company Limited (PHCL) to the balance sheet of DISCOs where privatization will take
 CONCLUSION
• Pakistan's historical economic growth has been hindered by energy sector bottlenecks,
which are exacerbated by increasing energy demand.
• The rising energy demand in Pakistan poses a significant challenge to energy
resources and distribution networks, requiring a fundamental transformation of the
energy system.
• Over-dependence on fossil fuels, particularly oil, is a risky proposition, highlighting
the need for energy security to safeguard economic stability.
• The government is actively pursuing a shift towards renewable energy sources to
enhance affordability and sustainability in the energy sector.
• Exploration of indigenous and environmentally friendly clean energy resources is a
key strategy to ensure energy security and reduce dependence on conventional energy
sources.
• Pakistan has made substantial progress in transitioning to alternate and renewable
energy sources, significantly increasing their contribution to the country's energy
generation.
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 Books refrences
1."Energy Crisis in Pakistan: Origins, Challenges, and
Sustainable Solutions" by Mushtaq A. Khan and Tariq
Husain.
2."Pakistan’s Energy Issues: An Overview" by Noman
Ahmed.
3."Energy Crisis in Pakistan: A Critical Analysis" by Imran
Ali Sandano.

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 BIBLIOGRAPHY
Mittha, M. (2021, April 19). Renewable Energy Policy in Pakistan: A Critique. Courting the Law.Retrieved
from https://courtingthelaw.com/2021/04/19/commentary/renewable-energy-policy-in-pakistan-a-critique/Jilani, M.
(2023, May 3).
Exploring Pakistan’s Energy Sector: Sources and Trends. Paradigm Shift.Retrieved from
https://www.paradigmshift.com.pk/pakistan-energy-sector/Mohey-Ud-Din, G. (2023, July 22). Pakistan’s energy mix
and export competitiveness. Business Recorder.Retrieved from
https://www.brecorder.com/news/40253661#:~:text=Currently%2C%20according%20to%20the%20Economic,percent
%20to%20the%20overall%20mix.Sajjad, S. (2023, July 28).
Pakistan’s Energy Enigma; A Historical Analysis. Macro Pakistani.Retrieved from
https://macropakistani.com/pakistans-energy-enigma-a-historical-analysis/Kiani, K. (2020, August 13).
Alternative energy policy unveiled. Dawn.Retrieved from
https://www.dawn.com/news/1574133#:~:text=ISLAMABAD%3A%20The%20government%20on
%20Wednesday,lowest%20tariff%20and%20technology%20transfer.Berman, N. (2023, February 6).
What’s at Stake in Pakistan’s Power Crisis. Council on Foreign Relations.Retrieved from
https://www.cfr.org/in-brief/whats-stake-pakistans-power-crisisINP. (2023, October 6).
Energy crisis a major obstacle to Pakistan’s economic growth, industrialization. Nation.Retrieved from
https://www.nation.com.pk/06-Oct-2023/energy-crisis-a-major-obstacle-to-pakistan-s-economic-growth-
industrialisationRehman, U. (2023, March 11).
Energy Crisis in Pakistan. Modern Diplomacy.Retrieved from
https://moderndiplomacy.eu/2023/03/11/energy-crisis-in-pakistan/
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4
0
?
Q AND
A

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