Pakistan’s costly and unrealistic long-term power resource strategy

Pakistan’s long-term power generation capacity strategy has shortcomings ranging from an excessively ambitious demand growth projection, adding costly and unsustainable electricity, and prioritizing coal over renewable energy, the Institute of Energy Economics and Financial Analysis (IEEFA) concluded in a report published Thursday with funding from the Climate Justice and Clean Energy Alliance.

Power demand growth projections under the Integrated Generation Capacity Enhancement Plan-2047 [IGCEP-2047] are too strong and do not take into account the effects of COVID-19, said IEEFA in the study entitled ‘Pakistan’s danger of overcapacity and costly power locking.’

The IGCEP predicts that GDP growth will rise from 4 percent by 2020 to 5.5 percent by 2025, and will continue at this pace until 2047. Even before COVID-19, the IGCEP ‘s medium demand growth projection was too premature but the pandemic made it much more outdated, it said.

This could lead to long-term risks of locking in overcapacity, a problem already encountered in China, India, Indonesia, and Bangladesh – nations that overestimated their rise in demand.

Because of the excessively ambitious rise in power demand by the IGCEP, it is expected to develop more power capacity than required, the IEEFA cautioned, adding that the country’s long-term energy strategy may not match up to the government’s specified values of efficiency and affordability.

The idea of sustainability of Pakistan’s government can not be followed if the power grid is locked in long-term overcapacity – capacity payments to idle plants are already a challenge and will become much more unsustainable if more overcapacity were locked in, the author of the report, Simon Nicholas stated.

Despite the fact that wind and solar were already Pakistan’s cheapest producing sources of power and would be much cheaper in the 2030s and 2040s, he said the IGCEP had ignored new renewable energy in its plan after 2030.