CSS 2014 Solved Current Affairs Past Paper | Decision Making Regarding Energy Crisis in Pakistan
The following question of CSS Current Affairs 2014 is solved by Muhammad Zeshan, a student of Sir Ammar Hashmi, the best Current Affairs Coach, on the guided pattern of Sir Syed Kazim Ali, which he taught to his students, scoring the highest marks in compulsory subjects for years. This solved past paper question is uploaded to help aspirants understand how to crack a topic or question, write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
Question breakdown
The question requires a critical appreciation of the decision-making in Pakistan regarding the Energy Crisis.
Outline
1-Introduction
2-Historical overview of energy policies in Pakistan
3-Strengths and weaknesses of decision making in Pakistan’s energy sector
3.1-Strengths
- ✓Encouragement of private sector investment
- ✓Shift towards renewables
- ✓Regional energy integration leadership
- ✓Hydropower development renaissance
3.2-Weaknesses
- ✓Short-term planning and policy inconsistency
- ✓Over-reliance on imported fuels
- ✓Inefficient governance and institutional failures
- ✓Circular debt trap and financial mismanagement
4-Way forward for the sustainable decision making in Pakistan’s energy sector
5-Conclusion
Answer to the Question
Introduction
Pakistan has been struggling with a persistent energy crisis for decades. This crisis is marked by chronic electricity shortages, an unstable energy mix, and mounting circular debt. Initially, policies such as the 1994 power policy sought to address generation gaps by encouraging private investment, yet these measures failed to ensure long-term sustainability. Over time, subsequent policies, including those in 2002 and 2013, attempted to tackle inefficiencies in distribution and debt management, but their impact remained limited due to inconsistent implementation and political interference. Furthermore, while recent initiatives like the 2019 Alternative Energy Policy have promoted renewable energy, reliance on costly imported fuels continues to strain the economy. Consequently, decision-making in Pakistan’s energy sector has been largely reactive rather than strategic, leading to recurring crises. Therefore, a critical evaluation of these policies, describing their strengths, weaknesses, and long–term implications, is necessary to determine a path forward for energy security in Pakistan.
Historical Overview of Energy Policies in Pakistan
Pakistan’s energy policies have undergone several phases of evolution, yet persistent challenges remain. Initially, the acute power shortages perpetuated the 1994 Power Policy, which introduced private sector participation through profitable incentives for Independent Power Producers (IPPs). While this successfully added 4500 MW of generation capacity, it locked the government into expensive take–or–pay contracts and dollar–indexed tariffs that still burden the economy today. Subsequently, the 2002 Energy Policy attempted comprehensive reforms, including dismantling WAPDA into separate generation, transmission, and distribution companies. However, political resistance and weak regulation meant most Distribution Companies (DISCOs) remained state-controlled and inefficient. During this period, the 2006 Renewable Energy Policy set ambitious targets for wind and solar power, but bureaucratic hurdles, lack of grid infrastructure, and the 2008 economic crisis halted the progress. Horribly, the crisis peaked in 2013 when power outages reached 12 – 18 hours daily, giving rise to the 2013 Power Policy that prioritised short–term fixes, which resulted in the increased circular debt (raised from RS. 161 billion in 2013 to RS. 2.5 trillion by 2023) due to unrealistic tariff subsidies. Meanwhile, the 2019 Alternative Energy Policy set a 30% renewable target by 2030, yet its implementation lags due to vested interests in imported fuel-based projects. Throughout this history, ad–hoc decision making, inconsistent governance, and failure to address distribution losses, which are still 17 – 22%, have undermined even well-initiated policies.
Strengths and Weaknesses of Decision Making in Pakistan’s Energy Sector
Strengths
Notwithstanding these historical challenges, a closer examination reveals several instances where decision-making demonstrated foresight in tackling Pakistan’s energy crisis.
• Encouragement of Private Sector Investment
Decision-making in Pakistan regarding the energy crisis has demonstrated strategic vision, particularly through its early liberalisation of the power sector. Specifically, the landmark 1994 Power Policy broke WAPDA’s monopoly by offering private investors sovereign guarantees, dollar–indexed returns, and tax holidays. As a result, over $10 billion flowed into new generation capacity during the 1990s. Subsequently, the 2002 Policy built on this foundation by unbundling the sector and creating competitive power markets. Similarly, the CPEC energy projects contribute over 5000 MW of reliable electricity to the national grid. More recently, the 2017 Competitive Trading Bilateral Contract Market (CTBCM) framework has introduced innovative approaches to creating efficient electricity markets that benefit investors and consumers alike.
• Shift Towards Renewables
In recent years, Pakistan has emerged as a regional leader in renewable energy adoption through progressive policymaking and strategic implementation. The cornerstone of this success is the 2019 Alternative Energy Policy, which has not only established clean energy targets but also introduced incentives for solar and wind energy projects. Notably, this visionary approach has made significant developments such as the Quaid–e–Azam Solar Park, alongside the Jhimpir Wind Corridor. Furthermore, the 2017 Net Metering Policy empowers businesses and households to become energy producers while reducing strain on the national grid. Looking ahead, Pakistan’s renewable energy sector continues to gain momentum with new initiatives like the 2024 Renewable Energy Framework, which promises to integrate advanced energy storage solutions.
• Regional Energy Integration Leadership
In the area of energy cooperation, Pakistan has strategically positioned itself as a key player through a series of ambitious connectivity initiatives. Foremost among these is the CASA–1000 electricity transmission project, which exemplifies Pakistan’s vision for energy connectivity by enabling clean power imports from Central Asia. Simultaneously, significant progress on the transformative Turkmenistan – Afghanistan – Pakistan – India (TAPI) gas pipeline underscores Pakistan’s commitment to enhancing energy security for the entire region. Additionally, existing cross–border energy links, including the operational Iran–Pakistan transmission line, serve as concrete examples of Pakistan’s dedication to mutually beneficial energy partnerships. Together, these projects not only highlight Pakistan’s growing role as an energy hub in South and Central Asia but also demonstrate its capacity for regional leadership in energy cooperation.
• Hydropower Development Renaissance
In the domain of clean energy development, Pakistan is actively realising its immense hydropower potential through a well–coordinated development program. The magnificent achievement in this regard is the Diamer–Bhasha Dam project, representing a historic infrastructure development program after long-lasting challenges. Concurrently, steady progress on the Mohmand Dam and Dasu Hydropower project demonstrates the government’s commitment to clean energy generation. Moreover, the 2020 Hydropower Policy has successfully attracted private investment to develop small- and medium-sized projects across the country. Looking to the future, the National Hydropower Vision 2047 provides a well-structured roadmap for fully grasping the sustainable energy resource, thereby ensuring long-term energy security and environmental sustainability for Pakistan.
Weaknesses
While these strengths highlight adaptive elements in Pakistan’s energy decision-making, they remain overshadowed by systemic weaknesses.
• Short–term Planning and Policy Inconsistency
Energy sector in Pakistan has suffered tremendously from ad–hoc decision making and frequent policy reversals, creating an environment of uncertainty that discourages long–term investment. Despite initiating multiple power policies since 1994, each new government has introduced contradictory measures rather than building on previous frameworks. Resultantly, leading to a cycle of abandoned projects and wasted resources. For example, the 2019 Alternative Energy Policy set ambitious renewable targets of 30% clean energy by 2030, yet succeeding administrations delayed solar and wind projects in favour of quick LNG imports to address immediate power shortages. Moreover, critical initiatives like the Indigenous Energy Development Program remain chronically unfunded while imported–fuel–based projects receive proper attention. Consequently, Pakistan lacks a cohesive 20 to 30-year energy roadmap.
• Over-reliance on Imported Fuels
One of the most devastating weaknesses is Pakistan’s extreme dependence on fossil fuels, which accounts for over 60% of the energy mix. Despite having vast domestic coal reserves (estimated at 175 billion tons) and world-class hydropower potential, decision makers repeatedly prioritised expensive imported LNG, furnace oil, and coal due to short-term thinking and powerful import lobbies. For instance, between 2013 and 2015, Pakistan signed long-term LNG contracts at high prices, leaving the country vulnerable to global market shocks like the 2022 price surge that cost billions in additional imports. Additionally, despite billions invested, the failure to fully utilise the Thar coal demonstrates misaligned priorities in energy planning. As a result, Pakistan’s energy security remains tied to volatile international markets, worsening the country’s chronic trade deficits, while domestic resources remain underutilized.
• Inefficient Governance and Institutional Failures
Weak governance and corrupt bureaucracy have paralysed Pakistan’s energy sector. Despite numerous restructuring attempts, DISCOS remain a loss-making entity, with transmission and distribution losses exceeding 17% due to technical losses, frequent theft, and poor maintenance. Furthermore, political interference in tariff setting and subsidies has completely distorted the working mechanisms. For example, successive governments have avoided implementing cost–reflective tariffs due to short-term voter appeasement. Moreover, regulatory bodies like NEPRA lack real enforcement power, allowing IPPS to exploit capacity payment mechanisms without making meaningful improvements to their ageing plants. Unless comprehensive governance reforms are implemented to depoliticise decision-making and strengthen regulatory oversight, these institutional failures will continue to undermine the sector’s long-term sustainability, regardless of how much generation capacity is added.
• Circular Debt Trap and Financial Mismanagement
The circular debt crisis is now exceeding RS. 2.7 trillion and growing at about RS. One hundred billion annually is a direct result of chronic financial Mismanagement. Despite multiple high-profile bailouts (2013, 2019,2023), the root causes remain stubbornly unaddressed, like unwarranted subsidies and rampant theft. For example, the government subsidises elite farms and energy–intensive industries through artificially low tariffs. At the same time, ordinary consumers face relentless tariff hikes that still don’t cover the actual supply cost. Additionally, chronically delayed payments to IPPs force the government to borrow at high interest rates to meet its obligations. Hence, unless Pakistan implements a sustainable debt resolution plan by implementing strict measures, like eliminating untargeted subsidies, privatizing loss-making DISCOs, and enforcing strict collections, the sector will remain trapped in a perpetual cycle of financial crisis.
Way Forward for sustainable decision making in Pakistan’s energy sector
To overcome its chronic energy challenges, Pakistan must adopt a comprehensive long-term strategy prioritising sustainability, affordability, and energy security. First and foremost, the government must depoliticise decision-making by establishing an independent energy planning commission with the authority to implement a 20–year integrated energy roadmap. Simultaneously, Pakistan must accelerate its transition to renewables by removing barriers to solar and wind investments. It can be done by upgrading grid infrastructure to handle variable renewable energy and incentivising battery storage solutions to ensure a stable supply. Equally critical is the need to fully utilise the indigenous resources, particularly Thar coal and hydropower, by fast tackling delayed projects like Diamer–Bhasha and investing in modern clean coal technologies to reduce import dependence. To address financial instability, the government must implement urgent structural reforms, including privatising loss–making DISCOS, eliminating untargeted subsidies, and strictly enforcing anti–theft measures to break the circular debt cycle. Finally, Pakistan should enhance regional energy integration by completing the CASA–1000 and TAPI projects. By combining these measures with strong governance and transparency, Pakistan can transform its energy sector into a driver of economic growth rather than a long-lasting crisis.
Conclusion
In summary, Pakistan’s energy crisis has persisted due to decades of short-term planning, institutional mismanagement and policy inconsistencies. Simultaneously, it presents an opportunity for reforms if appropriately addressed with a strategic vision. Although the country has achieved notable success in expanding generation capacity and initiating renewable projects, fundamental weaknesses, like the circular debt, over-reliance on imports, and systemic governance inefficiencies, continue to jeopardise the sector’s ability. Moving forward, the solution lies in adopting not only depoliticized decision-making but also consistent implementation of structural reforms that prioritise indigenous resource development, grid modernization, and regional energy integration. Ultimately, the nation can transform from perpetual crisis management to sustainable energy development by making these strategic choices today to better the economic position and break free from the recurring cycle of economic distress. The time to act is now.
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