CSS Current Affairs | Comparison of Pakistan’s Energy Crisis with that of Bangladesh and India
The following assignment question for CSS Current Affairs is solved by Manahil Naseeb under the supervision of Howfiv’s Pakistan Affairs and Current Affairs Coaches: Miss Iqra Ali and Sir Ammar Hashmi. She learnt how to attempt 20 marks question and essay writing from Sir Syed Kazim Ali, Pakistan’s best CSS and PMS English essay and precis teacher with the highest success rate of his students. This solved question is attempted on the pattern taught by Sir to his students, scoring the highest marks in compulsory and optional subjects for years.
Outline
1-Introduction
2-A Brief Overview of Pakistan’s Energy Sector and its Recurring Crisis
3-Comparing Pakistan’s Energy Crisis with that of India and Bangladesh
- Lower Accessibility to Electricity
- Higher Electricity Prices
- Higher Transmission and Distribution losses
4-Lessons Pakistan can Draw from its Experiences
- Implementing Aggressive Governance Reforms in Distribution
- Minimizing Circular Debt
- Installing an off-grid energy model
5-Conclusion
Answer to the question
Introduction
Energy is a linchpin of a country’s socio-economic growth without which a nation cannot prosper. Likewise, an energy crisis is an obstacle to a country’s success. Unfortunately, Pakistan stands at a point where its energy sector is decaying. If compared with that of India and Bangladesh, Pakistan’s energy deficit is higher. For instance, in Pakistan, a large population has no access to electricity in comparison to that of India and Bangladesh. Also, the electricity prices are higher in Pakistan. Furthermore, Pakistan has higher transmission and distribution losses than the other two countries have. Thereby, Pakistan should take effective measures, such as providing an effective supply of electricity, reducing circular debt, and establishing off-grid energy models to minimise its energy crisis.
A Brief Overview of Pakistan’s Energy Sector and its Recurring Crisis
It isn’t news to Pakistanis that the state is experiencing an energy crisis. The energy sector has been suffering for decades. For one reason or another, Pakistan faces persistent shortages, and with them come the ever-increasing electricity prices. The burden of rising electricity costs falls on consumers, impacting both individuals and businesses. In terms of energy production and energy availability, Pakistan has always been lacking. These problems are as old as Pakistan, and with a growing population and other factors, the problems have turned into a crisis. In the 1990s, energy demand exceeded supply, therefore creating a crisis-like situation. In the wake of this crisis, a power policy was designed in 1994 in which Independent Power Producers (IPPs) contributed an additional 13,000 MW of energy. The problem didn’t go away because the power-distributing sectors lacked the infrastructure to draw off the additional energy. In the 2000s, Pakistan made some progress by reducing power outages and increasing energy production. In 2022, NEPRA reported that the total power generation capacity installed in Pakistan stands at 43,775 MW. 59 percent of this energy comes from thermal/fossil fuel resources, 25 percent from hydro resources, 9 percent from nuclear resources, and 7 percent from renewable energy resources. Pakistan is currently facing an energy crisis and high electricity rates, which can be attributed to many factors.
Comparing the energy crisis in Pakistan with that in Bangladesh and India
- Lower Accessibility to Electricity
In Pakistan, a significant portion of the population still lacks access to electricity. The country has made limited progress in ensuring a reliable electricity supply for its people. In contrast, India and Bangladesh have made considerable progress in providing electricity to almost all of their citizens. According to the World Bank report of 2019, India and Bangladesh have made effective reforms from 1991 to 2019 to provide electricity to their whole population; comparatively, in Pakistan, the number of people without access to electricity has risen, illustrating that Pakistan is stepping towards energy decline, whereas India and Bangladesh are overcoming the problem over the years.
- Higher Electricity prices
If Pakistan’s electricity prices are compared to those of other countries in the region, it has one of the highest prices in the region. It has caused Pakistan a lot in terms of the loss of foreign direct investment FDI. According to the National Efficiency and Conservation Authority report of 2021, Pakistan’s electricity price is US$ 0.13 per kWh, whereas in India, it is 0.12 per kWh, and in Bangladesh, it is U.S. dollars 0.09/kWh. Also, there is a difference in tariffs among these nations compared to India. Pakistan’s maximum average-based tariff for large consumers is 40% higher, and for residential consumers it is 31% higher compared to Bangladesh; however, for larger residential consumers it is 16% to 29% higher. Bangladesh charges electricity at a tariff of PKR 25.35 per kWh, whereas Pakistan is providing electricity at a tariff of PKR 29.33 kWh 2 PKR 32.22 kWh. As a result, foreign companies find it cheaper to utilise Indian and Bangladeshi land rather than Pakistani.
- Higher Transmission and distribution losses
Electricity (T&D) losses in Pakistan are a remarkable issue that influences the country’s power sector, economy, and overall energy security. Pakistan has dwelled above global and regional averages in terms of T&E losses. These losses refer to the amount of electricity that is lost as it travels from power plants through transmission and distribution to the end consumers. These losses occur due to a combination of technical and non-technical factors, including outdated infrastructure, poor maintenance, energy theft, and inefficient management practices. According to reports and data from various sources, including the World Bank, T&D losses typically range from 17%to 22% of the total electricity produced in the country. For instance, T&D losses in Bangladesh and India are 8.7% and 18.2%, while in Pakistan, these are 19.5%. Hence, Pakistan’s T&D losses are higher than those of Bangladesh and India.
Lessons Pakistan can draw from their experiences
- Implementing Aggressive Governance Reforms in Distribution
India’s rapid climb to near 100% access was achieved by legally enforcing accountability on regional distribution companies (Discos). Pakistan must enforce smart metering to eliminate rampant electricity theft and administrative leakages. Furthermore, the operation of state-owned distribution companies requires deep privatization or strict performance-based contracts to halt structural inefficiencies. Moreover, transmission and distribution infrastructure must be prioritized for modernization to prevent the heavy line losses that drive up consumer base tariffs.
- Minimizing Circular Debt
Not only is Pakistan facing transmission and distribution losses of electricity in 2024, but also the burden of surplus energy that Pakistan has is being endured by consumers by paying higher electricity costs. Although the DISCOs in India are as inefficient as the DISCOs of Pakistan, in Pakistan, the loss is augmented due to circular debt. The government should regulate the DISCOs to ensure minimum power loss during transmission and distribution and build the required infrastructure so that the surplus energy can be provided to the citizens.
- Installing an Off-grid Energy Model
The flat 75% access line shows that extending the traditional national grid to remote areas is financially and logistically unviable for Pakistan. Therefore, bypassing the Grid via decentralized Solar Home Systems (SHS) can immediately power un-electrified rural pockets. Also, the government should partner with domestic micro-finance institutions to let low-income households buy modular solar kits via Flexible, affordable monthly Instalments.
Conclusion
Hence, Pakistan is in the midst of energy shortages that are comparatively higher than those of India and Bangladesh. The country has a higher population with no access to electricity, higher electricity prices, and higher D&T losses. Therefore, the state requires urgent reforms to overcome the crisis. Pakistan needs to implement aggressive governance reforms in distribution, minimise circular debt, and install an off-grid energy model that would aid the nation in tackling the problem and providing electricity access to the higher number of its population.
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