The International Energy Agency (IEA) focuses that the use of fossil fuels, especially unabated coal, must be phased out with in next ten years, if we have to achieve a net-zero target in line with the goals set out in the Paris Agreement. COP-28 as one of its key outcomes also finally emphasized the need to transition away from fossil fuels, calling countries to accelerate their energy transition programs. With decreasing cost of technologies, innovative financing mechanisms and global trends, decarbonization efforts not only improve the environment profile, but they also make a better economic case over the longer run.
However, despite these opportunities, “energy transition has a cost and logistical needs” that are imperative to drive this transition. Further, the poly-crisis-driven by Post COVID recovery challenges, regional turmoil, supply chain issues and economicus-certainties has limited fiscal space of underdeveloped and developing countries that are entrapped in debt burdens. Many of the Asian as well as some of the Pacific countries have faced significant socio-economic losses further decreasing the capital availability for a swift and effective energy transition. In the backdrop of these opportunities and challenges, it is high time for these countries to develop coordinate plans and joint response for mobilizing the necessary finance and analyze the needed reforms of the international financial structure.
Energy insecurity and climate vulnerability of Asian Region. Asia is a home of almost 4.5 billion people that account for almost 60% of the globa lpopulation. However, ongoing economic crisis the region is facing a three-fold challenge of socio-economic development, energy security and environmental sustainability. According to Asian Development Bank (ADB)around 350 million people in Asia does not have access to reliable electricity while 150 million does not have access to it at all. The increasing energy demand limited non-renewable resources and high reliance on fossil fuels (68% fossil fuels in power generation), the region is highly exposed to price volatility and economic risks. Now at the same time, the region is also confronting an increasingly challenging climate landscape, characterized by morefrequent and severe climate-related disasters such as heatwaves, cyclones, droughts and floods.
The region currently accounts for 60% of global emissions from power generation, leading to increased climate vulnerability. This is particularly concerning as it compounds the existing vulnerabilities of a region that is home to some of the world’s most vulnerable communities.
Pakistan is listed in developing country with tough political and economic conditions, posing a serious challenge to develop a policy that supports the energy transition from fossil fuels to renewables. Pakistan is blessed with a huge 3425.796 GW renewable energy potential including wind (346 GW), solar (2,900 GW), hydro (59,000 GW), geothermal (100 GW) and biomass (20 GW) even though Pakistan is producing electricity mostly from imported fossil fuels (coal, furnace and natural gas) with 58.8% share followed by 25.8% hydro, 8.6% nuclear and only 6.8% from solar and wind sources. Renewables contribute only 32.6% in the total energy mix of Pakistan.
Ministry of Energy (Power Division), Government of Pakistan developed a policy entitled, “Alternative and Renewable Energy (ARE) Policy 2019” with the aim of increasing the renewable capacity by 30% by 2030 with most of the electricity produced from indigenous energy sources including biomass, wind and solar. However, this target cannot be achieved with the present transmission and distribution network. The Asian Development Bank (ADB) claims that except for China, the countries under its Central Asia Regional Economic Cooperation (CAREC) project would have to invest from USD 25 billion to USD 49 billion to upgrade their power transmission and distribution infrastructure. The big challenge Pakistan is facing the ageing power grid infrastructure with limited network capacity is a major bottleneck for supporting the integration of renewables while maintaining grid stability. To enable the power grid to evacuate power from both renewable and non-renewable energy projects, more investment is needed to upgrade the power network infrastructure, including its modernization and digitalization.
Energy storage is also vital for a renewable-powered energy future. It bridges the gap between intermittent renewable energy generation and stable energy demand in terms of energy supply and grid reliability. Nowadays, batteries have gained considerable ground as the power of many of the technologies that will enable the transition towards net zero. Research, development and infrastructure investments in energy storage are vital for the widespread adoption of renewable energy.
Energy Efficiency has also gained global attention among policymakers in recognition of its pivotal role in enhancing energy security, affordability and environmental sustainability. Addressing Pakistan’s energy challenges also requires a strategic shift towards energy efficiency. In response to growing energy demand, the focus has traditionally remained on capacity expansion rather than conservation. This approach has led to increased capacity payments and inefficient energy use. Enhancing energy efficiency presents a significant opportunity to curtail energy imports, offering a cost-effective solution to address national energy challenges. This approach not only mitigates environmental concerns but also eases production costs and fosters economic growth.
The International Energy Agency (IEC) reveals that energy efficiency, the ‘first fuel’ in clean energy transitions, offers swift, cost-effective CO2 mitigation, reducing energy bills and enhancing energy security. Institute for European Energy and Climate Policy released a recent study, ‘’Energy Efficiency visible in the energy mix’. If something isn’t visible, it won’t be prioritized, which is one of the reasons energy efficiency does not come first in planning, policy-making and investment. For energy efficiency to be considered on a level playing field with other energy resources, energy efficiency improvements need to be monitored and then energy efficiency data needs to be integrated into the overall energy picture. The energy transition will also open doors for green job creation, enable businesses, attract foreign investment and stimulate economic growth.
As a climatevulnerable nation, Pakistan can mobilize substantial global funding under a ‘Just Energy Transition Partnerships (JETPs)’. These partnerships facilitate targeted and catalytic funding, mobilizing resources from various channels to support the energy transition.This requires a comprehensive action plan based on a holistic approach along with clear targets, timelines, policy continuity and stakeholder engagement. In this way, Pakistan can pave the way for a sustainable and green energy future.
This exclusive article has been published in Automark Magazine’s October-2024 printed and digital edition. Written by #Asif Masood