Major Challenges

Though a considerable amount of work has been undertaken to privatize the power sector since 1992, Pakistan is continuing to restructure the electric power sector to keep pace with international developments and attract international trading in electricity. The Government plans to create a climate conducive to investment and economic development and develop a sound regulatory regime to support these developments (41).

Renewable Energy

In 2006, a Renewable Energy Policy was approved by the Government of Pakistan. Renewable energy development in Pakistan is conceived under a phased, evolutionary approach. The initial short term phase involves lenient policy measures and incentives in order to attract investment, remove existing barriers to implementation, and support reasonable-sized pioneering projects to become successful commercially. As domestic industry capacity grows, it is planned that the policy environment will graduate into a more competitive and deregulated renewable energy market (42). The purpose for expanding renewable energy indicated in the Policy includes energy security, environmental protection, social equity and economic benefits.

The Alternate Energy Development Board (AEDB) is the main organization responsible for facilitating the introduction of renewable energy sources in Pakistan. The Board plans to generate 700 MW wind power by 2010. A total of 140 micro wind turbines have been installed at various sites to provide electricity to rural households and for water pumping. The AEDB has also successfully deployed solar energy technologies for rural electrification through stand-alone solar homes systems.

 Environmental Impact

Environmental costs are increasing as demand for electricity in Pakistan spirals due to rapid population and economic growth. The demand for power is expected to almost double within the next 7 years and increase by four by 2025.

In 1993 Pakistan instituted National Environmental Quality Standards (NEQS), though regulations have not been strongly enforced. Even if regulations were strictly enforced, many industries would be unable to achieve the standards. Also, development projects, such as power plant construction, require an environmental impact assessment before approval. National attention towards environmental issues has increased recently for trade purposes. Under provisions of a world trade organization (WTO) agreement, Pakistan will have difficulty in exporting products from industries without adequate environmental safeguards.

 Affordability & access

 As of 2005, Pakistan had electrified 71 per cent of villages. The WADPA has been working for a number of years to expand the electricity access so that just over 89,000 villages had access in 2005, compared with just over 600 villages in 1958.

With respect to the affordability of electricity, urban households seem to spend more on electricity than rural households, as can be seen in figure 30, though this could reflect the disparity of access been urban and rural areas.

Stakeholders:

Ministry of Water & Power
National Electric Power Regulatory Authority
Alternative Energy Development Board
Private Power Infrastructure Board
Water & Power Development Authority
Faisalabad Electric Supply Company (FESCO)
Gujranwala Electric Power Company (GEPCO)
Hyderabad Electric Supply Corporation  (HESCO)
Islamabad Electricity Supply Company (IESCO)
Karachi Electric Supply Corporation Limited (KESC)
Lahore Electric Supply Company Limited (LESCO)
Peshawar Electric Supply Company (PESCO)
Multan Electric Power Company (MEPCO
Quetta Electric Supply Company (QESCO)
Private Power and Infrastructure Board (PPIB)
Alternative Energy Development Board (AEDB)

(41) National Electric Power Regulatory Authority, Islamic Republic of Pakistan, http://www.nepra.org.pk/aboutus.htm, accessed in September 2007.
(42) Government of Pakistan, “Policy for Development of Renewable Energy for Power Generation, 2006” (2006) http://www.aedb.org/, accessed in September 2007.