Coal phase-out

CPEC looms large in this debate as long-term agreements, capacity payments complicate immediate shutdown of plants

October 20, 2023


As Pakistan grapples with the formidable challenge of transitioning away from coal, the recently published UN report “Phasing-Down the Use of Coal in Pakistan” offers a comprehensive roadmap through the complex terrain of economic, environmental and social considerations. The urgency of phasing down coal power plants is undeniable, yet the intricacies embedded in existing agreements and geopolitical factors call for a delicate balance.

CPEC looms large in this narrative, with long-term agreements and capacity payments complicating the immediate shutdown of coal plants. The geopolitical ripples from the Russia-Ukraine conflict and Covid-related disruptions further tighten the knot, propelling a higher reliance on coal for power generation due to spiking natural gas prices. However, amidst these challenges, the report highlights a pivotal opportunity arising from China’s decision to cease investments in coal-fired projects abroad after 2021. This presents Pakistan with a unique chance to pivot towards a greener future, aligning with global trends and aspirations. The transition, the report contends, is not just a technological shift but rather a complex, multifaceted process. While Pakistan boasts abundant renewable energy resources, its limited distribution grid infrastructure acts as a bottleneck. The solution lies in a collaborative effort, requiring substantial investment to upgrade the grid for seamless integration of renewable sources.

The essence of the report lies in the plea for a comprehensive energy transition plan, a meticulous blueprint outlining clear targets, timelines and sector-specific strategies. Stakeholder consultations, environmental considerations and economic nuances must be woven into the fabric of this plan to ensure a sustainable and inclusive transition. Pakistan stands at a pivotal moment in its energy history. The ambitious targets set for 2030 demand not just financial investments but a paradigm shift in policy, regulation and societal norms.

Published in The Express Tribune, October 20th, 2023.

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