Self-inflicted energy crisis

In the Karimabad valley of Chitral, Abdul Rahim's monthly electricity bill came to 1,500 rupees. The power comes from a community hydropower project run by the Aga Khan Rural Support Programme (AKRSP) in Pakistan's Hindu Kush mountains. Some 20 kilometers down the valley, families on the national grid pay between 6,000 and 7,000 rupees for the same month. In that short stretch of road, Pakistan's energy crisis stops being a mystery.

The Economist? recently ranked Pakistan among the world's biggest losers from the Gulf energy shock. Fossil fuels account for more than 30% of its total import bill, nearly 90% of that oil sourced from the Middle East, making energy shocks a direct trigger for current account crises. We saw this after the Ukraine war. We're seeing it again after the Iran war. That chronic vulnerability points to a deeper question: how did a country with 60,000 MW of untapped hydropower potential, Chinese investment on its doorstep, and rivers,?sun?and wind in abundance, end up?this exposed??The answer?isn't?resource scarcity.?Political?economy already determined the investment – and it chose wrong.??

When China arrived with CPEC, a $60 billion infrastructure programme with energy at its centre, Pakistan had a once-in-a-generation opportunity. CPEC's first phase poured more than $33 billion into the energy sector. Nearly two-thirds of that generation capacity went to coal. Coal dominated CPEC not because it was the best energy solution or Pakistan lacked alternatives but because coal served a different purpose entirely.

Nawaz Sharif won the 2013 election on a promise to end load-shedding - coal could be built within an election cycle. Hydro couldn't. Punjab was the electoral base; hydro potential sat in smaller regions like Khyber-Pakhtunkhwa and Gilgit-Baltistan. Sindh was no different. The PPP government, sitting on one of the world's great wind corridors in Jhimpir-Gharo, also prioritised coal. Both major parties, both major provinces, made the same calculation.

Khyber-Pakhtunkhwa and Gilgit-Baltistan together hold over 45,000 MW of identified hydropower potential, which is 75% of Pakistan's total. Both received a fraction of CPEC's energy investment. In Gilgit-Baltistan, the shelving of a single $14 billion hydropower plant wiped out 98% of CPEC funds to the province – the same region that holds Pakistan's greatest hydropower potential.

Poor planning is another key factor. Even where the national grid did arrive, it arrived badly. Grid connectivity in topographies like Chitral, with its narrow valleys, is uniquely challenging. It needed to be done once, with proper planning. Chitral's Golan Gol project feeds 436 million units annually into the national grid, but captures only a fraction of the valley's actual estimated hydropower potential of 6,000 to 7,000 MW. To go back now means new transmission towers, new environmental disruption, new costs that careful planning could have avoided entirely.

The consequences are already being lived. Chitral residents took WAPDA to court over high-tension transmission lines running directly over their homes - a safety and health hazard that made the property beneath them worthless. They won. WAPDA was ordered to move the lines. It couldn't. The lines had been laid without accounting for what surrounded them, and there was no viable path to correct the mistake. A court order remains unimplementable. That is what short-term or bad planning looks like.

Meanwhile, the Sahiwal coal plant, CPEC's flagship energy project built in Punjab on imported coal, today operates at 41% utilisation while consumers pay for electricity it isn't producing.

According to a CSIS analysis of CPEC's first five years, only 34% of energy projects were completed overall, and wind and solar received just 8% of generation capacity. Pakistan chose this.

The numbers make the case. Pakistan has a 10 to 12 GW surplus of generation capacity. Consumers pay Rs2.5 to 2.8 trillion every year for idle plants not producing a single unit of electricity. Yet millions of households remain without electricity, and millions more face 12 hours or more of daily load-shedding.

The rapid rise of solar in Pakistan is often celebrated as progress, but?the boom is not a policy success story?either. It is what happens when a state fails so completely that people opt out of it entirely. Electricity tariffs rose 155% in three years. People bought?solar?panels in desperation.?Pakistan became the world's third-largest market for Chinese solar panels?almost overnight,?as solar?became affordable for the middle class.?Now the government is cutting buyback rates and imposed an 18% import tax on panels, which was later reduced to 10% after public backlash, to protect the broken?grid?those same people abandoned. Also, there were reports of the government going further, requiring licences for solar users and introducing additional fees, even for smaller systems that were previously exempt. The Ministry of Power Division has, however, denied such reports.

Anyway, as a matter of fact, the?state built?overcapacity with the wrong technology, priced people off the grid, watched them leave, and is now penalising them for leaving. That is not a solar success story. It is a governance failure in another form.?

Pakistan's energy crisis is self-inflicted, a clear example of how short-sighted government policies play politics with essential human needs instead of solving them. The Pakistani government cynically used coal as a primary energy source despite the fact that it was polluting and required coal imports. The contracts that govern Pakistan's LNG terminals follow the same logic and so does every other energy decision Pakistan has made in the last two decades. The government apparently felt that a longer-term strategy, properly communicated, which gives greater emphasis to renewables will not work politically because people want more power now regardless of the cost or inefficiencies. That is not mismanagement. That is a choice about who the system is designed to serve.

It is time for the government to realise that decades of neglect cannot be addressed through short-sighted fixes that often create more problems than they solve. Pakistan cannot afford to abandon the pursuit of a sustainable energy future built on hydropower, solar and wind, even as it works to meet immediate demand. Pakistan will never get out of its "developing country" status unless it learns, as Americans say, to?walk and chew gum at the same time.